Shaun Connell
A guide to business, investing, and wealth-building.

Predictions for the Future
(Plus, Previous Predictions That Came True)

You learn a lot about someone's way of thinking by how they predict the future. Many, if not most, people make all sorts of strong conclusions and predictions with little-to-no evidence and never realize how big of a deal that is when their predictions inevitably don't happen.

Nearly everybody claims, "I knew it!" about major social events that they absolutely, without question, did not know. Nearly every middle-aged dad in the world claims they "knew" they should have invested in Google, Bitcoin, and all sorts of other things they absolutely never saw coming. To see examples of delusional people who don't realize how comically ignorant their predictions are, just find anybody - usually a man - who is "thinking about day trading" for a living. Foolishness.

Below, I'll lay out the 7 fundamental principles for predicting the future, touching on similar concepts as I've written about in my article about how to predict the future. I'll then lay out the predictions at the bottom of the article, along with the dates of the predictions and the dates of any modifications.

Looking Back: Previous Predictions

2010 - SEO: 

Early in my career, I built websites that generated revenue by having traffic from Google searches. This is called "SEO" or "Search Engine Optimization." I was involved in several internet marketing forums and became an outspoken advocate for the idea that Google would soon be cracking down on nearly every "tactic" that worked. I was banned from two forums because I was scaring people. I decided to sell my biggest website before the big algorithm changed. Google eventually did change everything in 2011 - wiping out countless thousands of people, as I predicted.

I was still impacted, but much less than most people were because of my interest in forecasting major trends. To me, the lesson was to double down on accurate forecasts so that I could completely avoid at least some massive surprises.

2011 - Social Media News: 

I invested very early into Bitcoin but ended up liquidating my position because I believed that political news on social media was a massive opportunity. I threw my entire net worth into building what I believe was the first political news company that was 100% focused on social media traffic. I began in 2011, and in 2013 threw every penny I had into it and launched a website that became one of the most popular websites in the world with millions of visitors per day.

I then surprised nearly everyone who knew me in the industry by selling and completely getting out of the social-media news market. I decided to sell in 2014 and finalized the sale in 2015. It seemed stupid at the time, but I'll explain why below.

2013 - Bitcoin:

I've always found it exciting to try to be early to markets and predictions while still being cautious and nuanced. For example, in 2013,  I wrote that:

"[Bitcoin is a] massive possible opportunity [and] the possible payoff for the cryptocurrencies is simply staggering. If anything, the off-chance that the currencies become even medium-sized alternatives to fiat currencies is reason enough to put some money in the coins as a speculation."

2014 - Big Tech Censorship. 

Before "fake news" was being used to describe any media report that someone disagreed with, I was extremely aware of the future of censorship by major tech companies. It's weird to talk about now, but nobody was discussing censorship by big tech as a real thing in 2014 or 2015. It was an afterthought. To me, however, it was the biggest risk that existed. So I sold the business.

The website I sold? It doesn't exist anymore. It effectively shut down and was merged with another website because censorship wiped it out, just as I was concerned.

In 2019, a Pulitzer-prize-winning NY Times journalist reached out to interview me about why I was able to see that coming years before it was in any news cycle.

2020 - Covid.

When Covid first began spreading, I was the first person I knew who went into quarantine. I also shifted my entire retirement accounts into Treasury bonds because I believed that the dollar and related assets would skyrocket as people fled to financial safety. I was right. Then a few months later, stocks had imploded and I rolled my money back into stocks because it was clear that the money printing was going to create a massive stock-market boom. That also worked out.

I dabbled in options for the first time and made several hundred thousand from a tiny starting amount.

2021 - Interest Rates.

In late 2021, as in December, I scrambled to do a cash-out refinance of all of my real estate holdings, both personal and investment, in order to lock in long-term interest rates and pull cash out before interest rates went up. This ended up being perfect timing. Within a couple of months, rates had skyrocketed. This move allowed me access to nearly a million dollars more than I would have had and saved millions and millions of dollars over the next ten years.

Monetary economics is an incredibly useful discipline to understand if you want to monetize any prediction. It allows you to understand the news financially better, even when the news isn't directly financial. It does, however, require leaving political ideology and populism at the door. But it's ok, you'll get paid handsomely if you have the guts to do it.

Predictions aren't just fun, they're also lucrative. The universe rewards people who can accurately forecast the future. If you can see a market early, move fast, and sell before troubles hit, you'll have an extremely financially rewarding life. All of the above predictions (other than 2020 and 2021) were made before I was 26, and they allowed me to retire at 26. Pretty crazy.

Anyway, enough talking about previous predictions. Let's look at the principles for developing a good prediction:

7 Fundamental Principles of Predicting the Future

I've written a little bit about predicting the future before. It's endlessly fascinating.

  1. Accuracy, not ego. A good prediction is an accurate one in the sense that it is nuanced and has built-in acknowledgment of the fundamental limits of the ability to predict. If someone says that the DOW will be a specific number in 30 years, they're being idiots. If they give a range, they may or may not have some useful thoughts.
  2. Range, not specifics. As mentioned above, a good prediction is a range. Specifics miss the point. Ranges allow us to reposition ourselves to take advantage of multiple conflicting trends at the same time. Strategy requires ranges when forecasting, whether directly or indirectly.
  3. Complex, not overly simplified. Simplifying words is good for rhetoric and bad for thinking. The future has countless trillions of variables. The more overly mechanically someone views the future, the more you should stop listening to them. This becomes more true the further and further out a prediction becomes.
  4. Truth, not desire. What you like and what you predict are utterly unrelated. They're just different concepts. You can like something and understand there will be a backlash to it. You can hate something and understand it will still happen. My rule of thumb is to not get business advice from anyone who confuses these two concepts.
  5. Learning, not denying. When predictions don't happen within the ranges provided, it's a learning opportunity. This means you learn more from your failures than your wins. The goal is to modify one's mental models over time to become more and more accurate.
  6. Comprehensive, not easy. Sometimes, things happen so that you're both right and wrong. I made a small options trade a few months ago and then chickened out and sold. The trade ended up going to the moon, but I missed out. I was wrong. That said, it's important to understand the original prediction was correct and the chickening out was where things broke. Knowing the specifics of why something doesn't pan out is critical to actually learning from it. The goal isn't to beat yourself up for some weird reason. The goal is to become more correct and reap the benefits of being a person who is correct.
  7. Generalism, not specialism. Predictions based on specialized knowledge are often comically wrong. To some extent, predicting the future requires having an interdisciplinary education. Being a generalist is required. If you want to predict the future of AI, for example, you have to understand economics, sociology, political science, and all sorts of other frameworks. Otherwise, you're just making up stuff.

Fundamentally, some of the predictions will be annoyingly vague, because they should be comprehended, and internalized, but are impossible to comprehend with perfect specificity.

The Predictions

NOTE: These aren't created for anyone other than myself. Most of them will be hard to prove. This is a personal project, so that's fine.

FIRST UPDATED: 5/6/2023. Any additions or edits will have the later date next to them below.

AI Predictions:

  • Open-source generative AI, the kind behind ChatGPT, will revolutionize nearly every job that primarily exists in an office or with a computer. Nearly nothing will be untouched. This will be one of the fastest periods of creative destruction in human history.
    • The creative destruction will mint many millionaires and billionaires while shifting resources away from people who spent years building high-paying job skills. Even if the net impact is positive, most people will be focusing on the fear of destruction rather than creation.
    • The extra economic efficiency, IE, new wealth, will dump money into surprising secondary industries at an even faster rate. For example, travel, food and beverage, and entertainment will all likely utterly explode over the next 20 years.
    • The speed will cause panic as people demand more government regulations, welfare spending, etc.
    • The abruptness will provide a meta-narrative for people who are looking for excuses behind life failures. This will become part of the foundation of populism on both political sides of the US political system.
    • Google will either find a way to "punish" AI content in general, or double down on authority for websites even more than before. There will be a short window of opportunity for a couple of years for small SEO-oriented publishers to use AI tools to make money before they are wrecked by Google modifying their algorithms. The solution will be to sell early or become large.
    • At least for a while, Google will have a hybrid search result system for many searches, with AI answers at the top and the "list of links" below. It's possible the list of links will continue to become less and less prominent.
  • There seems to be no way to stop human calamity from being trigged with advanced AI as some part of the catalyst. Most people focus on AI taking over to kill us, but much more likely is that jailbroken or open source or private AI models will be used to unleash unimaginable harm.
  • The rise of AI will allow hacking, spamming, scamming, propaganda, terrorism, financial crimes, and pretty much everything bad to happen with drastically less cost to bad actors. The economics of sabotage will forever be changed.
  • The rise of AI will require a completely rethought approach to user authentication in the future. Because AI soon will be able to perfectly mimic a human, there will need to be some sort of system eventually created that uses the "real world" to authenticate who is real. This could start simply with a letter in the mail and could become fairly complex, using some sort of blockchain system.

Political Populism 

  • Populism is quickly becoming the only political framework that even practically exists. The never-ending feedback loop of the Internet is convincing nearly everyone that life is getting tougher, the elites are really, really mean, the common person is trying their bestest, and we shouldn't trust any institutions. I personally believe this is utter hogwash, but it's irrelevant. Populism will only increase until basic policy discernment becomes political suicide. We're already halfway there. If you don't pretend to be stupid, you can't get people behind your policies.
  • Banking, the miracle behind modern prosperity, is hated by nearly every regular person because they don't understand nearly anything about monetary economics. This is disastrous, as modern banking requires the state to safeguard the banking system, which is itself a creation of the state. Political ideology is stronger than a society's self-preservation, as history shows. So people will continue to undermine the banks and hate politicians who do anything that could be seen as pro-banking. Eventually, a massive financial crisis could threaten the world order and the politicians could step aside in order to save their skins rather than the global economy. This is the greatest threat facing humanity, other than existential dangers.

