When You're Young, Work For The Money...

January 12th, 2014 by 
PK

Probably the second most misunderstood quote in literature is F. Scott Fitzgerald's "There are no second acts in American lives" from the notes of Fitzgerald's The Last Tycoon. (Number one?  Nietzsche's "God is dead.", which appears in a few places, most notably Thus Spoke Zarathustra).  Expand that sad misunderstanding to all of North America, and you pretty closely approximate the attitudes of the young and their relationship with career choices.  Truth is, actuarial tables in the United States say that a 22 year old male will live on average 55 more years, and a female will live 60 more years.  Asking how to become rich becomes a question of when and where to expend your most effort - so you'll be able to reap the rewards in your later years.

Think about it: if a human can go from knowing literally nothing to being formally trained in a career in around 20 years... how, exactly, is 3 times that period limiting?

How to Become Rich: Your First Act

The inspiration for this story comes from a sadder tale - that of former hedge fund manager Robert Wilson's suicide... and, strangely, his great advice for young people.  During an email conversation with Bill Gates ('you', in this quote), he dropped this controversial quote:

When I talk to young people who seem destined for great success, I tell them to forget about charities and giving. Concentrate on your family and getting rich—which I found very hard work. I personally and the world at large are very glad you were more interested in computer software than the underprivileged when you were young. And don’t forget that those who don’t make money never become philanthropists.

I'm not the only blogger who seized on those lines - our friend Greg at Control Your Cash also noted how true that statement really was.

Really, youth is all about leverage.

Sure, as a 20-something year old you can make a minor, localized change in the lives of the unfortunate by physically volunteering for causes.  Yeah, you can also go straight from an overpriced college to the underfunded career of your dreams.  And, maybe, you can affect a few hearts and minds with your impassioned twenty-something thoughts...

But, no, you can't make as much of a difference as a 50-year-old ex-hedge fund manager.

Or, for that matter, you can't teach Biology as well as my High School teacher who also ran a funeral home... or my college professors who worked in the computer industry before becoming professors  (Or, if you prefer, the rich alumni who sent USC money and continued to work).  That hedge fund manager probably can't produce the same physical result as he or she could in her twenties - but also has an entire career of social connections, political experience and funding to dwarf the corresponding assets of the twenty-something.  There's no competition: any successful how to become rich plan starts with the vigor of youth.

How to Become Rich: Your Second Act

Sure, this all goes back to the difference between being Financially Independent and being Retired.

You can have a second act in America - and you can leverage the things you acquire in your first act to make the second act all the more successful.  Financial Independence earned in your first career means you can be worry free for what truly makes you happy.

The world is better off for Bill Gates becoming rich in software before trying to eliminate malaria.  We're better off that Warren Buffett became rich before giving Bill Gates his money.

And, the world is better off having a person like Mark Zuckerberg with billions of dollars in net worth, still at the helm of Facebook, and promising to eventually be a philanthropist with 99% of his eventual wealth.

The alternative?  An anonymous person with the same physical talents and age as Mark Zuckerberg building homes or digging wells in the third world.  No contest.

How could you believe otherwise?  Want to know how to become rich?  Make your money first.  Then worry about the rest.

 

 

      

PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and works and lives in the Bay Area with his wife, two kids, and dog.

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