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There’s been a conversation about how people become wealthy on a few blogs the last couple of days..

A guest post on Financial Samurai offers an untraditional roadmap to financial success. This is a response to a previous post on making a six-figure salary.

There is no one true path to building wealth. There are a lot. You can earn it. You can invest it. You can win it. Someone can give it to you.

There seems to be no consensus on who gets rich, either. The rich get richer, they say. But do the poor become richer? Do the smart become richer? Do the religious become richer? Do the well-educated become rich? Do the pretty become rich?

What I would like to do is pull in the scientists and see what they have to say about the rich — how they became rich and, maybe, how you can become wealthy, too.

You don’t have to be smart to be rich. According to a study in the journal of Intelligence, there’s no correlation between IQ and how much money you have.

But, you should have a high SAT score, according to this study.

But, you should still have been popular in high school. Popular kids tend to earn more later. *My two cents: Now, they just need to have a study on how to be popular AND be a nerdy, high-SAT student.

Owners of electric vehicles are richer (and smarter), according to this US News story. *My two cents: It may mean that the rich can withstand the economic impact of what are currently inefficient vehicles.

Read more…

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You should all be ashamed of yourselves — you and your “level playing field” exhortations.

The rich and their children are hopelessly outmatched in so many ways by working- and middle-class folks that it’s not even fair.

OK, so maybe the rich do have certain advantages. They can send their kids to great schools. When they compound their money, a little is a ginormous sums. They can network and hobknob with contacts that can open up new opportunities.

But…

For the non-rich investor or entrepreneur, making money may actually be easier than the rich.

The Rich Are Lazy
Rich people become comfortable and their interests move toward other activities. They, essentially, become lazy and pampered. That’s a very noncompetitive stance.

The Rich Are Stupid
Stupid is a mean word. Uninformed? Yeah. That sounds better. But, despite the access to the finest institutions of higher learning, the rich are saddled with “Yes-sir-or-ma’am” thinking. They surround themselves with people who always agree with them — and that cuts them off from learning valuable lessons, both practical and academic. You’ll notice that the rich who make their money in one economic condition, rarely lead the next.

The Rich Have Lazy Money
The rich pass on money to their managers and handlers. Their managers may or may not have their best interest in mind and, so, can make mistakes or poor investments with the money.

The Rich Are Attached
Rich people are terribly loathe to give all the good things they have up (“loathe” — that’s what rich people do instead of  ”hate.”) Since they become attach, they fail to move out of bad opportunities and are slow to seize good opportunities.

Read more…

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Traders are an odd lot.

No pun intended.

Most who I have met are an odd combination of…

Cynic and dreamer.

Thrill seeker and number nerds.

Cocky and self-deprecating.

They can be all of those things at the same time. Mostly, though, they’re realists. Philosophies, like positive thinking, are, quite frankly, namby-pamby chicken shit thinking. But, according to lots of studies on meditation and positive thinking, this may not be a healthy–or a wealthy–attitude.

Reduce Stress
Trading is stressful. Is that the greatest understatement of the decade? According to the Mayo Clinic, reducing negative self-talk can lower stress. Self-talk is that stream of messages — negative and positive — that swirl around in your conscious brain. One of the steps of positive thinking is to eliminate the negative messages — or cut down on them — and insert positive self-talk.

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Just a quick look at some of the good reads I found around the web this week…

Big Brand System — The 13 Minute 33-Second Website

Financial Samurai — Reducing Credit Card Spending One Month at a Time

Wealth Informatics — Investing to Make the Roth IRA Work Its Magic

Life and My Finances — What Doesn’t Count as Passive Income

The Future

Scientific American — Jetson-Like Gadgets and Smart Homes

Engadget — Amazon Stores 1,700 Human Genomes in the Cloud

Wired — Navy is 4 Years Away from Lasers on Ships

Yahoo News — Smart Homes Will Watch Your and Remember Your Needs

Discovery — Print Me a Spacecraft

New Scientist – Smart Windows Let Light In, Keep Heat Out

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The following is part of a series that I’ll be creating on trading strategies of well-known traders and investors. Today, we’ll look at the keys to the the investment and trading strategies of trend trader John W. Henry.

Unless your a Red Sox fan, you might not have heard of John W. Henry. When it comes to the lexicon of great traders, John W. Henry doesn’t hold a candlestick chart to guys like Warren Buffett and Richard Dennis. But he should be there.

One thing you notice about great traders is there’s no such thing as a “pedigree.” They don’t all come from Ivy League schools. They don’t all start investing early. A lot of traders don’t even have a financial background.

Henry was from a farm family. He went to Victor Valley College and spent a stint at the University of California. What was his major? Finance? Economics? Nope. Philosophy. He didn’t graduate, by the way.

Despite this unconventional background, in the late 1970s, Henry began to trade. First, he traded something he was familiar with–soybeans and corn futures. But, Henry eventually created and tested a systematic trend trading strategy for multiple assets, mostly commodities.

The tests proved successful. That’s an understatement.

Read more…

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After reading this great post about being debt free over at Hope to Prosper, it reminded me of one of the most powerful forces that affect our financial future: Exponential Growth. When we live with debt, we are at the mercy of this force. When we are debt free and save money each month, we put this force to work for us.

Photo by The Cleveland Kid

I wrote about this last year, and explained how the power of exponential growth can work for us or against us. When we are in debt, the interest is added to the debt, making us poorer. When we have savings, the interest compounds to make us rich.

Read more…

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Rich! Rich! Rich!

What does it mean to you?

Of course, there’s monetary wealth. But there’s other things you can be rich in. Good health. Friendship. Love. You name it.

In this edition of Weekly Wisdom, we’ll take a look at some great bits of wisdom on monetary wealth–and some of the other types of riches.

Read more…

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Despite what dozens of personal financial wizards and experts say, get rich schemes DO work.

Usually for the person running the get-rich scheme.

The guy who is at the top of the  pyramid marketing scheme does ok.

The gal who is running the Ponzi scheme gets rich quick.

The internet marketer who teaches you how to internet market to people who want to learn how to internet market also gets a few bucks the easy way.

But there are other ways you can make money quickly and easily.

Read more…

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Life doesn’t need to be hard.

And, as I read through some posts this week, I noticed something. Personal finance isn’t brain surgery or rocket science, or even rocket surgery.

Getting your financial house in order, spending money effectively, and investing wisely, can actually be pretty easy.

Here are a few bits of advice that proves it.

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Finance can be a pretty complex situation.

Some people are just afraid of numbers. And fractions. And percentages.

There’s help out there, number-phobes.

You can find financial calculators that can tackle all of your challenges–whether it’s finding a great investment, or saving for your honeymoon.

Read more…

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