Inequality

  • There is no scenario where financial inequality gets "better" other than a drastic, radical leftist redistribution of wealth, and even then, the poverty created will probably reinforce the inequality.
  • The rise of improved technology leads to the rise of inequality, even if the lives of the poorest become better. Because of this, we're about to see a surge of inequality that has never been seen before in history as AI utterly revolutionizes nearly every aspect of life. The rise of foolish populism and the increasingly destructive culture of excuses will also further the inequality divide. The inequality will be both wealth and income.

Social Unrest

  • Social change is speeding up and social change causes social conflict which causes more change. Over the next few decades, we'll see a rise of social conflict much worse than in the 60s in the United States as more and more people feel victimized by institutions, isolated because of the internet, and overly self-aware of their own mental health issues without any way of helping themselves becoming healthier. Emotionally unhealthy people often turn to politics to find a sense of meaning, so buckle up.

Mental Health

  • By nearly every standard, mental health will continue to deteriorate. Effectively nobody in the world has a direct incentive to help people become emotionally healthier. Therapists are paid to tell customers what they want to hear. Algorithms are designed to tell people what they want to hear. As pop psychology continues to become more popular, there will be an emotional hell to pay. Anxiety, depression, and pharmaceutical abuse will all continue to become worse for some time.

Material Prosperity

  • By nearly every standard other than social conflict and emotional health, life will continue to get better, other than occasional catastrophes like wars and natural disasters. Right now, material prosperity is bizarrely accessible to anyone who is mostly healthy and makes a few good decisions. It's easier - even with high prices - to buy a house, find a job, learn new skills, start a business, become a millionaire, retire early - you name it, it's better and easier. TVs are better, computers are better, movies are better, food is better, travel is easier and better, and hotels are nicer. This trend will continue until a prosperity eclipse where prosperity is so high all improvements become nearly indiscernible. This could be understood as "Prosperity Singularity." You heard it here first.
  • The only real wealth eventually will be what is valued and scarce, which will be much more limited than what is valued and scarce now. For example, the ultimate luxury won't necessarily be a large house, as pretty much anybody can have one in a few decades. The real luxury will be the right location, which can't necessarily be replicated in the same way. To put it another way, there's only one New York City, even if life is great in the rest of the country.

Prosperity Denial

  • Just because things are getting better materially doesn't mean people are actually going to feel better, believe things are actually better, or understand that life is becoming easier materially. Expectations will likely rise even faster than prosperity increases, especially for the vast majority of people who have their emotional health continue to decline, as discussed above. This ties in with the earlier thoughts on populism being the only political framework, to some extent: both the left and the right will continue to double down on the notion that people are being screwed over by the mean elites, even as the elites continue to push for a society of unimaginable prosperity. The cognitive dissonance is already so bad, most people will probably barely be able to even comprehend my argument here. In the future, it will be much worse.

Return to Tradition

  • Unlike most conservatives, I don't believe that all traditions are going to go away and the future only belongs to the left. There will likely be a massive rise in old-school traditional roles and values but modified to work in a modern social system. We could see a massive surge in interest in women becoming homemakers, people choosing chastity over sex-positive ideology, etc. This will probably surge as one of the few potentially successful responses to the mental health implosion that seems imminent.

As time goes on, I'll add to the above predictions.

Caring too much about what other people think about you puts you on the fast track to a life that is dissatisfying, hollow, and unnecessarily painful. Assuming that isn't what you want, this article serves as a crash course in Stop Caring 101.

Our human instinct to desire the approval of other people might have been necessary for survival in the cave days, but it doesn't mesh well with modern life.

If you're ready to take charge of what you can control in life and make yourself into the person you want to be, shifting your energy away from other peoples' thoughts and opinions about you should be high on your priority list.

Do yourself a favor and read through this entire article. If you stop caring about what other people think about you, you'll feel a sense of liberation you've never experienced before.

Why Do We Care What Other People Think?

Before I get into how to stop caring what other people think, it's important to dive into why we care in the first place.

Evolutionary Reasons

Back in the days when humans co-existed in the wilderness with saber-toothed tigers and wooly mammoths, people had every reason to not want to get left behind.

santa cruz cuevas de las manos
The instinct to care what people think has evolutionary roots that stretch back far before modern civilization.

Before the safety net of civilization, the world was filled with perils we don't think much about anymore-- starvation, exposure, and predators, to name a few. Staying alive depended on being a part of a close-knit tribe or clan. To survive in that world, group inclusion was a must.

In a modern context, though, this instinct can manifest itself in ways that are practically absurd. A few thousand years ago, you might have understandably felt tremendous fear when kicked out of the group to fend for yourself in the wilderness. Sounds pretty reasonable, doesn't it?

These days, however, the same anxiety and terror might arise in response to the mere idea of receiving negative comments online or being judged for your clothes, looks, profession, or personality.

From an evolutionary standpoint, caring what other people think makes perfect sense when you only have two choices: belong or die.

We don't live in that world anymore, though, and fixating on the perspectives of others will most likely keep you from living a productive, meaningful, and fulfilling life.

Neurological Reasons

So, what is happening in our brains when other people approve of us?

One study from University College London and Aarhus University in Denmark found that when other people agree with and validate our own opinions, the area of our brains associated with reward is much more active.

These researchers also found that some people seemed to be more influenced by the opinions of other people than others, which they could actually predict by looking at their brain activity.

If you are guilty of caring too much about what other people think, you can cut yourself some slack by realizing that we are, to some extent, evolutionarily and biologically programmed to value the opinions of others. That being said, it is possible to overcome this impulse and improve your life dramatically.

A Brief Disclaimer

One more thing before we jump in: there are definitely benefits to having a sense of belonging within a group. This primer on how to stop caring what people think is not advising that you should stop being empathetic and alienate yourself from everyone you've ever known.

aerial image of people on pavement alienated from one another
There is a fine line between learning how to stop caring what other people think and losing your ability to be empathetic and learn from others.

Humans are fundamentally social creatures, and it's important to have deep connections with other people. Experiencing a feeling of belonging with a group can help us manage stress, be more resilient, and support the stability of our mental health, to name just a few of the benefits.

After all, one of the greatest gifts and joys of life is the wealth of family and friendship-- truly knowing and loving other people.

On top of that, the feedback and opinions of other people can be incredibly valuable. Not caring what other people think about you doesn't mean closing yourself off from the useful perspectives of others.

Sometimes, people you love and respect can hold a mirror to you in a way that helps you grow. No one is born perfect, and we can learn a lot from others. The point is to be able to stay centered in yourself and discern valuable feedback from superfluous, judgmental, or superficial opinions.

Many of us, however, go way too far when it comes to caring what others think.

It is far too easy in our modern world to let other people's opinions (or worse, our lousy guesses of what we think other people will think) dictate what we do, how we act, what we say, and, ultimately, who we are.

Caring About What People Think of You: The Potential Costs

Ok, so now we have a picture of why we tend to care way too much about what other people think.

The next step is to understand what this might be costing you.

“Care about what other people think and you will always be their prisoner.”

—Lao Tzu

Never Really Knowing Yourself

This is a big one.

It's possible to go through your whole life letting other people define who you are without even realizing it.

When this happens, you deny yourself one of your greatest powers: the ability to deepen your relationship with yourself over the course of your life.

man looking in mirror to know himself better and stop caring what others think
If you focus your attention on what other people think about you, you could go through your entire life without ever knowing your true self.

“The greatest fear in the world is of the opinions of others. And the moment you are unafraid of the crowd you are no longer a sheep, you become a lion. A great roar arises in your heart, the roar of freedom.”

– Osho

When you don't know yourself, how can you know what you want out of life? How can you know what your goals and purposes are? Hint: you can't.

Being a Pushover

When you value what other people think over your own thoughts, opinions, and beliefs, you're on a one-way path to becoming a pushover. The fear of negative judgment can leave people unable to stand up for themselves and make them easy to influence or manipulate.

Disappointment

When you care too much about what other people think, you're bound to spend your life disappointed.

Why, you ask? Because you can't actually ever please everyone.

woman on a dock by a lake disappointed by the opinions of others
Caring too much what other people think and trying to please them will likely lead to disappointment and unnecessary pain.

Even when you do everything in your power to fit in and be accepted, you simply can't control what other people think. This means that you could spend your entire life expending energy in a way that is ultimately fruitless.

Not Pursuing Your Goals

What do you want to do with your life? When you're old and gray, what do you want to look back on your life and know you've done? What will you regret not having done?

“Most people are other people. Their thoughts are someone else’s opinions, their lives a mimicry, their passions a quotation.”

— Oscar Wilde

When you're too concerned with what other people think, it can keep you from pursuing your life goals or even knowing what they are.

Valuing Other People's Thoughts and Opinions Over Your Own

Caring too much about what other people think isn't a new phenomenon. The infinitely wise Roman Emperor and Stoic philosopher, Marcus Aurelius, observed this aspect of human nature nearly 2,000 years ago:

“We all love ourselves more than other people, but care more about their opinion than our own.”

