“Make money while you sleep!” — That slogan became popular in the longest secular bull market in the US stock market, which ran from August 1982 to December 1999. During that 17-year timespan, stocks returned an inflation-adjusted return of 1,128%.
Isn’t that the dream? To get rich without working?
In Bull: A History of the Boom and Bust, 1982-2004, the financial journalist and author, Maggie Maher, observed that dream started during the 80s:
“Baby boomers dreamed of retiring at 50 while Gen Xers invented their very own version of the American dream: wealth without working at all.”
With the volatile and inflation-ridden 70s in the rearview mirror, investors gobbled up stocks. During the 80s and 90s, investing became mainstream. At some point, Warren Buffett was more popular than most pop stars!
During those decades, we planted the seeds of the subsequent generations’ ideas about investing.
“I want to be rich but I don’t want to work.”
That motto seems to get more popular each decade. In the 1980s, the road to riches seemed to be owning growth stocks like Walmart, Hewlett Packard, FedEx, McDonald’s, and other fast-growing corporations.
Those types of stocks posted double-digit returns every year for multiple years straight.
- In the 90s, people were obsessed with internet stocks.
- In the 2000s; it was flipping houses with no money down.
- Then the 2010s, it was everything; from stocks to real estate to earning money online.
More and more people now have the belief that you can get rich without working.
Can we blame them? There are countless examples of people who became millionaires by posting videos or pictures of themselves.
And then there are people who became rich because they created or pumped internet currencies out of thin air.
For years, we’ve seen other people get rich by doing those things. It’s only natural to want the same. Who cares about waking up early and putting in a day of real work!?
Let’s travel, eat out, and have fun! The money will come anyway as long as you manifest it.
No one knows what that means, but hey, if no one knows, we can all pretend we know. But the truth is: That dark fantasy is toxic, destructive, childish, and a net negative for society.
How to get rich by working for it
As the Stoic philosopher-king, Marcus Aurelius, once said, we’re part of a larger ecosystem, whether we like it or not:
“You participate in a society by your existence. Then participate in its life through your actions—all your actions. Any action not directed toward a social end (directly or indirectly) is a disturbance to your life, an obstacle to wholeness, a source of dissension.”
Having a strong desire to get rich without working is not in line with Stoic values. Because what is work, really? It’s the contribution to society.
The carpenters, nurses, plumbers, doctors, artists, chefs, waiters, teachers, and so forth: Everyone plays a critical role in the world.
This is something we don’t appreciate enough as we go through our daily lives. We don’t stop and think, “Without that truck driver, the stores where I buy my groceries would be empty.” And you can apply the same line of thinking to every aspect of our existence.
Now, here’s where it gets dicey. In a capitalistic society, the role you play doesn’t always translate to equal monetary results.
For example, we all need dentists. Most people likely visit their dentist more often in a year, than they do dermatologists. But recent data shows that, on average, dermatologists earn almost twice more than dentists.1Source: Investopedia
This is where financial literacy comes into play. I believe every participant in society needs to profit from collective prosperity.
And the vehicle for profiting would be investing. The idea is this:
- Play a role in society
- Make a valid contribution
- Earn money
- Use that money to buy assets
- Others do the same
- The value of the assets goes up
- Everyone profits
But this system only works if (1) people actually contribute to society and (2) the assets they buy are valuable.
Bad example: The social media influencer who promotes crypto
A person who makes their money on social media by promoting nonsense products is only making society worse. Their activity, which is posting content on social media, is not created for true entertainment purposes (which is an important aspect) but to deceive.
The goal of that person is solely to get rich. They don’t care whether they impact society or not.
Then, they use their money to buy assets that are not valuable to society like luxury products and cryptocurrencies that are made out of thin air.
This is a chain of negative effects on everyone except for the person who’s getting rich.
Good example: The physiotherapist who’s a real estate investor
My mother’s physiotherapist is going to retire next year at age 63. He’s been a physiotherapist for his entire life, mostly focusing on rehab and correcting people’s postures.
He has changed thousands of people’s lives in his career. Next to being a physiotherapist, he’s also a husband and father of three. And he owns a handful of rental properties, which he acquired one by one over the course of his lengthy career.
He told my mom: “Next year I’m going to hang it up. I’ve already sold my practice to a very capable young man who’s going to take over. And I’m going to set off to the sun with my wife and enjoy the next phase of my life.”
To me, this is an honorable way of life. The man didn’t only help people, he also helped himself. He bought real estate over the years and now he’s financially comfortable at his age. He did his part.
Not everyone needs to buy real estate. Stocks are also assets, where the underlying value is not bricks but a real business. The point is that we need to be owners of assets.
When you participate in the economy but don’t own anything, you’re not fully profiting from the collective growth we generate as a whole. That makes it hard to get rich.
To make a change, we need to create a plan. Simply ask yourself:
“What assets do I want to own?”
Narrow things down. There are truly not that many options: Stocks, real estate, businesses, land, intellectual property, that’s about it.
Pick the asset class you’re most interested in and learn everything you can. And save money as you’re learning. Then, when you know enough to get started, start investing, and never look back.