The 3 Investment Values
I was 25 years old when I first began my lessons on investing with my rich dad.
“Most people dream of becoming rich, but it’s not their first choice. Only three out of a hundred people in America are rich because of this priority of choices…”
This was how I remember his first lesson…
“People who make security and comfort their first and second choices look for ways to get rich quickly that are easy, risk-free, and comfortable. A few people do get rich on one lucky investment, but all too often they lose it all.”
He was talking about the three choices or reasons everyone has for investing:
Most people make money in the order of choices listed above. This means that their priority is security, followed by comfort, and finally to be rich.
This is why most people make job security their priority. After they have a secure job, they focus on comfort. Being wealthy is the last focus.
The first reason most people invest is that they want to feel more secure. That’s why Social Security or a retirement plan is very popular with people whose core value is the need for security. Security is a very important aspect of investing. You don’t want to be destitute out on the streets with nobody taking care of you.
Unfortunately, many people are counting on the government or their employer to provide for their “comfortable” retirement. Here’s why they’re going to be sorely disappointed…
“Money Doesn’t Make You Happy” Is a Myth
Often, you hear people say, “I’d rather be happy than be rich.”
This astounds me. I’ve been both rich and poor. In both situations, I was also both happy and unhappy at various times. I wonder why people think they have to choose between happiness and wealth.
What I think people are saying is, “I’d rather feel secure and comfortable than rich.” That is because, when they feel insecure or uncomfortable, they’re not happy.
When it comes to money and investing, all three priorities are important. Which order you put them in is a very personal decision that should be made before beginning to invest.
My poor dad put “to be secure” as priority one, and my rich dad put “to be rich” as priority one. Before beginning to invest, it’s important to decide what your priorities are.
I’ve also never understood the statement, “Money doesn’t make you happy.” While there is some truth in it, I have always noticed that when I have money, I feel pretty good. The other day, I found a $10 bill in my jeans pocket. Even though it was only $10, it felt great finding it.
Receiving money has always felt better than receiving a bill for money I owe. At least that’s my experience with money. I feel happy when it comes in and sad when it leaves.
Security and Comfort Don’t Make You Happy
It’s not surprising that many people don’t want to believe that money can make you happier, even in the face of scientific evidence. Since security and comfort are the main drivers in most people’s lives, and they have complicated views of money from their childhood, it’s not uncommon for people to create narratives about money that justify their investment values.
For one, most people don’t have money, so they like to say “it’ll make you miserable” to make themselves feel better for not having it.
For some, their view of money is shaped by the teachings they had as children, such as money is the root of all evil, to be avoided at all cost, not talked about, and demonized. People who make money are the enemy. It’s the rich against the poor.
For others, money is everything. They’ll sacrifice friends, family, and integrity to get it. It’s a dog-eat-dog world. That is evil, but it doesn’t make money itself evil.
What’s Your Choice?
Starting at a young age, I had already decided I wanted to be rich. I quickly learned that to become rich I had to be willing to feel insecure and uncomfortable. That realization was a big factor in becoming rich. Most people have not made that decision. There isn’t a right or wrong decision, but it’s very important to make a decision.
If you are not willing to give up your comfort or security for the sake of being rich, there is nothing wrong with that. But, if that’s true for you, then that’ll determine what type of investor you ultimately become.
My poor dad was fixated on job security. The most important thing to him was having a good job. It was a value most of his generation shared, and one that he instilled into his kids from a young age. He assumed that job security meant financial security — that is until he lost his job and couldn’t find another.
On the other hand, my rich dad never talked about job security. Instead, he always talked about financial freedom.
Today, you might want to take the time to list the order of your values. You may need to work through your true feelings in the process. Talk seriously with your spouse or mentor. Make “pro” and “con” lists.
But I promise you this, knowing your priorities will save you many agonizing decisions and sleepless nights later in life.
At a minimum, I recommend becoming educated in financial security, which is feeling confident about your job and also confident about your ability to invest in both good and bad times.
If you have it in you, the best path, and one of the hardest, is choosing financial freedom. It takes a high level of financial education. It also takes a lot of passion, commitment, and vision.
But the payoff is worth it.
Play it smart,
Editor, Rich Dad Poor Dad Daily