Get Rich Quick
Possible Applications to
Life and Laboratory
Disclaimer
There is probably no worse person to advise
you on financial decisions, so I won’t.
Advice is NOT the point of this lecture.
Backing up my claim to
financial incompetence
1971 – Soda jerk $1.17/hr
1974 – Forklift driver & bean walker $1.73/hr
1976 – married art history major
1981 – Postdoc ($15K) instead of IBM ($30K)
1983 – LSU ($24K)
1983 – Sell house in tech boom state, buy lesser
house in oil bust state for more money.
1990’s – private schools
2000’s – LU, ATHM, BLDP
Why?
PEOPLE
CIRCUMSTANCES
• Jack Davies
• Sailors: Gale,
Aklonis, Jelinski
• Wanda Walczak
• Wayne Mattice
• Randy Cush
•
•
•
•
Baby boomers
End of industrial age
Outsourcing
Rapid advancements
in technology of
finance and
entrepreneurship
• Educational changes
Circumstances
1970’s
1990’s and maybe 2000’s
• Cradle-to-grave with the same
company
• Industrial rotations
• Hired because you had
learned how to learn
• Letters of recommendation
sought earnestly
• Social Security secure
• Stock market rises eventually
• “Our loyalty was to customers,
employees and stockholders,
in that order.”
• Rightsizing and a golden
parachute
• Sink or swim
• Hired because you can
contribute fast
• Produce or be gone
• Social Security questionable
• Stock market may be down
indefinitely
• “Our loyalty is to stockholders,
period.”
*Vincent Corbo, Hercules…a close paraphrase, not direct quote.
Ulterior Motive
One can draw strong parallels between
professional opportunity and the things
Get Rich Quick people advise.
Some are true, some not. Either way, GRQ
schemes are a fun read that can stimulate
thought.
Can you get rich by working for
someone else?
Define rich!
Academia
$100,000/year is not rich (Chemistry, 20 years)
$175,000/year is not rich (Engineering or MatSci, 20 years)
$500,000/year is getting close (Chancellor)
$1,200,000/year is rich (Football coach)
Industry
$90,000/year is not rich (start with postdoc)
$250,000/year is not rich (corporate scientist)
$5,000,000/year is rich (CEO)
Those “big two” aren’t all anymore
Academics
Teaching-oriented
Research expected
Entrepreneurship
Consulting
Inventing / producing
National & International
Laboratories
Military
Medical
Commerce
Instrumentation
Industry
Big multinational
Upstart
We still have not defined rich
A rich person does not need to work
another day, secure that adequate
assets for his or her desired lifestyle
are in place.
•
•
•
•
Would that be a good thing?
What non-work could you pursue full-time?
Maybe they are essentially the same as “work”
If so, would it be even more fun without worry
about money?
Do traditional virtues still work?
8000
Thrift—deeply ingrained
into our culture
“The Thrifty Housewife”
“A Scout is….
….
trustworthy
loyal
helpful
friendly
courteous
kind
obedient
cheerful
thrifty
brave
clean
reverent.”
7000
6000
5000
4000
3000
2000
1000
0
1
3
5
7
9
11 13 15 17 19 21 23 25 27 29
Download from STSC website: InvestmentProfile.XLS
Investing this way at 5% yields $200,000
after a 30-year career. Big deal, but this is hardly
an aggressive savings plan…and your employer
(when & if you have one) will tuck away more $$$
for you through a retirement plan.
Bottom line: Yes! If you start saving early, you can retire
rich at age 55 – 60. This risk-free path is available to
academics, industrial scientists who never lose their job or
divorce, and national lab scientists. Cool, eh?
So, why do people need, or think
they need, GRQ?
Bad planning, worse execution.
College for kids—tuition up 100% in some
states this year alone.
Living longer—sure, the house will be paid
off, but it only consumes about 12% of
takehome anyway. We’d miss not
spending the other 88%!
Maybe you won’t live longer: pressure to do
stuff before you cannot.
Maybe one reason for GRQ is that people who have
eschewed school have done very, very well lately.
Got into Harvard
Will tell you he hopes to complete his education
Why he’s richer than you:
http://philip.greenspun.com/humor/bill-gates
So, why? "There are probably more smart people per
square foot right here than anywhere else in the world,
but Bill is just smarter."
–Mike Maples, executive VP at Microsoft
Apparently, still clips coupons to save $0.50 on Dove
Bars! And drives his own Mercedes!
• Dell, Turner, Edison, Ford – all recognized changes in technology.
• None were truly masters of it….more like owners of it.
• All took risks, but not of the life-threatening variety that soldiers daily do.
•Many people are choosing this lifestyle, especially males.
•Many will succeed at some level.
•This is NOT surprising: 100 years ago, only ~12% of Americans finished high
school.
•That generation contributed enormously to America’s development.
•If these “school of hard knocks” graduates do succeed, do we expect them to
fund education with tax dollars when their academic past was crabby old math
teachers who only delayed their success?
•In most revolutions, academic elite are among the first to face elimination.
Educational Attainment, 1910-1998
(taken from http://ssocs.berkeley.edu/~olney/fall02/econ113/lect101702.pdf
who in turn cites Statistical Abstract 1999, Table 1426)
< 5 years school
H.S. Grad
College Grad
1910
23.8
13.5
2.7
1920
22.0
16.4
3.3
1930
17.5
19.1
3.9
1940
13.5
24.1
4.6
1950
10.8
33.3
6.0
1960
8.3
41.0
7.7
1970
5.3
55.2
11.0
1980
3.4
68.6
17.0
1990
2.4
77.6
21.3
1998
1.6
82.8
24.4
People: two case studies:
what will people do for money?
