Let's Get Rich Slowly, Said No One Ever
The Real Path to Building Wealth
In the third grade, we were asked a question in class, do you want $1,000,000 or do you want a penny that doubles every day for 30 days? My younger self quickly did the math and realized $1,000,000 was the way to go. The math went a little like this, “Day One I would have $.01, Day Two I would have $.02, Day Three I would have $.04, Day Four I would have $.08, Day Five I would have $.16, Day Six I would have $.32.” I thought to myself, “Yeah, I am already six days in and only have $.32 to my name versus if I took the $1,000,000, I would finally be a millionaire. Easy choice, no way the penny comes close.” My answer was unanimous among the class, $1,000,000 was the way to go.
However, we failed to realize if we kept going with our math, we would have a much different story. $1,000,000 is the quick fix. We can change our life in a day, in an instant. However, a penny that doubles every day for 30 days tells a much different story. The story just takes time to write itself. The chart below illustrates it. You lag behind for most of the time but it all changes and changes in an instant.
On Day 28, you finally pass the $1,000,000 barrier and your penny has now turned into $1,342,177.28. By Day 30, you now have amassed $5,368,709.12. What once looked like an easy decision, now looks like a dumb decision as you could have 5x the amount of money in the same time frame had you not wanted the quick fix.
This elementary school example encapsulates the financial state of mind of the general population. Everyone wants to get rich quick. The idea of quickly amassing fortune is so much more appealing than amassing fortune over time. There is a reason why crypto, same game parlays, and 0 DTE have exploded over the past couple of years.
There is a reason why when you first open the FanDuel app what you see is a Same Game Parlay. People want that quick fix, the quick appreciation of money. The idea of turning $100 into $424 is so much more attractive than the idea of turning $110 into an extra $100 with a straight bet. Winning small bets over time and slowly building a bankroll just isn’t as sexy as hitting that big bet. What we fail to realize is how hard it is to hit that quick bet. Take, for example, this parlay below. You have to get four things to go right to even make money.
James Harden must record 10+ assists
Joel Embiid needs to score 30+ points
Jaylen Brown must make 2+ threes
Jayson Tatum has to score 25+ points
That is not necessarily easy. However, with a straight bet you just need one thing to go your way. Say you just took one of those bets, Jayson Tatum to score 25+ points, it would be much easier to slowly build as you don’t need four things to break your way, rather you just need one. There is nothing glamorous about it. It isn’t sexy so no one wants to do it. No one wants to be the person who sticks around to outlast the competition, they want to be the person who immediately vaults to the top and leaves everyone behind in an instant.
People so want there to be a quick fix, a quick solution that leads to a lifetime of wealth. Well, I am here to tell you that that path simply doesn’t exist because if it did, every breathing creature would be on it. However, this is not to say that there is not a path to wealth. The real path is the path that people do not want to take. The real path isn’t sexy. The real path requires you to persist. The real path requires you to build and take losses along the way. The real path requires you to stick around long enough to outlive the competition and come out of top as Howard Marks outlines to below.
The investor was never in the top half of his peers but in the end over 14 years, he was in the top 4%. He persisted and he slowly built over time, brick by brick. There is nothing sexy about it along the way but there is something sexy about it when you look back over the last 14 years and you see yourself in the top 4%. I am sure many of the top individuals in any given year didn’t last. They wanted that quick fix and it worked for a year but to continue that way is fool’s gold. No one wanted to be the guy who couldn’t even crack the top 50% in a single year. What is the fun in that? Some may even say it would be embarrassing. However, what those people fail to realize is this is the real path. The path that truly exists. The path that every breathing creature should want to take because in the end you have persisted and remained. The path that will give you the wealth you desire slowly over time, brick by brick.