Get Rich QuickPossible Applications to Life and Laboratory

DisclaimerThere is probably no worse person to advise you on financial decisions, so I wont.

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/hr1976 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.1990s private schools2000s LU, ATHM, BLDP

Why?PEOPLE

Jack DaviesSailors: Gale, Aklonis, JelinskiWanda WalczakWayne MatticeRandy Cush

CIRCUMSTANCES

Baby boomersEnd of industrial ageOutsourcingRapid advancements in technology of finance and entrepreneurshipEducational changes

Circumstances1970s

Cradle-to-grave with the same companyIndustrial rotationsHired because you had learned how to learnLetters of recommendation sought earnestlySocial Security secureStock market rises eventuallyOur loyalty was to customers, employees and stockholders, in that order. 1990s and maybe 2000s

Rightsizing and a golden parachuteSink or swimHired because you can contribute fastProduce or be goneSocial Security questionableStock market may be down indefinitelyOur loyalty is to stockholders, period. *Vincent Corbo, Herculesa close paraphrase, not direct quote.

Ulterior MotiveOne 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 arent all anymore

We still have not defined richA 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 workIf so, would it be even more fun without worry about money?

Do traditional virtues still work?Thriftdeeply ingrained into our cultureThe Thrifty HousewifeA Scout is. Investing this way at 5% yields $200,000 after a 30-year career. Big deal, but this is hardly an aggressive savings planand 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? Download from STSC website: InvestmentProfile.XLS. trustworthy loyal helpful friendly courteous kind obedient cheerful thrifty brave clean reverent.

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Invest100010001000100010002000200020002000200030003000300030003000400040004000400050005000500050005000600060006000600060007000

Rate555555555555555555555555555555

Years302928272625242322212019181716151413121110987654321

Asset4321.94237515074116.13559538163920.12913845863733.45632234163555.67268794446772.70988179886450.19988742746143.04751183565850.52143984345571.92518080337959.89311543337580.85058612697219.85770107326876.05495340316548.62376514588315.71271764557919.72639775767542.59656929297183.42530408858551.69679058168144.47313388727756.64107989267387.27721894537035.50211328128040.573843757657.6893757293.03756945.7566157350

Total200360.12218629

200360.12218629

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So, why do people need, or think they need, GRQ?Bad planning, worse execution.College for kidstuition up 100% in some states this year alone. Living longersure, the house will be paid off, but it only consumes about 12% of takehome anyway. Wed miss not spending the other 88%! Maybe you wont 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 HarvardWill tell you he hopes to complete his educationWhy hes 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 Americas 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)

People: two case studies: what will people do for money?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.

Rich Dad, Poor Dad Robert Kiyosakihttp://www.richdad.comA 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. 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.

Kyosaki in a nutshellLessons 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 & OptimismA 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 dads] 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 harshgraduates 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, Kyosakis 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.comKiyosaki says that our schools focus on preparing todays youth to get good jobs by developing scholastic skills. He thinks thats a bad thing. Its 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 and public schools, graduated from college and got an M.B.A. But I also attended the School of Hard Knocks for thirty-one years, and thats not such a hot educational 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, its the only school that teaches many things you need to know. Obviously, the best way to prepare for life is a combination of formal traditional education, reading, seminars, experience, and asking more experienced people for advice.

Elements of truth, but spoken like the West Point grad & Harvard graduate he is!

As Kiyosaki points out, most people were entrepreneurs just 100 years ago, if you count farming.

He does not point out that most were glad to be shut of it for Fords factories & $5/day.

Academic Platform to WealthAcademic life is possibly the perfect platform for carefully exercising financial creativity.Job for lifeHobby for lifeSabbaticalsSummers to pursue other interestsExtremely ironic: if poor dad ever existed at all, he may have been ideally suited to be a rich man.

Know thyselfMany 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

Rich Dad in the Lab

Financial WorldResearch WorldAn exit strategy for every investmentYupAdvice to the average investor: dont be average. There are easier and more profitable professions in which to be mediocre.Leverage technology.Absolutely. Look for opportunities along the way to goals.Yes!

Rich Dad in the Lab

Financial WorldResearch WorldDont look at risk, look at risk to rewardOK when you are ready for it. Univ. Admin. does not see it that way.Spread risks & keep moving to new areasHmmm.Never say I cant afford it. Never say We cannot do this.Make it part of your reality to get rich.Make it your reality to do, promote and publish great science.

ConclusionsThink 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.

ReferencesRich Dad, Poor DadRetire Young, Retire Rich both by Robert T. Kiyosaki with Sharon L. Lechter, C.P.A.www.richdad.com

I stand before you today, like most people, worth more dead than alive! So, why? While preparing (if that is the word for it) this lecture, I have considered the financial lives of certain people and also how circumstances of the graduate student have changed, judging both from their incessant whining and from rational observation born of middle-aged wisdom. The people and circumstances are not easily separated, so lets just go down the list.

Jack Davies was a Bill Daly student, with whom I was only loosely associated. He must have listed me as a reference, because one day I got a phonecall one day from an employerAnyway, this was actually the second time I was actually contacted by someone wanting to hire a PhD who thought it was probably a total waste of time.

The next group is some sailor retirees, or at least people taking an extended time-out. Why do they do this? How do they afford it?

Gale was a professor here who, with adequate preparation in vector calculus, thought that sailing the oceans might provide as much challenge and reward as a solid scientific career. Happily wedded to money, he was able to buy a boat and he is enjoying sailing it before ravaged by old age. I think he has reported some health problems, so he is glad he started early on retirement. And by the way, retirement is not just from classesthats the fun part. Retirement is also from committee assignments, boneheaded faculty colleagues, and stupid regulations.

Aklonis may be similar to Gale, but was enjoying a very strong career at USC when he sailed off. We can speculate that Jelinski is motivated by rat race and family illnesses.

Well come back to the other two in green.

Circumstances HAVE changed. The defining event of the last 100 years is probably still WWII and the baby boomers like me who followed. It has always been about us! We will retire soon, taking huge money out of the stock markets. That might depress them seriously. We will place large demands on health care. We will buy retirement property, raising prices in resort areas and possibly depressing them elsewhere. As an investment strategy, one could probably do worse than pandering to baby boomers.

The industrial age is not quite over and maybe we have not realized yet even how large a change it wrought on career, or what the absence will mean.

Outsourcing used to mean to small, private companies (e.g., send out for a GPC measurement). It may now mean relocate the whole operation, or large parts of it, to India, Mexico, Brazil and others. As an industrial employee, you might get a free trip to Indiato train your successor.

Technology means we can buy or sell anything, from anywhere. Say, you decided to make digital autocorrelators in 1976. Start a company, go to meetings, produce brochures and mail them at great expense, take out ads. In 2003, you start the company and a website. You e-mail potential customers. Sell it on E-bay, for chrissake!

Educational changes: a very mixed bag, but it is not obvious to me that todays student got practical training in finance (or many other things) that earlier generations did.

Can anyone compute compound interest rates? Balance checkbook?

For these and other reasons, the late 1900s and early 2000s remind one of nothing so much as the previous century mark, when snake oil salesman roamed the country. Todays tonic is getting rich quickly. Pretty creepy, but deserves a skeptical look and think-through. Just as net income does not specify the quality or importance of the assets, neither does the number of articles specify their importance or worth. Other measures, such as citations, matter.

Kiyosaki allows that taxes are necessary; the same is true of (some) committee work.

How far could my research go on my own spare change? The same is true of your investment potential!