Do you really think it takes a genius to be rich or run a country? The reality is, it doesn't take a genius to do these things. Instead, it takes tenacity and grit.
Let's say you are 44 years old and over the past 10 years earned over $2.3 million in gross income. For someone who averaged $230,000 a year in annual income, what should your net worth be? If you follow my Net Worth By Income guide, your net worth should equal roughly 8X your average annual income.
Instead of having a ~$1,800,000 net worth, Marco Rubio (R) has an estimated $50,000 – $100,000 net worth. Are you kidding me? Where on Earth did the rest of the money go? I guess it's understandable why Senator Rubio raided his $68,000 IRA retirement account and paid penalties. He owns an $80,000 boat and a $50,000 Audi Q7 while starving for cash!
But if he can't control his spending impulses, he's NOT someone I want running America. Thankfully, he came to his senses and dropped out!
People Don't Like A Genius To Run Things
Marco Rubio's rise to national prominence shows that being able to connect with people is more important than being fiscally responsible. If the people wanted someone who was good with their finances, they wouldn't have voted for Marco Rubio.
For all of you who want to spend more than you make, take on a lot of debt to live a life you think you deserve, and desire to go straight to the top without putting in your dues, this is an important lesson to learn!
The other lesson to learn is that in order to achieve glory, you must have the delusional audacity to think you deserve to be King! Despite his financial shortcomings, Marco believes he deserves to be President. There is no way in hell Marco will ever become President. He won't even be elected to the Republican ticket. Yet he still spends all his time and donor's money on himself.
Lesson 2: Believe you belong and you'll go much farther than the person who never dreams. Once you have an abundance mindset, you will encounter many more opportunities.
Check out this great comment by FS reader Hubbard. Hubbard makes a strong case for why being fiscally responsible is not necessary for running a country.
Doesn't Take A Genius
“Statesmen often have huge weaknesses, but what makes them great is that they know how to overcome them. The job of running a government is so big that no one person can do it. So the President or prime minister delegates the finances to someone better suited. Here are three examples.
Alexander Hamilton was America’s first Treasury Secretary and put the nation’s finances in order. He was also always one step away from bankruptcy. After he left office, he astonished foreign observers with the hours of work he put in to stay solvent.
Abraham Lincoln was forced into bankruptcy as a young man when his business partner ran their store incompetently. As a state legislator, Lincoln’s signature initiative was a bond issue to raise funds for internal improvements in Illinois. The bonds were so badly managed that Illinois built no roads with the money and the sorry mess left the state in debt that wasn’t paid off until 1880 (15 years after Lincoln himself had died). Yet Lincoln was the most important President of the 19th Century and perhaps the most important of all time. He picked Salmon Chase to put the nation’s finances in order. Which was something the generally unpleasant Chase was perfectly suited to do.
Winston Churchill spent most of his life deeply in debt. If his supporters hadn’t bailed him out in 1938, he would have left politics altogether before the war.
There doesn’t seem to be much correlation between how good a man is with his money and how good a statesman he is. We finance nerds would like to think that. Whatever else our problems, if we can manage a household budget, then we could handle running a nation. It’s self-flattering and wrong. Running a nation and organizing your life so you can retire early are two different skill sets that do not necessarily overlap.”
Intelligence Is Overrated
It takes very little intelligence to be wealthy. Save 10% of your after tax income each year, and in 10 years, you'll have saved enough to live at least a full year without working. Save 50% of your after tax income each year, and every year of savings equals one year of not having to work. If you can save these percentages after maxing out your 401(k), even better!
With those savings, if you have a properly diversified portfolio of stocks and bonds, chances are high that over a 10, 20, 30, 40 year period, you'll have even much more than your initial investment. All it takes is discipline.
If you want more money, of course you aren't going to be too proud to take lower paying jobs to supplement your income. What kind of fool complains about not having enough money, yet isn't willing to drive a car, flip burgers, work extra hours, spend time hitting the books, start a website, or create a product if they are mentally and physically able? Everybody understands that sacrifice is essential to getting ahead.