Marcus Aurelius

crowd of people that judge other people
Why is it so easy to assume that other peoples' perspectives are more valuable than our own? If we can overcome this, it can rid of us unnecessary anxiety and let us live the lives we want.

If you put too much stock into what others think, you'll be devaluing your own perspectives. It might even mean you don't know what your own perspectives are.

Anxiety

If you are fixated on what other people think about you, you likely deal with a good deal of anxiety. Caring about what others think can lead to constantly burning energy obsessing over how you will be judged or praised for any little action.

Anxiety can range from unpleasant to debilitating. No matter the scope, it can seriously get in the way of actually living the life you want. On top of that, it can lead to a long list of physical ailments.

If you want to free yourself from anxiety, learning how to stop caring what people think about you will go a long way.

Not Living the Life You Want

Finally, you probably won't live the life you want if you're prioritizing what other people think.

woman in field with arms open no longer caring what others think
If you're too concerned with what other people think, it can mean you never engage with what is truly meaningful to you.

“Your time is limited, so don’t waste it living someone else’s life.”

— Steve Jobs

You want your loved ones to live fulfilling and purpose-driven lives, don't you? So why wouldn't you want the same for yourself?

One of the first steps on that journey is letting go of the attachment you have to other people's affirmation, validation, and positive opinions of you.

Our lives on earth are finite. Once you stop caring what other people think about you, you can begin living the life you want.

Stop Caring 101: How to Not Care What People Think

Now it's time to look at some of the practical things you can do to stop overprioritizing the opinions and thoughts of others.

Get to Know Yourself

It is terrifyingly easy to go through your whole life never really knowing yourself.

If you don’t know who are you, you’re a lot more likely to let other people’s opinions define you and your sense of self-worth. When you don’t have an intimate relationship with your true self, there’s a good chance you will live your life driven by external forces or focused on pleasing other people rather than fulfilling your dreams, goals, and purposes.

man walking in forest getting to know himself
Getting to know yourself can be scary at first if you've spent your whole life overvaluing the opinions of others.

The importance of getting to know yourself is quite clear: when you don’t know who you are, how can you possibly be making the best decisions that define your life?

“Nothing gets us into greater trouble than our belief in untested advice; our habit of thinking that what others think as good must be good; believing counterfeits as being truly good; and living our life not by reason, but by imitating others.”

— Seneca

If you’ve never spent much time getting to know yourself, starting the process can be scary. After a while of some dedicated self-work, though, you’ll find priceless wealth inside yourself.

Getting to know yourself is a process you can go through for the rest of your life. One of the best things you can do to discover your true or inner self is to simply sit quietly. We are constantly inundated with other people’s thoughts, ideas, images, marketing tactics, etc.

boy sitting on bench by tree not caring what others think
You probably won't get to know yourself any better staring at that screen. Make a habit of putting down your phone and finding a nice place to sit quietly with your own thoughts.

Sitting quietly with your own thoughts can be surprisingly difficult if you’ve never made a habit of it. In a time before radio, TV, the internet, and smartphones, quiet meditative time was often built into the daily life of humans around the world. These days, we have to purposefully seek it out.

“Everyone rushes elsewhere and into the future, because no one wants to face one's own inner self.”

– Michel de Montaigne

When you’re getting to know yourself, remember to not be too hard on yourself. It’s also important to recognize when you’re focused on who you think you should be rather than who you are. Instead of judging the thoughts and feelings that come up, realize that finding the truth of who you are is the most important thing.

The more you are in touch with who you are and what you want out of life, the less likely you will be to let other people’s opinions bother you. Even if you do find yourself caring about what people think way too much, you’ll always be able to return to your inner resources and stay on your chosen path.

Identify Your Core Values

What are your values? What are the underlying principles you hold that dictate your sense of what is important in life? What are the core ideas that are driving you to do what you do day in and day out?

If you have no idea, don’t worry. It’s possible that by discovering what your values are, you will be much less likely to care about what others think about you.

“If an action or utterance is appropriate, then it’s appropriate for you. Don’t be put off by other people’s comments and criticism. If it’s right to say or do it, then it’s the right thing for you to do or say.”

– Marcus Aurelius

If you start to look into the concept of values in ethics and social sciences, it can start to make your head spin. There is some debate about whether some ideas that are considered values are intrinsic while others are better classified as vices or virtues. Don’t get too caught up in this level of thinking when you’re starting out– instead, just focus on the ideas that you believe are important and that inform the decisions you make.

Some examples of personal values, in no particular order, are:

  • Loyalty
  • Family
  • Empathy
  • Integrity
  • Compassion
  • Humility
  • Self-reliance
  • Honesty
  • Generosity
  • Altruism
  • Freedom
  • Gratitude
  • Courage
  • Wisdom
  • Patience
  • Dependability
  • Open-mindedness
  • Personal growth
  • Frugality
  • Flexibility
  • Self-responsibility

We all pick up values along the road in life, whether we realize it or not. Maybe you have values that you learned from your religious faith, your parents, your community, or your culture. Maybe some of your values developed during your own path of personal growth.

man jumping with courage knows his values and doesn't care what others think
Values-- like courage-- can be instilled in us by our culture, religion, community, and family. We can also deliberately cultivate values and overcome vices through careful attention and practice.

When you’re making a list of your values, try not to censor yourself too much.

Don’t write down the values you think you should have, write down the values you feel really guide you. If there is a discrepancy between your values and how you act, this is a great way to discover it and begin a new, exciting process of growth.

When you have a sense of your values, you basically possess a map that you can carry with you through life. This can be of tremendous benefit to you if you feel that you care too much about what others think of you.

If someone expresses a negative opinion about you or accuses you of doing something wrong, you can simply refer to this map.

Are you acting based on the values you believe in? If not, you can be grateful to the person for helping you realize that you’ve wandered off your desired path. If you are, though, you have a lot more mental strength to not be bothered by criticism or judgment.

Learn to Take Ownership of Your Feelings

You might think that caring what other people think is a sign of a selfless, humble person.

In reality, though, it can also be a symptom of not taking responsibility for your own thoughts and feelings.

When you obsess over what people think and let their opinions dictate your life, you're essentially letting them live rent-free in your head.

smiley faces in a box not caring what people think
Taking responsibility for your own thoughts, feelings, and perspectives can help you overcome the urge to care too much about what other people think.

You don't have control over what people say about you. What you do have control over is how you react to the negative, baseless, or unflattering opinions of others.

"You have power over your own mind - not over events. Realize this, and you will find strength."

Marcus Aurelius

From a Stoic standpoint, you'll want to learn to accept things you can't control and focus on the things you can control.

What other people say, do, or think isn't something you have direct power to change. What you can control are your mindset, reactions, attitude, opinions, and beliefs. You can control your own mind, and if you succeed in doing so, you will change your life.

Stop Trying to Be Perfect

It's great to aim high in life, but being a perfectionist can seriously hold you back. What is perfection, anyway? Whose definition of perfection are you using?

“Some people say you are going the wrong way, when it’s simply a way of your own.”

— Angelina Jolie

If you care too much about what other people think, it can mean you do everything in your power to not be seen in a negative light. While it might feel nice for our ego to never have anyone witness us make a mistake, mistakes are how we learn, grow, and mature.

"The perfect is the enemy of the good."

— Voltaire

When we focus too much on being perfect, we can value the feedback we receive from others far more than our own personal growth. If we're more concerned with avoiding failure than bettering ourselves, we're seriously holding ourselves back. In the words of Theodore Roosevelt, "the only man who makes no mistakes is the man who never does anything."

Escape the Affirmation Cycle

The affirmation cycle is something that pretty much everyone gets caught up in at some point in their lives. Some people even spend their entire lives there.

No, I’m not talking about the New Age sense of affirmations where you say positive things to yourself every day to achieve success in life.

I’m talking about the affirmation and approval that we seek and receive from others throughout our lives. Maybe you received validation for being good at sports, creatively talented, or for getting good grades. Maybe it's for your looks or personality.

It’s all too easy to get addicted to receiving the approval of others, so much so that you let the expectations and opinions of others rule you’re entire life.

On the other hand, maybe you didn’t receive enough affirmation in your life. Maybe you were constantly seeking the approval of your parents or another authority figure, always to be left hanging. This can keep you scrambling for pats on the back in your life, rather than fulfilling your own goals and purposes.

When you are so focused on receiving affirmation and validation from other people, you tend to:

  • Feel anxious about leaving your comfort zone
  • Avoid doing things that matter to you because you are worried about what others will think
  • Burn time and energy concerned about what other people expect from you
  • Reject opportunities that could be growth experiences because you’re afraid of failing and not receiving the affirmation you need

It is, sadly, possible to go through one’s entire life without ever really getting in touch with the inner self, the true self. It is possible to only be concerned with what other people think is good, what other people want, and what other people give you validation for. This is a terrifying premise, to me at least, and I expect that it is to you, too.

Realize You Can’t Control the Opinions of Others

It’s natural to want to have control over our lives. The reality is, though, that a lot of the things we encounter are completely out of our control.

girl with hands on her head looking out window thinking about other peoples opinions
Trying to control the way that other people see you is an easy way to drive yourself mad, and you have to accept that what other people think is ultimately out of your control.

If you’re a student of Stoicism, this is probably an idea you’re familiar with. If you aren’t, stick with me for a minute.

Your entire life can change if you start to distinguish between the things you can control and the things you don’t have control over. It might seem distressing at first to accept that there are things you can’t control. After all, if you don’t have any sway over what happens, isn’t life just chaos?

