(Originally written March 2020)

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Generating real wealth is a journey. It’s not short term. You must put in a lot of work, and have the right frame of mind. You also need to make big bets when you feel in your gut that “it’s time”. We are presented with only so many golden opportunities throughout our lives – most consider grasping them – but only a small number of people actually do. 

That’s why so few become rich.

Doomsday-scenario stock market crashes like the one we’re currently going through is what separates the long term wealth generators from the majority of people: fearful, misguided, and short-term thinkers.

Real wealth generators are buying stocks now. 

They’re not selling. 

And they’re certainly not short-term trading.

They’re buying stocks, and building positions in quality companies for the long term.

They’re not worried about making sure if this is the exact bottom. 

They don’t care what you or what anyone else thinks.

Many new Millionaires, and dare I say it – maybe even some new Billionaires – will be born out of this crash. They’re in it for the long run.

Long term (wealth generation)
vs.
Short term (trading/speculation)

Traders are short term. They speculate (usually in their pajamas) on a day-to-day basis. Be wary of listening to anyone, ever, who doesn’t have the vision for long-term wealth creation. Buying, selling – dipping in and out throughout the past couple of weeks – doesn’t build wealth. It just reveals lack of conviction, and a reliance on short-lived dopamine shots.

Don’t let it get to your head. You’re in this for the long run.

Some might quip, “what about Jesse Livermore!”

Jesse Livermore… he made upwards of $100M at the time through short-term speculation. Traders today praise him as some genius. Livermore wasn’t genius. Shortly after making that ~$100 million dollars, Livermore lost it all, and then committed suicide by gunshot to the head. He didn’t think long term, and wasn’t even able to live with himself in the moment.

All that money went *poof* 

Easy come, easy go. 

Instead, let’s think about someone like J. Paul Getty during a time like this.

J. Paul Getty was an oil magnate, and a long term thinker.

In 1957, Fortune magazine named Getty the richest man in the world. By the mid-1970s, at the time of his death (June 6, 1976), it was estimated that Getty had built a personal fortune of up to $6 billion dollars. That was over 40 years ago.

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J. Paul Getty also wrote a book. I recommend it to you all: “How To Be Rich” (1965).

Getty said that his book was not intended to tell people how to get rich, but instead how to be rich.

How to be rich = long term wealth generation

Consider the story of Tide Water Associated Oil Co. 

J. Paul Getty first bought the shares in 1932, in the midst of The Great Depression. The Dow had dropped from a high of 380 in 1929 all the way down to 40 — a fall just shy of 90% in three years. Investors had dumped everything, and most everyone was not buying stocks. Getty first bought shares of Tide Water at just $2.12 per share. Five years later, they traded above $20. Some stocks he owned grew to 100x the value he originally bought them for.

Getty wasn’t trading stocks; in and out, day by day, in a time like this. 

He was investing meaningfully – with purpose – in companies for the long run.

Getty said:

“It is possible to make money — and a great deal of money — in the stock market. But it can’t be done overnight or by haphazard buying and selling. The big profits go to the intelligent, careful and patient investors, not to the reckless and overeager speculator. The seasoned investor buys his stocks when they are priced low, holds them for the long-pull rise and takes in-between dips and slumps in stride.”

Like I said earlier, we’re only presented with so many golden opportunities throughout our lives to continually build (upon) wealth that will last a lifetime (and beyond).

What were you doing during the:

2000 – Tech Bubble

2008 – Financial Crisis

2011 – Euro Crisis

2015 – Oil Crash

Now – Coronavirus Pandemic

Were (are) you buying, selling, or trading during these crashes? They were all incredibly opportune times to invest in stocks for the long run. For example, I’m still holding, and building a position in Starbucks since the financial crisis of 2008 (12 years later). Sure; companies come and go. But are you building real, lastingwealth; adding capital to quality companies that make up the core of your portfolio. If you’re not; that’s just trading.

Getty would capitalize on meaningful opportunities time and time again throughout his life.

For example, when stock markets plunged in 1962, Getty said all around him panicked but there was “little if any reason for alarm and absolutely none for panic”. He said: “As for what I was doing, the answer was simple, I was buying stocks.”

Are you buying stocks now?

It’s important to repeat: Getty bought stocks as a long-term investment, not to make a quick buck when the share prices rose once again. “Get-rich-quick schemes don’t work. If they did, everyone on the face of the earth would be a millionaire,” he said.

Remember: empty vessels make the most noise.

Real, lasting wealth generation is a slow, and boring journey. Quick one-day wins that you can brag to your friends or family about is not real wealth generation. It’s just noise. Nor is selling out of stocks out of baseless fear, or trying to time the exact bottom and thus waiting on the sidelines. Have confidence in yourself, and the future. 

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Real wealth takes time. It takes faith, and it takes conviction; in the world, your country, the market, and the stocks you love. Real wealth generators are in this for the long haul. They invest in quality companies, giving them the capital needed to grow, and in turn, will inevitably reap the rewards over a life-time (and beyond).