Just don't entertain yourself for an hour by reading the comments in my post on those who do complain about life yet work less than 40 hours a week. All the excuses will either make you cringe or grow a huge sense of entitlement that won't make you want to work.
I'm so bullish on the future of America because time and time again, we are shown that anybody with enough desire can get ahead. Do not believe for one second that being super intelligent is a requirement for great wealth. Even if you screw up your finances, you've got multiple ways to get to the promised land!
It Does Take A Genius To Become Filthy Rich
Although roughly 15% of American households are millionaires today, I firmly believe the vast majority of Financial Samurai readers will achieve millionaire status by retirement. Heck, if you're able to last long enough to collect Social Security, you'll automatically possess a social pension worth probably over $1M based on today's interest rates. The 10-year yield is now at only 1.7%. If you make over $17,000 a year or $1,416 a month in Social Security, you have a $1M asset.
For those who are shooting for wealth beyond the $10,000,000 FU mark, then unfortunately, you'll probably need a lot of luck on your side. We can't all be filthy rich! But, we can all certainly be wealthy.
If millions of people believe Marco Rubio is worthy of being President with a <$100,000 net worth after irresponsibly spending like an entitled kid and “confusing” campaign expenses with personal expenses, then you and I should run for President Of Earth!
I highly encourage everyone to shoot for the ideal net worth of $10 million or more before retiring. This way, you can enjoy your life and feel like a genius as well!
Although it doesn't take a genius to be rich, it does take planning. I recommend signing up for Personal Capital's free financial tools so you can track your net worth, analyze your investment portfolios for excessive fees, and run your financials through their amazing Retirement Planning Calculator. Those who come up with a financial plan build much greater wealth over the longer term than those who don't!
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49 thoughts on “It Doesn’t Take A Genius To Be Rich Or Run A Country”
Fantastic article and comments too. Everyone works to parse the formula for success and no doubt much depends on the individual, the circumstances and how the cards we are given get played. But much like the reader responses by percentage certain trends always emerge! Over time those that prosper seem to favor hard work, perseverance and endurance. Markets go up, then down. Civilizations rise, then fall. Black swans glide onto the scene (tho hopefully rare) and havoc ensues. You can hoard cash, buy gold, lay low. But nothing beats hard work and conservative spending in line with your earnings. Staying the course and knowing you will persevere. Can you tell how I answered the poll??!!
I picked patience and a positive attitude. Patience because if you are systematic and patient you can get there. But you also have to have a positive attitude because that is what allows one to be patient. You have to be able to believe it is possible for it to work.
I agree about not needing to be intelligent to get rich. I see examples all around me. I studied hard, went to Stanford, then worked hard for years alongside other very bright professionals. We are doing well, but not rich. Meanwhile, my idiot brother in law (who never went to college) is worth millions. He is a construction contractor, and part owner of the business. Granted, he has worked hard too, but in a different way. But the guy is a total doofus. A loud, often drunk, big-dick-swinging, mouth-breathing, ignoramus. He proves that you don’t need college (let alone Stanford) – you just need to be in the right profession and work hard.
I got to the US a decade ago with $5k in the bank, a limited education, and some tech skills. My net worth recently clocked over the 7 figures. It would have come sooner, but I enjoy 6 month vacations, and eating out a little too much.
The opportunities America provides make building wealth very easy. It isn’t a choice between nice things and being frugal. The equation is very simple, just make sure that you earn more than you spend every year, and invest the difference. We all have nice things we like to splurge on, so work a little harder if you can’t afford it now. If you want the Audi and boat, then make sure you earn enough the year you buy them, so you can afford them.
Rubio is too stupid to have figured this out by his 40’s, which makes him a poor option to lead the country.
When in my 20’s and I wanted a luxury car, I bought a 3 year old one. You will be shocked what the 3 year lease does to the market value of 3 year old luxury cars. Typically at least 50% cheaper than new. The years I have taken a 6 month vacation, my savings were limited, but the other 6 months of those years, I worked extra hours to make up for it. The other huge advantage I have had, is avoiding living in the 3 expensive cities here (NY, San Fran, and LA). Unless you really have to, or are making huge money, you are just adding a decade or 2 to your working life by living in a high cost of living city.