If you sit with this idea for a while, though, it can be incredibly liberating.

According to Epictetus, one of the great ancient Stoic philosophers (and a slave for the first chunk of his life), we have control over very little. We don’t have control over:

  • External events that affect us
  • What other people say or do
  • Our own bodies
  • Our property

That’s right– not even our bodies are fully under our control.

You might be wondering, what does this even leave for us to have control over?

The answer: our opinions, our thoughts, our desires, our aversions, and our own actions.

That’s right. You have control over how you think and feel. You have control over how you react to the things that happen to you. You have control over what you do and do not do.

What that means is that other people don’t have control over how you think or feel.

This is one of the most powerful ways to stop caring what other people think about you.

You don’t have to let other people’s opinions get under your skin or make you feel unworthy. You don’t have to let your imagination of what other people will think dictate what you think, believe, and do.

At the same time, this way of thinking can help you realize that other people are just as in control of their own thoughts and actions as you are. The more you value the freedom you have in controlling your own opinions and behavior, the more you will respect that same freedom in other people.

If you contemplate this idea frequently and incorporate it into your daily life, you’ll realize that your entire mentality shifts. Seriously– it’s a game-changer.

Don’t Assume You Know What People Think

Have you ever had anyone assume they know how you’re feeling and what you’re thinking in a way that was totally off-base? Of course, we can sometimes glean a general idea of what others are thinking without them saying anything– body language, facial expressions, and general vibes are also incredibly communicative.

two people whispering while a third looks back at them from bench worried what they think
It's possible to get all wrapped up in the opinions you assume other people have when you're actually completely off-base. This means you're simply subjecting yourself to unnecessary anxiety and pouring your energy in a completely futile direction.

That being said, it can be pretty annoying when other people make assumptions about where you’re coming from when you haven’t told them what you’re thinking. When you expect other people are judging you, you are guilty of the exact same thing.

In the same way that other people don’t always know what you’re thinking, you can’t know with certainty what other people are thinking.

If you’re walking around with the idea that everyone is judging you, making fun of you, or otherwise belittling you in their minds, there’s a good chance that you’re completely missing the mark.

When you zoom out on this illustration it’s pretty remarkable. Picture yourself walking around a grocery store, for example, with thought bubbles that are wholly concerned with what other people are thinking. All the other people in the store have their own thought bubbles, that are fairly benign and completely unrelated to you.

Seems kind of silly, doesn’t it?

That’s usually what’s happening when you assume you know what people think.

Remember How Much You Think About Yourself

We think about ourselves a lot. According to an article from Scientific American, people spend 60% of conversations talking about themselves, on average. When communicating on social media platforms, 80% of communication is just people talking about themselves.

woman on couch looking in mirror thinking about herself
We all spend a lot of time thinking about ourselves, which means that other people likely aren't thinking about us nearly as much as we expect.

If we spend this much time talking about ourselves to other people, one can only imagine how much time we spend thinking about ourselves.

“You probably wouldn’t worry about what people think of you if you could know how seldom they do.”

― Eleanor Roosevelt

Sometimes, we can get caught in cycles where we are super self-conscious of who we are, what we look like, and everything about us. We go to a party and are consumed with the idea that everyone is paying attention to us. Our hearts start pounding and our mind is racing, obsessing over the fact that everyone is talking about just how lame we are.

What’s most likely happening, though, is that almost no one is thinking about you. I don’t mean this to be mean– it’s not that you don’t matter. If you can realize how much time you spend focusing on yourself, though, it can give you a window into what everyone else is most likely thinking about: themselves.

Why waste your time worrying about what others think when they might not be thinking about you at all? If we’re all just walking around thinking about ourselves most of the time, why not use that time productively? And that brings me to my next section… understanding the opportunity cost of caring about what other people think.

Understand the Opportunity Cost

When you spend time thinking about something, you are (consciously or unconsciously) choosing to focus on that topic rather than absolutely everything else you could be thinking about or doing.

The truth is that our time is limited. We only have so many hours in the day and we all have only so many days in our lives.

“Don’t waste the rest of your life worrying about others — unless it is for some mutual benefit. The time you spend wondering what so-and-so is doing, saying, thinking or plotting is the time that’s lost for some other task.”

— Marcus Aurelius

Every time you think about what people would think if you wore that outfit, quit your job, or started a band, you are doing so at the expense of every other possibility in the universe.

At the same time, you’re pouring your energy into these topics in a way that most likely impedes your growth. What if you took that energy and put it elsewhere? What if you took that energy and put it toward something you actually had control over-- like who you are, what you accomplish, and what your life is like?

Practice Self-Care and Self-Acceptance

In order to not care what other people think, a few things are necessary.

man laying in hammock at dusk outside taking care of himself
Being honest with yourself about your mistakes and weak points is an important part of personal growth, but you also need to practice self-care and self-acceptance.

You need to believe in yourself. You need to trust yourself. You need to take care of yourself.

You need to accept yourself.

When you have these tools in your arsenal, you're much less likely to get completely bowled over when someone expresses negative opinions about you. You can't control other people, but you can control how you feel about yourself. The truth is, the more you do in life, the more criticism you will receive no matter how selfless or genius your actions.

“There is only one way to avoid criticism: do nothing, say nothing, and be nothing.”

― Aristotle

Accepting yourself isn't easy, but with dedicated self-work and attention, it's possible.

Don’t Necessarily View All Opinions Equally

We are all connected to hundreds or even thousands of people through our family, friends, school, work, and social media. When you find yourself fixated on the opinions of other people, it’s important to ask yourself who this person is and why their opinion matters to you.

“Who are these people that you want to be admired by? Aren’t they the same ones whom you used to call crazy? Well, then, do you want to be admired by madmen?”

– Epictetus

You'll also want to distinguish between actual feedback and the anxious ramblings of your own mind-- i.e., did someone actually give you their opinion, or are you just letting your imagination run wild?

It’s possible that someone's opinion does matter to you. Maybe you are receiving constructive feedback from your grandfather about a life decision you are making, and you have learned to trust and respect his opinion over the years. If this is the case, you might find that learning what other people think about you is incredibly valuable and useful to your life and growth as a person.

On the other hand, maybe you are feeling judged by someone that you basically don’t know at all. Should you let this person live rent-free in your mind? Why would you let their opinion impact your life at all?

It’s not that you should necessarily go through life completely unwilling to entertain what other people think about you. Sometimes, people have useful feedback that can legitimately change your life. No one is perfect, and sometimes we need some help from the outside.

But you also shouldn’t go through life trying to win validation from people you don’t actually know, care about, or respect. There are plenty of things to concern yourself with in life, but the snarky comment that girl you knew in middle school left on your Instagram photo probably isn’t one of them.

Distance Yourself From People That Only Judge

Have you ever heard the Jim Rohn quote that “you are the average of the five people you spend the most time with”?

good friends around campfire
Having a close group of friends can be a huge asset and a source of joy in life. If your friends seem to always want to bring you down, though, it might be time for a change in scenery.

Depending on your social circle right now, this thought might be absolutely terrifying. The reality is that we are a lot more influenced by the people that we know than we might want to admit.

If you find that you care too much about what other people think, it’s possible that it’s all in your head. On the other hand, it’s also possible that you’re around people that are constantly judging you, criticizing you, and pulling you down.

Are the people you’re around disrespectful to you and not supportive of you? Do you feel more beaten down than lifted up by your friends? If so, it might be time for a change of scene.

Get Off of Social Media

According to the Pew Research Center, about two-thirds of Americans say that social media has “a mostly negative effect on the way things are going in the country today.”

Social media has also been found to be a “significant contributor” to stress, anxiety, and low mood. On top of that, several studies have linked social media use with a greater risk for depression, and research has also found that people that use social media often are more likely to have sleep troubles.

couple hugging on beach looking at smart phones caring too much what others think
Social media has revolutionized how we relate to one another, and not necessarily for the better.

The list of negatives about social media goes on and on. Studies have found that social media sites make “more than half of users feel inadequate” according to one survey and that looking at other people’s selfies is correlated with lower self-esteem.

Another study found that the more time people spent on Facebook, the more their life satisfaction declined over time and the worse they would feel later on in the same day.

Think that’s all the bad news about social media? Not at all. Studies have found that social media can have a negative impact on relationships, can instigate feelings of frustration driven by envy, and make people feel more lonely.

“Don’t let the noise of others’ opinions drown out your own inner voice.”

– Steve Jobs

Don’t get me wrong– there are definitely some incredible things about social media. It’s a truly powerful tool that can be used to connect people across geographic barriers, teach you about things you never would have learned about otherwise, and provide valuable and meaningful entertainment. You can use your social media as a marketing tool for your business that allows you to reach way more people than you could without these platforms.

However, many of us aren’t very conscious about how we’re using social media. It’s easy to just grab your phone and start scrolling whenever you have a free minute or otherwise don’t know what to do with yourself.

It’s amazing how much time can be spent staring at our phones and taking in information that is not particularly useful or interesting to us.

When you look at the increasingly large number of studies that have been done about social media and mental health, it implies that we might want to step back individually and as a society and learn to be more conscious of our social media use.

After all, we only have so much time in our lives.

Do you want to look back on your life when you’re old and realize you spent a good chunk of it staring at other people’s selfies?

Let’s face it: social media can make us feel terrible about ourselves. It can leave us comparing ourselves to the carefully curated images of other people, that more often than not don’t even really reflect their lives.

