I often wonder if I’m brainwashing myself with the stuff I just want to hear.
Lately, I’ve been reading a lot of blogs, books, and other advice about self-employment and starting your own business. I’ve (mostly) convinced myself that working a 9-5 job isn’t the key to happiness and success in my life.
Of course, I haven’t always thought that way. I went to college for six years to study engineering – a field with much fewer prospects for entrepreneurship. Before doing that, I went to business school for one semester. It wasn’t just any business school – it was Babson College, which was (and may still be) the #1 ranked school in the U.S. for entrepreneurship.
I get a lot of the advice with how I live by from various bloggers around the web that have achieved success in their lives. But an interesting point (and one that I first heard from MJ Demarco, author of the Millionaire Fastlane) is that many of these successful bloggers or “gurus” did not achieve most of their wealth by following their own advice.
Now, before you think that I’m calling them hypocrites, I’m certainly not doing that. These people do follow their own advice, but they’ve gone beyond that in many ways to acquire most of their wealth. Here’s the proof:
JD Roth of Get Rich Slowly
JD went public last week with the story of how he sold his blog, Get Rich Slowly, almost three years ago. It’s a great story, and one that you should definitely read. I think it’s awesome that JD was able to do this. While JD doesn’t disclose how much he sold his blog for, the Dough Roller has a great article on financial blogs that have been sold and estimates of what they sold for. It’s almost certain that Get Rich Slowly sold for more than $1 million.
JD points out that he’s put all of his proceeds from his blog sale into a “nest egg” after he paid of his mortgage, and he continues to live off ~$48,000 of other income he generates by mostly writing. But, no matter how you dice it up, JD is almost certainly now a millionaire and is more wealthy than many of his readers via the sale of his blog.
Trent Hamm of The Simple Dollar
Trent is one of the masters of frugality and the author of The Simple Dollar. His advice is sometimes a little too extreme for me, but he’s offered a lot of tips and has undoubtedly helped tons of people. Nonetheless, I admire how Trent has grown the Simple Dollar and his dedication to producing useful content that undoubtedly affects the life of thousands.
But, like Get Rich Slowly, the Simple Dollar was also sold to another company for an undisclosed sum (see the Dough Roller post above), and it was also likely that it was a seven-figure deal. I’m sure Trent will continue to live a frugal lifestyle, but it’s unlikely doing so because of lack of wealth.
Dave Ramsey
Dave Ramsey boils down financial advice to the simplest level possible: pay off your debt, build an emergency fund, and save for retirement with as much intensity as possible. He advocates going all-out to do these things, and he’s very clear and effective with the advice he offers. He’s help tons of people turn their financial lives around.
As a result, he’s build his Total Money Makeover book and course into a financial empire. Dave has syndicated radio show, has appeared on Oprah and even had his own TV show for awhile. He now has several more books and courses that he sells. This site claims that his net worth is $55 million, which I haven’t been able to confirm elsewhere, but I wouldn’t doubt that it’s to far off.
You’ll still hear Dave tell his listeners to fund retirement accounts and sell their stuff to pay off debt even though he almost certainly doesn’t have to worry about any of these issues in his own life now.
Lesson Learned
I know it’s unlikely that any of us will duplicate the success of any of these people using the business models that they have. It’s much, much harder to create and grow a popular personal finance blog these days than it was in 2006 when these guys started. I don’t expect them any of these three people to spend the majority of their time or blog posts encouraging others to attempt to create a carbon copy of their success. But that’s not the point I’m trying to make.
My point is: if you’ve strictly followed these guys’ advice, you’d have a pretty darn good life (and maybe a great one). But you wouldn’t have the amount of wealth they have.
It’s nearly impossible to become a millionaire in your 20s, 30s or 40s by acting like a gazelle to pay of debt, maxing out Roth IRAs, and making your own laundry detergent.
What I’ve learned from this is that we shouldn’t take any advice so literally and accept it as the only way to do something. If you strictly followed tips from these writers, you most likely wouldn’t have a life (and a bank account) similar to theirs.
Instead, it’s helpful to look at how they were successful and consider that when determining which pursuits to take on in life. To put it simply for me, it’s come down to taking their advice and spending like they do, and not just seeking to earn and save like they suggest. If you do, you may “get rich slowly,” but it may be more slowly than you wish.
How do you feel about taking advice from people like this? Does their wealth affect your perception of their advice?
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photo by: velkr0
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