The Cost of being a Millionaire

You might say that nothing is free, and you get what you pay for. This is true for everything in life, and is especially true if you want to be a millionaire. Newton’s law bears on this by stating that for every action there is an equal and opposite reaction. There is a cost to becoming a millionaire like every thing else in life, and these are some of those costs.

You can become a millionaire by being a cheapskate; don’t. It is a state that will follow you for the rest of your life. I don’t know about you, but I wouldn’t want to be branded as a cheapskate for the rest of my life.

The real key to being a millionaire is knowledge. They can take everything away from you except for the knowledge that you have gained through your life experiences; that always stays with you. If you think education is expensive; you should try ignorance!
One of the most important things you can learn is smarts about money. Study the ways that people have made money in the past. The Chancellor of Germany Otto vonBismarck observed in the nineteenth century, “Only a fool learns by his own mistakes!” The literature is full of biographies of great men of wealth; study them so that you can learn their ways. The bookshelves in bookstores are also groaning under the load of books about how to be a millionaire. These are all good books, but take the knowledge imparted by them and cut it to fit your own needs, and situation.

The ability to read and understand financial statements is the foundation upon which your coming wealth is built. You don’t have to be an accountant or book keeper to gain this kind of knowledge. In effect the financial statement is a report card that you can use to see how you or others are doing. The financial statement is your report card when you go to borrow money from the bankers. They are not going to ask for your report card from school to see how your grades were; they don’t care about them. The banking community is interested in your financial statement; that is your report card for the rest of your life.

I will admit that for most of my life a financial statement to me was a lot of gibberish I didn’t understand. The lack of understanding was very costly, and fifty years later I have made it a point to understand them. It took time, which is money, but it was well worth the time spent.

If you are going to buy stock or other instruments paying you dividends or accruing in value you sure had better read the other guy’s financial statement before you jump into their business. If possible read five years of their financials before you put a nickel into an investment. You will not become a millionaire by losing money.

Remember, knowledge is power.