It can also create pressure within us to produce an online personality that is accepted, affirmed, and validated by other people. It is all too possible to put almost all of your energy every day towards carefully orchestrating the persona we project online.

At the end of the day, this activity comes down to caring way too much about what others think. We look at social media and we judge others, we look at social media and we feel judged by others. This aspect of the relatively new social phenomenon isn’t healthy for anyone.

If you feel like you care way too much about what other people think, try staying off social media for a week. Heck, try staying off it for a day. There’s a good chance you’ll find a lot of benefits in logging off and focusing on yourself and doing something else with your time.

Curate Your Media Intake

In our hyperconnected world, it's easy to never spend any time with your own thoughts. If you're always plugged into the opinions of others without spending any time with your own, you're much more likely to fixate on what other people think.

Remember, you have control over how you spend your time and what you spend your time thinking about. If you feel like you care too much about what people think, try to pull back on how much content and media you consume. If the media you're consuming is garbage and you know it, find your self-control and stop.

A terrifying number of people spend most of their free time mindlessly consuming content without balancing this out with productive self-growth activities or working to achieve goals.

If you're all wrapped up in what other people are saying, it might be time to log off and recenter.

Lead a Growth-Oriented Life

If you think life is about impressing other people, you probably won't realize one of the most profound truths of life: mistakes are how you learn and challenges are opportunities for growth.

sprout growing out of bark representing growth oriented mindset
Cultivating a growth-oriented mindset means that you understand that mistakes, obstacles, and adversity are essential learning experiences in your path to becoming your best self.

Do you want to grow? Do you want to become the best possible version of yourself before you die?

If you answered yes to these questions, it means you have (or aspire to have) a growth-oriented mindset rather than a fixed mindset. A growth-oriented mindset means you aren't afraid of mistakes or obstacles-- in fact, you welcome them as ways to learn, grow, change, and become your best self.

“One day, in retrospect, the years of struggle will strike you as the most beautiful.”

― Sigmund Freud

I've had a lot of setbacks in my life that were actually golden opportunities.

Years ago, I almost gave up and sold my blog when it wasn't taking off. It was easy to feel like a failure, to feel like other people would judge me for my unsuccessful venture.

“Adversity causes some men to break; others to break records.”

– William Arthur Ward

Luckily, I didn't let my fear of what other people thought dictate my actions.

Instead of throwing in the towel, I doubled down. In less than ninety days, the blog made a million dollars.

Here's another example: In 2011 I lost everything when Google changed its algorithm basically overnight.

I could have spent my time feeling ashamed that my project had failed. I could have gotten all caught up in what my friends and family might think, or even about the opinions of random strangers.

But I didn't.

Instead, I put my nose to the grindstone. I rebuilt from the ground up. Just four short years later, I was able to retire a multi-millionaire.

I'm not trying to brag. The point is to show that your choice to have a growth-oriented mindset or a fixed mindset can have a very well impact on your life.

Scrutinize Your Own Opinions and Beliefs

The journey to being your best self is a fascinating one– you both have to practice self-acceptance while also constantly scrutinizing your own opinions and beliefs. You have to, at once, believe in yourself and doubt yourself.

A lot of this advice so far has been about the fact that you shouldn’t let other people’s opinions bring you down or dictate your life.

At the same time, though, none of us are perfect. We make mistakes, we hold opinions we haven’t thought through, and we act from beliefs we don’t understand in ways that contradict the values we want to hold.

One of the worst things that you can do in life is be unwilling to question your own opinions.

Sometimes, we can believe that our thoughts, beliefs, and opinions are so central to our identity that we assume we wouldn’t know who we were if we changed them. In reality, though, if we are unwilling to question the contents of our own minds, we can get stuck in our ways and close ourselves off from opportunities in life.

Sadly, some people get trapped believing that the personality they picked up somewhere around middle school is fixed, and they don’t let themselves grow because they are too afraid to doubt themselves.

Learning how to change your mind is a huge asset to living a fulfilling life.

It can also make you more forgiving of other people because you recognize that the perspectives they hold now might not be the same as those they hold in a few months, years, or decades. At the same time, it helps you learn to forgive yourself and recognize that every time you’ve thoughtfully changed your mind, you’ve grown a little.

Get Out There and Do Something

It is all too easy to get stuck in your own head. You can spend hours, days, weeks, or an entire life laying around worrying about what other people think.

Concerning yourself with the opinions of others can be paralyzing, as it can make you question everything you do. The less you do and the more you stay in your head, though, the more intense this cycle can get.

If you feel like you care way too much about what others think, get out there and do something. Anything.

man running aross frozen lake doing something to escape anxiety about what others think
If you're too worried about what other people think, it might be time to stop thinking and go do something.

Exercise can be an awesome way to get the right brain chemicals flowing and burn off all of those self-conscious anxieties. Go for a run or a walk, hop on your bike, do some yoga, put on some music and dance, play tennis, shoot some hoops– it doesn’t matter. You might just find that moving around has a huge impact on your tendency to focus too much on what others think.

You can also take up some new hobbies or activities that you find enjoyable. Do something that you wouldn’t normally do for fear of what people would think. Whether it's starting a business, going to a concert alone, or writing a book, there is tremendous value in self-directed action.

Go have fun– you only live once! If other people want to give you a hard time for what you’re doing, that’s their problem, not yours.

Accept That You Can’t Please Everyone

There are people out there that absolutely despise Mother Theresa and the Dalai Lama. Long story short, no matter who you are, you absolutely cannot make everyone happy, no matter how hard you try. As it was once said, “the key to failure is trying to please everyone.”

This can be a hard pill to swallow if you’ve always been a people pleaser. If you run around your whole life, though, simply trying to make everyone happy and ensuring that no one is ever mad at you, you’re going to drive yourself mad. At the same time, you won’t get to do the things in life that really matter to you.

“You can’t be an important and life-changing presence for some people without also being a joke and an embarrassment to others.”

– Mark Manson

If you feel the urge to change who you are to make someone else happy or say something you don’t believe to please another person, stop and take a step back. Ask yourself why you would let this singular other person take control over how you are feeling. Consider the fact that you are totally free to separate how the person thinks about you from your own sense of self-worth.

No matter who you are, no matter how much good you do in the world, there are people that will criticize you. In fact, the more of a stand you take in life, the more opposition you will face. This is, for better or for worse, just a part of the deal of being a person.

The reality is, though, that we are all individually responsible for our own happiness. You can’t make someone else happy.

From this perspective, all we can do is try to be the best people we can be and hope that others do the same. If you encounter some perpetually disappointed people along the way, (which you surely will,) it’s essential to find a way to accept that you simply can’t please everyone.

“Do not fear to be eccentric in opinion, for every opinion now accepted was once eccentric.”

– Bertrand Russell

As a final point, don't let the fear of being "weird" keep you from being your true self. Being normal is boring anyway.

Get Out in Nature

We are human, and it’s easy to get caught up in the human world. If you are actively feeling overwhelmed by what other people think of you, get out of your house and get out in nature.

man in forest learning to stop caring what others think
Spending time in nature has a ton of mental health benefits. On top of that, it can help you get a better perspective on your life that is priceless in your journey to stop caring what other people think.

“If words control you, that means everyone else can control you. Breathe and allow things to pass.”

– Warren Buffett

Whether you head to your local nature path or you take a drive to a nearby mountain, there’s nothing better than spending some time with mother nature to help you gain some perspective.

You might just find that the things you've been fixating on don't really matter that much in the big picture, and help you remember or get in touch with your larger purposes.

Imagine Yourself at the End of Life

We don’t like to think about death in our culture, but that doesn’t change the fact that every single one of us will die someday.

If you find that you’re so concerned with what others think that it’s holding you back from living your life, you might want to try out a practice known as memento mori. Latin for “remember that you [have to] die,” the ancient Stoic philosophers were particularly notable for their use of this discipline.

pile of skulls memento mori to stop caring what others think
Purposefully meditating on your own death can give you a new lease on life and put the opinions of other people in perspective.

When you contemplate the fact that you will die, it can change your entire perspective on life. All of a sudden, the fact that people might make fun of you if you start that YouTube channel or quit your job to pursue your dream business stops being so important.

One particularly useful practice is to imagine yourself on your deathbed at the end of your life. As you're laying there and reflecting on the life you lived, what do you want to know you have done? What would you regret not having done?

This can be a great way to re-orient yourself when you’ve let yourself get pulled away by other people’s ideas, opinions, thoughts, and desires. The more you practice this discipline, the more you won’t let the passing judgments of others affect your ability to live your best life.

Start a Journal

Are you totally consumed with what other people think, even anonymous posters online? To cut through the noise, start a journal.

woman with journal and coffee learning to get over what others think
Journalling can help reduce stress, help you get to know yourself, and give you perspective on your life.

This is a great way to get to know your own thoughts and make sense of your feelings, experiences, beliefs, and life.

Are you finding yourself fixating on what other people think? No problem. Start writing in your journal and reconnect with yourself. You'll likely find whatever is being said doesn't matter much at all in the grand scheme of who you are and what you want to accomplish.

Don't Worry About the Joneses

I've written about how consumerism is the ultimate emotional scam in the past. If your primary concern is the thoughts of other people, you're on a fast track to getting caught up in social status in material wealth instead of the things that really matter in life.

Moving beyond a fixation on keeping up with the Joneses is essential if you want to really stop caring what other people think.

In fact, even if you have the wealth to show off your status with luxury experiences and flashy stuff, there are a lot of reasons why keeping your wealth a secret is the better road.