Wayne Mattice
Left LSU and Baton
Rouge for….Akron!
It is possible to separate
research from work:
--- Jim Robinson.
Research: one of several
hobbies you do for fun.
Work: what you do for money.
Randy Cush
Poker with shrewd
Europeans and
polishing the boss’
car did not work.
Earns a tad more
with his PhD than his
wife does without
one. What next?
Rich Dad, Poor Dad
Robert Kiyosaki
“If You Want to be
Rich and Happy
Don’t Go To School”
CashFlow Game
When a NY Times best-selling author
writes books with titles like this, it is time
to pay attention. Apparently, the book
was written well before Kiyosaki was
rich or a best-selling author.
A little more than the traditional
“buy property with no money down”
approach.
His main message: take responsibility
for your own finances.
Definitions of assets, put, hold, etc. that
are useful.
http://www.richdad.com
Kyosaki in a nutshell
Lessons taught to him by his “rich dad” while
his “poor dad” languished as an academic
administrator/professor.
He kept great notes for a 9-year-old!
Alternative viewpoints is putting it mildly.
Assets, Cash Flow, Leverage & Optimism
A good exposure to the philosophy of
money-centered people. Sociopath?
For scathing reviews of Kiyosake and
others, see: http://www.johntreed.com
“Contempt for traditional education and the educated
The book is almost entirely contemptuous of formal education and
those who have graduated from universities. He wrote another book
called If you want to be rich and happy, don't go to school? On page
64, he delights in the fact that “educated people” now “came at [rich
dad’s] beck and call, and cringed when he did not approve of them.”
This is a bit sick. ….. Kiyosaki takes the prize for the real-estate
guru with the most tangled psyche.”
Maybe a little bit harsh—graduates of the school of hard knocks are
often a little contemptuous of the well-educated. Example: Richard
Nixon
More from
http://www.johntreed.com
(Kiyosaki) says, “...the main reason people struggle financially is
because they have spent years in school but have learned nothing
about money.”
I disagree. The main reason people struggle financially is bad
decisions about getting an education, bad luck, too much spending,
too little savings and investing, too much reliance on organizations
for their livelihood, and not enough reliance on themselves.
Here, Kyosaki’s reviewer incorrectly
insists on an either-or position. People
ARE undereducated financially AND this
is why they do the things he identifies,
leading to “bad luck”.
More from
http://www.johntreed.com
•
Kiyosaki says that our schools focus on “preparing today’s youth to get
good jobs by developing scholastic skills.” He thinks that’s a bad thing. It’s
probably the right thing. Only a small percentage of people are suited to
entrepreneurship. Even future entrepreneurs usually need to begin as
employees to get their starting capital and to learn while they work.
•
I would be among the first to agree that traditional formal education is
lacking
in many ways.
I attended
Catholic
andlike
public
schools,
graduated
Elements
of
truth,
but
spoken
the
West
from college and got an M.B.A. But I also attended the School of Hard
Knocks
for thirty-one
and that’s
not such he
a hotis!
educational
Point
grad &years,
Harvard
graduate
experience either. As someone said, in the School of Hard Knocks they give
the test first, then the lesson. That is a slow, costly, painful way to learn.
Unfortunately,
it’s the only
“school”
that
teaches
many were
things you need to
As
Kiyosaki
points
out,
most
people
know. Obviously, the best way to prepare for life is a combination of formal
traditional
education, reading,
seminars,
experience,
asking more
“entrepreneurs”
just
100 years
ago, and
if you
experienced people for advice.
count farming.
He does not point out that most were glad to
be shut of it for Ford’s factories & $5/day.
Academic Platform to Wealth
Academic life is possibly the perfect platform
for carefully exercising financial creativity.
Job for life
Hobby for life
Sabbaticals
Summers to pursue “other interests”
Extremely ironic: if “poor dad” ever existed
at all, he may have been ideally suited to
be a rich man.
Know thyself
Many of the people I have seen become
discontented with their financial situation
are very altruistic.
Still, there are all kinds of wealth.
“Rich Dad” in the Lab
Financial World
Research World
Cash Flow = net income Paper Flow = # of
on assets.
articles on all projects.
(Legal) Tax Evasion
Hmmm….avoiding
committee work?
Leverage = using and
buying other peoples’
money, time & effort
It is OK to fail
NSF, NIH, DOD, EPA
$$$ for students, staff
and postdocs
Yup
“Rich Dad” in the Lab
Financial World
Research World
An exit strategy for
every investment
Advice to the average
investor: don’t be
average.
Yup
Leverage technology.
Look for opportunities
along the way to goals.
There are easier and
more profitable
professions in which to
be mediocre.
Absolutely.
Yes!
“Rich Dad” in the Lab
Financial World
Research World
Don’t look at risk, look at
risk to reward
1. OK when you are ready
for it.
2. Univ. Admin. does not
see it that way.
Spread risks & keep
moving to new areas
Never say “I can’t afford it.”
Hmmm….
Never say “We cannot do
this.”
Make it part of your reality to Make it your reality to do,
get rich.
promote and publish great
science.
Conclusions
Think about money sooner rather than later.
Believe people when they tell you getting
older costs money: kids, health, long
retirements all cost.
Separate education from earning.
Enjoy both.
References
“Rich Dad, Poor Dad”
“Retire Young, Retire Rich”
both by Robert T. Kiyosaki with Sharon L.
Lechter, C.P.A.
www.richdad.com