6 month vacations?
In almost every other western country in the world (UK, Germany, Netherlands, Canada, Australia, Sweden, Norway, etc), it is very common to take 6-12 months off during your 20’s and even 30’s to travel and explore the world.
Typically you can travel in South America and Asia for about $10k – $15k for 6 months. Americans often spend this money on a new car instead of travel. I found it a really interesting cultural difference when I arrived here. Friends in their 20’s who made $30-$40k a year were driving new cars (unheard of back home), but didn’t have passports.
Do you think the 6-12 month route after university is good, or the work consecutively after university is the better route?
I feel that if I took the 6-12 month gap year/walkabout after college, I’m not sure if I’d been to retire early and walk about for the rest of my life. But who knows.
Personally, as I am a consultant, I have taken my breaks well after university. I could never have afforded to take a lengthy break without earning money first. I have spent about 18 months traveling in the past 12 years. So it likely cost me about $45k in travel costs, $120k in after tax income, leading to about $160k in lost net worth. It may lead to an additional 2-3 years working. Totally worth the experience in my opinion.
If you have the bank of mom and dad available, then traveling first could be an option. A few areas I think hold Americans back in exploring the world young;
1) Cars. Way too much money spent on cars. Many thing of cars like shoes, that only poor people buy used. In other countries, cars are thought of more like houses. Only rich people buy new.
2) College debt. Schools is very expensive here, and payback is not linked to income. Education loans in many countries is linked to earnings, similar to income taxes. So you can take 6 months out, and your loan repayments are stopped.
3) Culture. Many feel that jobs are difficult to find, especially if you are viewed as a slacker who took time off. I haven’t experienced that, but maybe that is because I work in consulting. Certainly in other western countries, in an interview if you talked about traveling the past 6 or 12 months, the interviewer is likely to see that as a positive, that those experiences likely make you a better more broadly skilled employee (ie, working out how to complete new tasks, interacting with customers from different backgrounds, etc).
I agree. I suggest more young folks do their walk about during their 4 years of college. Summer abroad is great. I did 6 months in China in 1997. Amazing!
Energy fades the older we get. Maximize the most of your energy while young and stop spending like you deserve everything already!
“Do not believe for one second that being super intelligent is a requirement for great wealth.”
I could not agree more.
After reading “The Millionaire Next Door” by Dr. Stanley, it really opened my mind. The average blue collar millionaires are all around us and we won’t even notice (plumbers, electricians, barbers, taxi drivers…)
The list goes on and on. Hard work, perseverance, patience and not keeping up with the Jones’ can take you really far. Capitalism is a blessing.
I think everyone should read that book.
What worked for me was work ethic and luck–maybe a bit of character/charisma helped me meet key people, too. Instead of “luck” though, it could have also been “right place, right time.”
Anyhow, since my last big successful project, I’ve always been quite fond of this particular quote:
“I am a great believer in luck, and I find the harder I work, the more I have of it.”
After going over the comments I can see the readers of this blog have financial discipline. But do note that one way to get rich is to become an elected politician, really. The severance and post job benefits are huge.
People who shows fiscal constraints dont get elected. The mass want big spender politician/President, to spend on them.
I wonder if in a way, people with intellectual aspirations have a harder time obtain wealth. Many of my professors and teachers at uni are very wise. And often show that they possess both a high IQ and EQ. Whom could earn double if not more they salary in the private sector, but still decide to stay because they care more about writing, teaching and learning.
Of course they are not poor by any means. With a decent salary and various consultancy-type gigs, but still. Unlike Sam Smith, they just don’t seem to have money on their mind.
I voted patience/discipline and a strong work ethic because those two are a sure way for anyone, no matter their background, intelligence etc. to obtain wealth. Working hard, saving and investing will make you rich after 2/3 decades. Although admittedly it is probably also the most boring way especially compared to the flashy way of celebs and forbes-stars.
I’m surprised that as of now only 16% of participants ranked being born rich as one of the two most important factors in becoming rich.
I can say from experience, that being born rich is the best thing that has ever happened to my wealth (technically, I wasn’t born rich, but my parents became rich when I was in high school, so the same advantages pretty much apply). I haven’t even technically inherited money, and I’m still much richer than my not born rich peers.