Recognize the Seasons of Life

If you search on Reddit for “how to not care what other people think about you,” a surprising answer pops up over and over again.

“Get older,” they say.

There is some truth to this. Life consists of many seasons, and we tend to care more about what people think about us when we are younger. That being said, there are plenty of people that are closer to death than birth who are completely consumed with pleasing other people and receiving validation from everyone but themselves.

“We cling to our own point of view, as though everything depended on it. Yet our opinions have no permanence; like autumn and winter, they gradually pass away.”

– Zhuangzi

Getting some perspective on the fact that there are different phases to our lives can help if you feel you simply can’t let go of other people’s opinions.

Work on getting in touch with yourself, practice being self-aware of your own thoughts and feelings, and try to identify what your goals and purposes are. If you can do these things and let time pass, you’ll wake up one day and realize that you don’t spend nearly as much time focusing on other people’s opinions.

Take Yourself and Your Own Life Seriously

Don't let people convince you that what you do in your own life doesn't matter. Don't let the people you're around convince you that you should "stay in your lane" or that your goals are pipedreams.

Take yourself seriously. When you do this, other people take you seriously, too.

“Lend yourself to others, but give yourself to yourself.”

– Michel de Montaigne

If you don't take your life seriously, you probably won't live a life that you're proud of. You might get in the habit of sabotaging yourself and even resenting people that do take themselves seriously.

That's no way to live.

"Make the most of yourself, for that is all there is of you."

– Ralph Waldo Emerson

Remember, you are the only person in the entire universe that can make your life what you want it to be. So take it seriously and don't pay any mind to people that give you slack for doing so.

Stop Comparing Yourself to Others

Social media makes it easy to constantly compare yourself to the carefully curated personas of other people.

“Do not overrate what you have received, nor envy others. He who envies others does not obtain peace of mind.”

– Buddha

When we compare ourselves to others too much it can destroy our self-esteem and make us focus too much on what others think. Instead of envying others for what they have accomplished, turn envy into appreciation and use it as motivation and inspiration to be who you want to be.

“Appreciation is a wonderful thing: It makes what is excellent in others belong to us as well.”

– Voltaire

Rather than comparing yourself to other people, compare the person you are today with the person you were yesterday. Personal growth is a slow, steady hike-- it's a marathon, not a sprint. As long as you're making progress one day at a time, you're on the right path.

Focus on Curiosity and Practice Gratitude

Instead of being defensive when you receive negative feedback, be curious. This won't just help you build more meaningful relationships with the people you're close to, but it can also mean that you could gain some valuable information that could benefit your growth as a person.

There's a lot of talk these days about the benefits of practicing gratitude, and for a good reason-- it works.

When you arise in the morning think of what a privilege it is to be alive, to think, to enjoy, to love.

– Marcus Aurelius

monk praying in beautiful landscape
Focusing on gratitude can help your concerns about what other people are thinking melt away.

Focusing on what you're grateful for rather than what you don't have can help you stay centered in yourself rather than focusing on the opinions of others.

Learn to Forgive

We all make mistakes. Sometimes, we make big, life-changing mistakes. Maybe your little mishap has become the talk of the town.

It can be hard to forgive yourself when this happens, and it isn't necessarily an overnight process. No matter how big or small the mistake that is weighing on your mind, this is the perfect time to turn inward and find the piece of gold hidden in the experience.

"Every difficulty in life presents us with an opportunity to turn inward and to invoke our own inner resources. The trails we endure can and should introduce us to our strengths."

– Epictetus

Instead of putting all of the value on what other people are saying, reconnect with yourself, learn what you can, and learn to forgive.

Final Thoughts

Letting go of what other people think about you isn't easy, and it can take time to break the habit of fixating on the opinions of others. With attention, effort, and time, though, you can refocus on yourself and stop caring about what other people think about you. The sooner you can shed your fixation on other peoples' opinions, the sooner you can start pursuing your deepest goals and purposes.

So, who am I to be telling you how to stop caring about what people think? You can learn more about me and my projects here.

Have you heard the story of Jim Thorpe?

Not only was he the first Native American to win gold at the Olympics, but he's easily one of the most athletic human beings in history. He didn't just dominate at the 1912 Olympics with minimal training, but he obliterated nearly every sport he tried. During his unbelievable career, he played professional football... and professional baseball... and professional basketball.

Jim Thorpe's story is the story of a man overcoming utterly impossible obstacles in such a way that it seemed almost easy. He had to overcome personal tragedy, unbelievable racism, sabotaging teammates, and the death of multiple family members - including his mother - when he was a child. But he still overcame.

In his legendary 1912 Olympic events, someone stole his shoes - so he simply found two mismatched shoes in the garbage. One was too big and one was too small. Oh, and he still won gold. And then set several records, which you'll learn about later in this essay. The man was essentially unstoppable.

Jim Thorpe is a personal hero of mine and, I believe, the greatest athlete to have ever lived.

Who Was Jim Thorpe?

Jim Thorpe was a legendary Native American athlete who dominated the 1912 Olympics, winning gold. He also played professional football, professional baseball, and professional basketball.

Jim Thorpe: One of the Greatest Athletes of All Time

When you think of the greatest athletes of all time a few names likely come to mind. Michael Jordan, Muhammad Ali, Wayne Gretzky,  and Babe Ruth are some of the world's most famous and skilled athletes and consistently land in the top five when listing out the greatest athletes ever.

Another name that frequents these lists is Jim Thorpe. While his name might not be recognizable to the average American anymore, he was once a household name across the country. I think it's time Thorpe made a comeback. If you want to remember people for their athletic accomplishments, then everyone should know his name and story.

Sketch of Jim Thorpe by Robert Edgren
Jim Thorpe as drawn by the cartoon Robert Edgren in 1922.

Unlike the other legends listed above, Thorpe didn't just excel in one particular sport. When you're talking about who the greatest multi-sport, all-around athlete is, most people would tell you that the answer is undoubtedly Jim Thorpe.

Sure, there are some other incredibly talented multi-sport athletes out there and men with remarkably versatile skills. Deoin Sanders, Carl Lewis, Wilt Chamberlain, and Jim Brown come to mind.

But Thorpe was in a league of his own.

He won the gold in the 1912 Olympic Games in both the pentathlon and the decathlon-- both of which are multi-event games that show his ridiculous versatility.

He didn't stop there, though. He played major league baseball for seven years, professional football for 13 years, and professional basketball for at least two years.

It's really difficult to say which sport Thorpe is best known for.

He was an All-Pro back as a professional football player. He kept the Olympic record for his points total for two decades after winning eight of the fifteen individual events of the decathlon and pentathlon.

As a basketball player, Thorpe displayed his abilities barnstorming all over the country. While his baseball numbers weren't statistically outrageous, the fact that he was able to compete at the highest level of the game certainly says something.

Basically, Thorpe could play any sport he tried with ease. He is a true sports legend and an American icon.

The Story of the Stolen Shoes

If you've ever come across a social media post about Jim Thorpe, there's a good chance it was accompanied by this picture of the legend during the 1912 Olympic Games:

Jim Thorpe 1912 Olympics mismatched shoes
Jim Thorpe at the 1912 Summer Olympics in Stockholm, Sweden

Why, you ask?

Look at his feet-- he's wearing two different shoes.

When this photo was taken, Thorpe had already crushed the field in the pentathlon, placing first in four of the five events. During the 1,500-meter run, he left his opponents in the dust, beating the man in second place by nearly five seconds.

The next week, it was time for him to compete in the decathlon which occurred over the course of three days.

In the pouring rain, Thorpe ran an 11.2-second 100-meter dash. No one was able to match that time at the Olympics until 1948.

Sometime after this event, just about the worst thing that can happen to a track and field athlete during the Olympics happened-- his shoes went missing.

Some accounts say that his shoes were missing on the second day of the decathlon. Others say that they disappeared a few minutes before the 1500-meter race portion of the decathlon was about to begin.

There are a lot of different theories about what exactly happened here-- who took Thorpe's shoes? Why were they missing? Had they been stolen?

Bob Wheeler, the author of the biography Jim Thorpe: The World's Greatest Athlete and the founder of the Jim Thorpe Foundation, believes that it was right before the 1500-meter race that his shoes went missing. He is a fairly credible source, considering that he conducted more than 200 interviews with teammates, friends, and family members of Jim Thorpe while writing his 1979 biography.

According to Wheeler, the story goes like this:

A few minutes between the decathlon's 1500-meter race, Thorpe's shoes were nowhere to be found. One of his teammates gave him one shoe to borrow. The second shoe? He found it in the garbage.

Not only was he wearing two mismatched shoes, but one of them was way too big for his foot and one of them was way too small.

The solution?

Thorpe squeezed his foot into the small shoe and wore extra socks on one of his feet to make the shoe fit better.

Most of us would whine and complain if we had to walk around in a too-big shoe and a too-small shoe for ten minutes at the grocery store.

Thorpe didn't just go out and compete against the world's greatest decathletes in the 1500 meters with mismatched shoes that didn't fit. He went out and won.

This is a timeless story that has a powerful message more than one hundred years later. It says never give up. Never quit. Never let obstacles stop you from attaining greatness.

Jim Thorpe and the King of Sweden

Thorpe was the winner of the final event of the Olympic Games--  the 1500 meter (it's worth noting that Thorpe ran the 1500 meter twice during the Games, once for the pentathlon and once for the decathlon. He smoked the competition both times.)

