Do You Have to be Smart to be Rich

i hope to reach a stage in life where i can accept this comment as a reflection of myself !
lots to learn from here.

 

Just don't stop learning, you will get there

 

The fact that you are here means you already know what the path is to becoming rich. You will learn most of what you need to know right here.

Think of all the folks you know who spend an inordinate amount of time on the internet researching stuff such as clothes, handbags, a new bike, a new car, a holiday destination, etc - compared to how many spend time researching investment vehicles and strategies.

You don't need to be actively buying every single minute either. It's a combination of mindset about investment versus doodad spending, and implementation of the practice - to strike the balance.

I personally haven't bought an investment since my workshop in 2009 (haven't been able to access finance due to what has happened with my business), but despite this; my mind is 100% in tune with the right financial decisions that need to be made to get more wealth.

I reckon that without that, I would have been bankrupt by now due to what has transpired over the last 4-5 years.

That alone is a step towards more wealth, because to simply survive has allowed us to sell our PPoR under our own terms, cash up a bit as a result, and now can move forward towards acquiring more assets.

 

I agree with you there.

A lot of people just do stuff because they see others doing it, without stopping to think, is this good or bad, right or wrong.
Pretty much a herd mentality and creatures of habit.
I'd bet if you question random people why they do certain things the way they do them, they probably couldn't give you a clear explanation on the spot.
I'd guess they'd respond with something like - because everybody does it that way, I've always done it that way or that just how it is.

I believe those who analyse their actions for everything they do will do the best in the long run, as there are always ways to optimise your efforts and results.

 

Fantastic post Ace. The problem is we are not taught anything about mindset. And many people think its nonsense.

How to develop sophisticated mindsets, how to use it, manipulate it and how it affects our physiology which then affects our actions which then affects our results in anything.

I so strongly believe it all stems from mindset. Nothing can change without first altering our perception of it first.

Just my opinion.

 

another reason I don't believe in common sense.

https://en.wikipedia.org/wiki/List_of_cognitive_biases

 

I took a sentence from your link,

" Cognitive biases are tendencies to think in certain ways that can lead to systematic deviations from a "standard of rationality" or good judgment, and are often studied in psychology and behavioral economics."


Exactly. And that is why highly successful people, be it athletes, in business or whatever spend so much time and money learning how to recognise this, counter this and replace it with a response/belief system that is going to maximise their chance of excelling. imo .

 

I said decent, hehe.

 

More like 4 houses on 700-750sqm blocks!

 

Really, there you go, wow, last time I was looking at houses smaller land component at around 290k

You must be laughing all the way to the bank, Syds Western suburb stellar performer

 

Ah may be in satellite suburbs....But Mount Druitt itself, definitely not.

LOVE Mounty County!

 

Yeah, there are different kinds of "smart". I was watching a doco on the weekend about Michael Mosley trying to get into Mensa, called Make Me Smart. He is "smart" enough to get into Mensa, but when they gave him some everyday tasks, he was only average.

To get rich @MTR, I think it takes a combination of personality (drive) and mindset. There are some self made millionaires that if you took all their money away, they would be able to get rich again.

OTOH, my brother in law controlled a multi-million dollar real estate portfolio and is now in debt, paying back loans on properties he hasn't owned for more than 5 years. Not smart.

It's like D.T. buying a state government owned block in Adelaide.

https://propertychat.com.au/community/threads/developing-in-adelaide.3390/

It takes a certain minset to take on Government red tape. It's not academic smarts. It also takes skills and knowledge to put together the deal and development: engaging surveyors, builders and tradespeople to undertake all the work that needs to be done and also obtaining finance.

I think this is the kind of deal and development that some academically "smart" people would struggle to put together or wouldn't have the guts to press forward in the face of government red tape.

 

yeah some would struggle, some wouldn't (lawyers perhaps) ...as for guts...not sure sure what this has to do with academic 'smarts'.

 

Mensa Investment club

Examining the results of the Mensa (a high-IQ society) investment club provides an amusing example. If any group should be capable of showing that more heads are better than one and that intelligence translates into market-beating returns, it should be Mensa.

The June 2001 issue of Smart Money reported that over the prior 15 years the Mensa investment club returned just 2.5 percent, underperforming the S&P 500 Index by almost 13 percent per annum. Warren Smith, an investor for thirty-five years, reported that his original investment of $5,300 had turned into $9,300. A similar investment in the S&P 500 Index would have produced almost $300,000. One investor described their strategy as buy low, sell lower.

 

Me neither.

 

Agree with the above.
Not sure what your brother in law did to lose money?? certainly some investors lose money because they make poor decisions, over commit comes to mind.

Not taking away from anyone in particular but I am a developer and I know we can all spout off the numbers/expected profits but what counts is the numbers at the end of the project, because a million things can happen in between, like the market going pear shaped.

MTR

 

He's smart but not smart with money. He sold a development at the wrong time and bought a new development site at the wrong time (in that order) and didn't consider the tax implications of selling up at the time. Due to debts incurred from the sale of the first development he had to sell another development at a loss. A finacially savvy person would have run the numbers and considered the tax implications. I guess that's my point. The mess he has got himself in finacially, you would swear he is an idiot. He's really not though. He is highly intelligent and very talented in other areas. It's just that he is basically financially illiterate and does not have a business brain. He is one person who is intelligent and talented but will never be rich. He has the wrong kind of "smart".

 

This is me. I qualified back in high school. But in many ways in real life, I'm hopeless. And I'm not rich. I come from a long line of very smart people, who ultimately wound up with nothing despite being quite successful for most of their working lifetimes.

This is part of my drive, as not only do I need to provide for my wife and kids, but also my parent/s, and maybe even more than this.

 

I was a member of Mensa. Got accepted when I was living in London. I was smart enough to not bother paying my membership after a few years, since it did bugger all except give me 2 crappy Mensa magazines a year.

 

The people and events always seemed a bit boring to me. My mate was nagging me to join but he was a bit boring and the whole thing seemed boring to me. I'm not sure I would get on with that type of brainiac. I would would get on better with other investors, and no annual fee!