I find it funny that so many people now a days think that it’s so hard to get rich or get a head and boomers had it so easy. They could just start in the mailroom and work up to an executive position. That wasn’t a common occurrence obviously but they dont see that. They also don’t see that we’re in an era now where kids are getting rich off posting pictures on the internet and so many other avenues that didn’t exist. I think if anything it’s only getting easier to hit that millionaire status. Sure it’s not worth as much as it used to but hell it’s gotta be pretty damn good, right?
I voted “A Strong Work Ethic” and “Other. Please Elaborate.” Don’t mind if I do.
I would add “Time” and “Willingness to Invest in Your Future”. Perhaps I’m just restating “patience and discipline” with a little more specificity.
It is fascinating to see how little some of these candidates have managed to save. And hard to believe.
I’m truly amazed by this topic. I’m French and it is not really discussed here. We don’t have the same debt culture I guess. French newspapers are more likely to discuss the spouse, the alimony, the family money of a candidate rather than his net worth.
In the US, we value more about what the person has accomplished and can accomplish, less about his or her family’s background etc. Some focus on the spouse is fine, but the overwhelming focus is on the candidate. Makes sense right?
Yes ! Our current president is worth around 2M.
I think becoming a millionnaire in France is a team sport, nepotism at its finest ! In average we hit the 1M target much later in life, the salaries are much lower (but the minimum wage is higher).
The middle class is broader. You cant really get super rich super fast but you cant become extremely poor overnight either.
Having a broader middle class is what I love about Europe. Every time I go visit I am amazed by how much happier and healthier the population seems to be. It’s like everybody is taking a moment to smell the roses. You might enjoy this post about one of my excursions to Europe and my feedback. Let me know if you agree or disagree.
Sure but we have less opportunity to make it big. If you’re a doctor, you will barely earn 100k and half will go to the social support system as taxes…
Ive read your whole blog over a week so I already got to read it. I will comment there.
I work full time at my 9 to 5, I drive for lyft another 10 to 20 hours, I work on my website at least another 5 more if I have a project. I read business/financial books about another 3 or more at least a week in order to better myself and create more opportunities. When people talk to me about it they complain they have no time for these things, or their not good writers their cars are too dirty to drive people around. If people humble themselves and are willing to do what’s required to get ahead they would rather binge on Netflix and “relax” from their 9 to 5.
I agree with your point about sense of entitlement of some people in this country. If you’re born in America and complain about not having opportunities, you are fooling yourself (except for the truly unlucky folks who are born to broken families or drug addicted / careless parents). People born in middle class households and not working in their 20s is a travasty. I came from India on a student visa with $500 cash and $20k student loans. After finishing Master’s degree I couldn’t believe how lucky I was to be in America. 10 years later, today I have a wife who could afford to stay home for 2 years to take care of our first kid. Now she just started going back to work. We have a mortgage in SF bay area, healthy 401K and other small investments. I’m not bragging. We are always looking for ways to save and earn more.
Then I hear stories of kids of my American colleagues not finishing college because- I kid you not- he wants to play video games. Or a 25 year old living with parents and not working after college because “he is not getting the job offers he deserves”. These people just make me angry. They have a sense of entitlement which is ruining their lives and making them a burden on society.
Didn’t Clinton say that they were broke when they left the White House? They made it back up to the top pretty quickly thereafter.
What about if Rubio is instead “investing” by maintaining a lifestyle, making contacts, becoming more and more accepted so that once he leaves the White House can reap the benefits from the harvest as fast as the Clintons did and milk hundreds of thousands of dollars in speeches, bogus foundations, etc?
I’m sure he will get some $1M advance for a book deal after this race is over or something.
It is very hard to go broke as President. All your expenses are paid for. Your vacations are paid for. and you have a $400K salary.
Readers, how important is intelligence in becoming rich?
somewhat important, stupid people don’t tend to do well financially, but then again there are some smart people out there that don’t know how to manage finances. I think there is a certain amount of intelligence needed, but after that it comes down to character more.