JIm Thorpe running at the 1912 Olympics
Jim Thorpe running at the 1912 Olympics.

Each gold medalist was crowned with a laurel wreath as they came up to receive their medals by King Gustav of Sweden.

According to the New York Times, the crowd gave a "great burst of cheers led by the King" when Thorpe received his pentathlon gold.

For his decathlon performance, Thorpe wasn't just given his medal. He also received a bust of the king and a Viking ship-shaped jewel-encrusted chalice.

King Gustav of Sweden grabbed Thorpe's hand firmly and said, his voice shaking with emotion:

"Sir, you are the greatest athlete in the world."

What did Thorpe say in response?

"Thanks, King."

The Biography of Jim Thorpe

The Early Years

There is a lot we don’t know for certain about the beginning of Jim Thorpe’s life.

While it’s known that he was born in Indian Territory that would later be known as the state of Oklahoma, and he was baptized as “Jacobus Franciscus Thorpe” in the Catholic Church, no birth certificate was ever found for the American hero.

Map of the Indian and Oklahoma Territories in 1891
When Jim Thorpe won gold at the Olympics, he wasn't even considered a US citizen. This is a map of the Indian and Oklahoma Territories from 1892.

Most biographers believe that Thorpe was born near the town of Prague on May 22, 1887, which is the date that is listed on his baptismal certificate.  However, Thorpe himself once said his birthday was May 28, 1888, in a note to The Shawnee News-Star in 1943. He also said that he was born:

“...Near and south of Bellemont– Pottawatomie County– along the banks of the North Fork River… hope this will clear up inquiries to my birthplace.”

Jim Thorpe grew up fishing, hunting, and learning from elders in what is now central Oklahoma, but what was, at the time, Sac and Fox land. He also played sports growing up, with baseball being an early favorite.

Jim Thorpe’s Parents

Both the parents of Jim Thorpe were of mixed-race ancestry. Hiram Thorpe, his father, was born to a Sac and Fox Indian mother and an Irish father. Charlotte Vieux, his mother, was born to a Potawatomi mother (descended from Chief Louis Vieux) and a French father.

According to popular legend, Jim Thorpe is a descendant of the infamous warrior Chief Black Hawk.

Cheif Black Hawk ancestor of Jim Thorpe
Jim Thorpe is believed to be descended from the famous Sauk leader Chief Black Hawk.

The autobiography of Black Hawk, entitled Autobiography of Ma-Ka-Tai-Me-She-Kia-Kiak, or Black Hawk, Embracing the Traditions of his Nation, was the first Native American autobiography that was published in the United States.

“I am no more proud of my career as an athlete than I am of the fact that I am a direct descendant of that noble warrior [Chief Black Hawk].” – Jim Thorpe

Life as a Sac and Fox Indian and His School Years

The native name of Jim Thorpe was Wa-Tho-Huk, which can be translated to mean “path lit by great flash of lightning,” or, more succinctly, “Bright Path.”

Raised as a Sac and Fox Indian, Thorpe’s native name comes from the fact that the path that led to the cabin where he was born was brightened by lightening around the time of his birth. This was custom for the Sac and Fox, who named their people something that happened near birth time.

Sac and Fox Bark House, JIm Thorpe was raised as a Sac and Fox Native American
A Sac and Fox bark house from somewhere between 1885 and 1900.

Thorpe had a twin brother named Charlie, and the two of them attended the Sac and Fox Indian Agency school in Stroud. Sadly, Charlie died of pneumonia when the boys were nine.

It is known that Thorpe ran away from the school he attended a number of times. Eventually, he was sent to an Indian boarding school (the Haskell Institute in Lawrence, Kansas) by his father. The reason he was sent away? So he would stop running away.

His life was struck by tragedy again when his mother died of complications during childbirth just two years after Thorpe was sent to the Haskell Institute. Understandably, he was left deeply depressed by the death of his mother. After getting into fight after fight with his father, Thorpe decided to leave home in order to work on a horse ranch.

When Thorpe was about sixteen in 1904, he went back to see his father again. He decided to go to the flagship Indian boarding school in the U.S. during the time– Carlisle Indian Industrial School in Carlisle, Pennsylvania. This school was founded in 1879 with the purpose of training Indians for hands-on trades and assimilating them into mainstream culture.

Jim Thorpe at Carlisle Indian Industrial School in 1912
Jim Thorpe in 1912 as a part of the Carlisle Indian School Track Team

It was during this time that Thorpe’s incredible athletic ability was first recognized.

He was coached by one of the most influential coaches of early American football– Glenn Scobey “Pop” Warner.

Soon thereafter, Thorpe’s father died from gangrene poisoning after a hunting accident. This left the young man an orphan, and he dropped out of school once again. Before later returning to the Carlisle School, Thorpe spent another few years working on farms.

Amateur Athletic Career

The College Years

In 1907, In his third year at the school, Thorpe wandered by track and field practice and easily cleared a 5’9” high jump bar wearing his heavy overalls. In his plain street clothes, he beat all of the school’s high jumpers.

Jim Thorpe around 1910
Jim Thorpe circa 1910

He didn’t just impress people with his athletic abilities in track and field, though. During this time, he also competed in:

  • Lacrosse
  • Baseball
  • Football
  • Ballroom dancing

That's right– ballroom dancing. In fact, he won the 1912 intercollegiate ballroom dancing championship.

Though Pop Warner was reluctant to let his best track and field athlete play the intensely physical sport of football, Thorpe convinced him to let him attend practice and try some rushing plays against the school’s defensive team.

Warner permitted this, figuring that Thorpe would quickly give up the idea after being tackled easily.

Of course, that never happened. Instead, Thorpe “ran around past and through them not once, but twice.” After his impressive display, Thorpe flipped Warner the football while saying that “Nobody is going to tackle Jim.”

Jim Thorpe tackling a dummy with Coach Glenn Pop Warner
Jim Thorpe tackling a dummy made of pulley and weights on wire with Coach Glenn "Pop" Warner, 1912

It was in 1911 that the American people started to notice Thorpe’s tremendous athletic ability. In a game against Harvard, a top-ranked team at the time, Thorpe scored all four of the field goals in the 18-15 upset. Amazingly, his team completed this season with a record of 11-1.

Thanks to Thorpe, Carlisle won the national collegiate championship in 1912. During the season, he scored a whopping 198 points and scored 25 touchdowns. By some accounts, he was responsible for 224 points and 27 touchdowns during this time.

Jim Thorpe even played against future President Dwight D. Eisenhower during a 1912 game against the West Point Army team. While the 92-yard touchdown Thorpe made during the game was nullified due to a penalty against a teammate, Thorpe rushed for a 97-yard touchdown in the next play. During the game, Eisenhower injured his knee when attempting to tackle Thorpe.

Eisenhower spoke of Thorpe’s performance during this game in a 1961 speech, stating that:

“Here and there, there are some people who are supremely endowed. My memory goes back to Jim Thorpe. He never practiced in his life, and he could do anything better than any other football player I ever saw.” – Dwight D. Eisenhower

In 1908, Thorpe received third-team All-American football honors. After heading to North Carolina for a time to pitch for the Rocky Mount Railroaders, Thorpe was lured back to Carlisle by Pop Warner. In 1911 and 1912, he was named a first-team All-American.

Even though Thorpe would gain his greatest fame from track and field, he didn’t compete in the sport in 1910 or 1911. Despite his incredible skills in a number of athletic endeavors, football was Thorpe’s favorite sport to play.

Olympic Career

Jim Thorpe started training for the Olympics in the spring of 1912. Initially, he focused on hurdles, shot-puts, and jumps. However, being so incredibly versatile and skilled as an athlete, he added in the javelin, pole vaulting, discus, 56 lb weight, and hammer.

jim thorpe 1912 olympics decathlon
Jim Thorpe competing in one of ten decathlon events at the 1912 Olympics.

He earned himself a spot on the Olympic team thanks to his all-around ability during the Olympic trials held at Celtic Park in New York.

There were two new multi-event sports included in the 1912 Summer Olympics– the pentathlon and the decathlon.

The pentathlon was based on the event that had been a part of the Ancient Olympic Games, and consisted of:

  • Javelin throw
  • Long jump
  • Discus throw
  • 200-meter dash
  • 1500-meter run

The decathlon was also inspired by the pentathlon, but instead of consisting of five events, this one had ten. All the way back in 1884, there had been a ten-event competition known as the “all-around” or “all-round” championship which was quite similar to the modern decathlon.

The first appearance of the modern decathlon as a part of the Olympic Athletics program was at the Stockholm 1912 games– the games where Jim Thorpe displayed his superior athletic abilities.

The decathlon is split into two different days of events:

  • Day 1
    • 100 meters
    • Long jump
    • Shot put
    • High jump
    • 400 meters
  • Day 2
    • 110 meters hurdles
    • Discus throw
    • Pole vault
    • Javelin throw
    • 1500 meters

Since Thorpe was so versatile as an athlete (for example, he had gone to a number of track meets with Carlisle and served as a one-man team,), both of these new Olympic sports seemed the perfect fit for Thorpe.

After entering the trials for both events, Thorpe earned a place on the pentathlon team and was chosen to represent the U.S. in the decathlon.

You would think that competing in these two multi-sport events would be enough for most athletes. Thorpe, though, also competed in the high jump and the long jump at the 1912 games.

The Pentathlon, the High Jump, and the Long Jump

The first competition Thorpe competed in during the games was the pentathlon on July 7. Out of the five events, he won four. The fifth event– javelin– he had never competed in before that year and still placed third.