How important is luck in becoming rich?
in being wealthy / financially independent? not too critically important. To being “bill gates rich”? very important.
Would you want someone who cannot control personal spending impulses to be president?
Hell no, unless they are an amazing leader, like Lincoln, I may rethink this (within reason….), but Rubio is nowhere close to lincoln. On the other hand though, you could argue that it doesn’t really matter because the financial system (ie central banks) is separate from government, so what does it matter (although I would argue against this, that a financially stupid president could create some financially stupid programs that run the government into more debt…..)
Are you as bullish on America as I am because of countless examples of average folks getting so far ahead?
there is definitely opportunity and freedom here, but I like the term “rags to riches to rags” a little better. most people that get into wealth end up losing it. maintaining wealth is a mentality. see the first question.
From what I can find, Bernie Sanders’ net worth is around $400k.
He makes $170k a year and has many more years (decades) under his belt than Rubio. I’d expect his income to be higher as well…
Check that…his net worth (not income) to be higher.
And I believe he has very large amounts of credit card debt…At his age I think that’s unacceptable.
I mentioned to a friend who supports Sanders. One of their suggestions that could make sense on the credit card debt and be somewhat forgivable is if that money was used for early self funded campaign expenses. It would be interesting to see if the credit card debt is new in the last year or so or if it always has been around.
Something that isn’t in the poll is “health”. If you or a family member have a serious illness (especially a chronic one), that can wreak havoc on your finances and potential.
And that’s not even bringing the conversation into how energy levels impact your thinking, planning, and execution.
If you have a healthcare plan that pay 100% all health related problem, a guaranteed pension plan, and expenses are paid while you’re out campaigning, you’d spend recklessly also.
By the way, Rubio is the most electable one because women vote on look. Hahah.
We’ll see how’s it’s going to turn out, Donald trump might not have 10B like he said he has.
My biggest concern about Rubio is that his irresponsible spending and low net worth makes him susceptible to donor control. In today’s superpac climate, it is too easy to buy a politician which has a great ROI. I want a president that works for the people not who seeks to please their donors to get that flow of money.
I agree with you on this case. Rubio is an irresponsible spender. What’s worse and unethical is that he used campaign funds to fund his personal expenses. No idea why anyone would vote for him, but I guess there is a community of people who relate.
He can be bought out because he cannot support his lifestyle.
I think a key to getting rich that isn’t on your list is to be taught (or to realize, but in my experience few people realize this on their own) the importance of saving/investing and the non-importance of material things. I have a lot of the advantages on that list (upper middle-class upbringing, nurturing parents, high intellect, decent work ethic and patience, lots of luck) and yet, if not for having been shown around the time I graduated college how much better it is to let your money work for you than to work (spend your time) to earn money, I doubtless would be on an ever-increasing spiral of increasing materialism as my income grew, with very little wealth being saved. Heck, I even remember my dad encouraging me in high school that if I could get a better part-time job that I could be driving around in a BMW. I never got that better job in high school, but the seeds of what could have been were definitely planted in my upbringing.
I selected patience/discipline and “other” (wise choice of life partner, aka spouse).
I think that’s a really good point (in regard to the life partner), but goes both ways.
If you’re single, you’re just responsible for you. In that sense, choice of partner doesn’t matter.
But once you DO choose a partner, they can raise you up, bring you down, or keep you in place. It really does matter.
+1 for wise choice of life partner.
A great partner is a force multiplier, making you better than you could be yourself.
An ok partner just is, neither a push nor a hindrance.
A bad partner will ruin your life – some combination of your health, sanity, or finances.
And make sure you get a prenup.
Being rich is a unsaid prerequisite for becoming President. Based on his salary Rubio is rich.
I’m looking forward to Kanye West running for President in 2020 :)
Great post. One point to consider though is that Rubio has 3 or 4 children and a stay-at-home. If he was single or had a responsible spouse, then I would agree with you. Luck plays a big role in whether u can achieve wealth bc u dont get to chose ur parents. The bottom 10-20% on the IQ bell curve, really have a very difficult time winning in this game of wealth building through no fault of their own.
You’re saying that Rubio is in the financial situation he’s in because his spouse doesn’t work or that he has four kids? Did you miss the part about him buying an $80k boat and a $50 luxury whip? You know who does that kind of shlt when they’re already massively in debt? Morons. I would never spend that kind of money if I had a mountain of debt, a low net worth, four kids and my wife stayed home to raise them. It’s misogynistic to place Rubios faults at the feet of his wife and kids and irresponsible to not hold a presidential candidate accountable for his decisions.
You’ve made your opinion on women quite clear: If they aren’t “hot, fit for life (whatever that means) and unwilling to quit working” to be a bigger part of their kids lives, then they’re a useless anchor who is free loading and should be divorced or dumped immediately. Now that the entire website knows this, you can kindly stop sharing it.
Kendall you have no kids and/or a stay at home. If you did, u would know the boat and the audi did not cause of his wealth problem.
U have trouble reading or comprehending or both, which may explain y u purportedly use ur charisma for success. Ur intellect certainly wont take u far. But it’s ok- obviously u didnt get to pick ur parents. LOL. Im 100% for women working.
I have no trouble reading. My wife and I both work full time, and she’s also in graduate school. My parents both worked six figure jobs. You clearly suck at inferring anything. When we have kids, I would rather they have a few extra days at home with a parent than some $9/hr day care worker. I support women working also. More importantly, I support the right for couples to make that choice together.
The boat and the Audi are a microcosm of Rubio’s wealth problems. You don’t buy those things when you can’t afford them. Just like some people may not be able to afford day care on the money they earn, so one person stays at home because it makes more sense.
Forgive me, but when I read “Ur intellect certainly wont take u far’ directed at me, I don’t put much weight in the words. I’ve just read enough of your posts to find you distasteful, offensive and superficial. I doubt I’m alone in that sentiment.
Neither one of my selections is polling particularly high so I thought I would expand on my thoughts:
Being born rich:
I don’t mean this in terms of the victimized thinking of only people who are already born filthy rich can get filthy rich, nor to imply that inheritance is a primary pathway to wealth. However, statistically speaking, being born “rich” has an incredibly strong correlation to later success in life. Part of the reason I think people dismiss this is that in American society it is taboo to associate oneself with being rich, or being born rich, because when you say “rich” people think of people making millions of dollars / year. Fact is people like myself who were born into a household where both parents were making low six figure incomes (household <$300k/yr) were born rich! All the opportunities that came from that in terms of good roll models, high expectations, strong education, all are primary drivers to my own success and wealth creation.
Displaying strong character and charisma:
It's easy to point to hard work, perseverance, and discipline as wealth drivers because again, these as qualities that it is "safe" to praise and emulate in society. While they are certainly important, I'd suggest charisma is much much more important to gaining large amounts of wealth. A new grad with charisma is likable at work and can easily foster a strong relationship with management, leading to high ratings and advancement opportunity. Someone in management with charisma can motivate their team to outperform, while influencing other groups. Upper level management with charisma can sway boards of directors, key customers etc… This isn't even getting into to networking advantageous, interviewing strengths, etc. Never overlook the value of charisma.
I selected charisma over work ethic as well. Just being likable and engaging can take you incredibly far in the corporate world. People want to work with people they like.
I’m with you.
I think what takes you far is being likable and engaging in addition to having strong work ethic and discipline. I think Cherishma, likable personality etc without a strong hold of your field of work and discipline only works short term. Quickly the mask is lifted and you’re sidelined. I have seen it happen too many times.
I thought the poll lacked the single biggest factor – a strong desire to be rich.
A lot of people who have the bulk of those positive characteristics don’t end up in the +$10MM level because it’s not one of their goals.
Fact is, there is opportunity everywhere you look. I am astounded at how many people complain you can’t get rich anymore. It has always been my belief if you just make an average salary, you should be fairly well off by normal retirement age. If you make an above average salary, you should be well off financially period. If not, you are either just starting out or you’re doing it wrong.
It’s just not sexy to say “save a couple hundred bucks each month and you’ll retire a millionaire.” How does that sell magazines, newspapers, or clicks to a website? :)
Slow and steady wins the race.