Thorpe won the gold medal and went on to qualify for the high jump final the same day. A few days later, he participated in the long jump and placed seventh.

The Decathlon

The last event Thorpe participated in during those summer games was the decathlon. This was his first and only decathlon in his entire life.

Jim Thorpe Discus Decathlon 1912 Olympics
Jim Thorpe throwing discus during the decathlon at the 1912 summer Olympics in Stockholm, Sweden, 1912

He went into the competition with some serious competition lined up. Everyone was expecting a strong performance by Hugo Wieslander, a Swedish athlete that had set the inaugural world record for the pentathlon the previous year.

He was no match for Thorpe in these games, though. Jim Thorpe defeated Wieslander in the decathlon by 688 points. Out of the ten events, Thorpe placed in the top four in every single one.

For nearly two decades, his Olympic record of 8,413 points stood strong.

1912 Jim Thorpe pole vaulting in the decathlon Olympics Sweden
Jim Thorpe pole vaulting in one of five events in the decathlon competition at the 1912 Summer Olympics.

Out of the fifteen individual events that made up the decathlon and the pentathlon, Thorpe won eight.

All of this is remarkable on its own. To understand just how incredible his feats were during those games, you have to realize that someone had stolen his shoes just before he was due to compete.

While many athletes might be completely shot down by this occurrence, which their shoes being the most essential gear they have, Thorpe quickly found two replacement shoes. Not only were the shoes mismatched, but he fished one of them out of a trash can.

A true king, he put these ill-matched shoes on and won the gold medal.

Baseball Games

The 1912 Summer Olympics also saw the sport of baseball for the first time in the history of the games. Included as a demonstration sport (meaning it was played to promote it rather than as a regular medal competition,) a game was played between the United States and Sweden.

The U.S. team was made up of various members of the track and field athletics delegation. One of the participating athletes was Jim Thorpe himself, who played in one of the two exhibition baseball games.

The Closing Ceremony

At the closing ceremonies of the games, Thorpe won two gold medals as well as two challenge prizes. These were donated by Czar Nicholas II of Russia for the pentathlon and King Gustav V of Sweden for the decathlon.

King Gustav of Sweden giving Jim Thorpe the Gold at 1912 Olympic closing ceremony
King Gustav V of Sweden presenting Jim Thorpe with a gold medal at the 1912 Summer Olympics closing ceremony.

It is said that King Gustav commented to Thorpe when he was giving him his prize:

"You, sir, are the greatest athlete in the world"

Thorpe is believed to have simply said in return:

“Thanks, King.”

When Thorpe came home, he was given a hero’s welcome. At a ticker-tape parade on Broadway shortly thereafter, he was the star attraction.

Record-Breaking All-Around Champion Performance

After his domination at the Olympics, Thorpe went back to Celtic Park where he had qualified for the games several months earlier. There, he competed in the Amateur Athletic Union’s All-Around Championship.

Out of the ten events held, Thorpe won seven.

What happened in the other three? He came in second, of course.

During his performance, Thorpe broke the previously standing record of 7,385 points that had been set several years earlier in 1909 by achieving a total point score of 7,476.

The broken record had been held by Martin Sheridan, who was the Irish American Athletic Club’s champion athlete. Sheridan himself was no lightweight when it came to athletics, having won five Olympic gold medals.

Martin Sheridan Jim Thorpe
Martin Sheridan at the 1908 Summer Olympics in London. At the 1912 Olympics, Jim Thorpe broke the points record held by Sheridan.

When Thorpe broke his record, he was there to watch it happen.

A good sport, he went up to Jim Thorpe after the event. As he reached out to shake his hand, he said:

"Jim, my boy, you're a great man. I never expect to look upon a finer athlete."

Sheridan went on to sing Thorpe’s praises to a New York World reporter, saying:

"Thorpe is the greatest athlete that ever lived. He has me beaten fifty ways. Even when I was in my prime, I could not do what he did today."

The Olympic Controversy

In 1912, athletes participating in the Olympics were held to strict rules about amateurism. At the time, athletes weren’t considered amateurs if they:

  • Had previously competed against professionals
  • Were sports teachers
  • Had received monetary prizes for competitions

In order to compete in the Olympics, athletes had to be amateurs and not professionals by this definition.

Months after Thorpe’s domination of the games, in January 1913, it was reported that he had previously played professional baseball by the Worcester Telegram. The story was further circulated by newspapers around the country.

In 1909 and 1910, Thorpe received meager pay as a professional baseball player in the Eastern Carolina League. It is reported that he received somewhere between $2 and $35 per week, which, in today’s money, amounts to a range of $58 and $1,018.

The kicker was that college athletes regularly played professionally during the summers to help them earn some money. To sidestep rules against amateurism, most of these players used aliases. Thorpe, however, did not.

The American public didn’t care that Thorpe had briefly played professional baseball. He was an American hero. However, the case was taken very seriously by the Amateur Athletic Union. One of the founders and the secretary of the AAU, James E. Sullivan, was particularly concerned with Thorpe’s previous stint playing professional baseball.

James E Sullivan man who took away Jim Thorpe's medals
James E. Sullivan played a prominent role in the decision to strip Jim Thorpe of his gold medals.

Thorpe wrote a letter to Sullivan to help explain that, while he had played pro baseball, he didn’t know he was doing anything wrong. In fact, he was just following the example of other college athletes.

“I hope I will be partly excused by the fact that I was simply an Indian schoolboy and did not know all about such things. In fact, I did not know that I was doing wrong, because I was doing what I knew several other college men had done, except that they did not use their own names …”

This honest admission, unfortunately, didn’t help his case. Thorpe’s amateur status was retroactively withdrawn, and the International Olympic Committee stripped him of the titles, medals, and awards he had won in the Olympics.

To further complicate the controversy, both the AAU and IOC had broken their own rules in disqualifying Thorpe. Protests had to be made “within 30 days from the closing ceremonies of the games” according to the 1912 Olympics rule book, but the first reports of the issues didn’t pop up until six months after the conclusion of the games.

Beyond that, there’s even some evidence that Thorpe’s time playing pro baseball was known to the AAU before he competed in the Olympics. Only when confronted with this fact did they decide it was a meaningful issue.

It wasn’t until three decades after his death that his status as an amateur was restored in 1982 and his family was presented with two medals in a ceremony.

However, the battle to correct the record wasn’t over.

Even though the IOC had restored his status as an amateur and returned the medals to his family, they didn’t declassify the other medalists from the 1912 games. This means that he was still essentially considered a co-winner, rather than rightfully restored as the sole winner.

Believe it or not, it wasn’t until July 2022, 110 years after the Olympic Games in Sweden, that the IOC announced that Thorpe would be reinstated as the sole Olympic champion in both the pentathlon and the decathlon.

Professional Athletic Career

Being stripped of his medals was devastating to Jim Thorpe. The only positive outcome of the whole ridiculous endeavor was that he started receiving offers from professional sports clubs as soon as it was reported that he had been declared a professional.

Jim Thorpe and Baseball

Thorpe was a free agent at the major league level after the Olympics because his contract had disbanded in 1910 with the minor league team that he had last played for. This was highly unusual for the time because this was during the era of the reserve clause in North American professional sports. This meant that pro athletes rarely had the opportunity to change teams unless they were given an unconditional release.

Jim Thorpe Portland Beavers
Jim Thorpe playing minor league baseball with the Portland Beavers, 1922.

This meant that Jim Thorpe had his pick of the litter when it came to which team to play for.

Turning down an offer with the St. Louis Browns, he decided to join the New York Giants. The Giants had been the National League champions the previous year.

Jim Thorpe New York Giants
Jim Thorpe as a member of the New York Giants, circa 1913-1915.

With the help of Thorpe’s superior athletic abilities, the Giants once again became the National League champions in 1913.

Shortly after the Giants lost the World Series, they embarked on a world tour with the Chicago White Sox. Unquestionably, the celebrity on the tour was Jim Thorpe.

On this incredible journey around the country and the world, Thorpe was able to meet major world figures including Pope Pius X and Abbas II Hilmi Bey. He even played to a huge crowd in London that included King George V.

Thorpe continued to play sporadically for the Giants. He had a short stint with the Milwaukee Brewers (a minor league team) before returning to the Giants and then being sold to the Cincinnati Reds.

Jim Thorpe Cincinnati Reds 1917
Jim Thorpe during his 1917 stint with the Cincinnati Reds.

His team-hopping didn’t end there– he went back to the Giants before being traded to the Boston Braves in 1919.

Until 1922, Thorpe continued to play minor league baseball.

Jim Thorpe's NFL History and Position

While it sounds like Thorpe was pretty busy playing baseball after the Olympics, he hadn’t abandoned his love of football. He played with the Pine Village Pros in 1913 and then with the Canton Bulldogs in 1915.

Jim Thorpe on the Canton Bulldogs
Jim Thorpe, Canton Bulldogs, between 1915 and 1920

The Bulldogs certainly recognized the worth of this incredible athlete. Reportedly, Thorpe was paid $250 per game, which amounts to nearly $6,700 in today’s dollars. At the time, this was a truly incredible wage.

The team got their money's worth, too. Before Thorpe joined the team, about 1,200 would attend their games. For Thorpe’s debut game, 8,000 fans showed up– more than six times more than the average attendance.

Thorpe played for the Bulldogs for a number of years. In one particularly legendary championship game in 1919, Thorpe put the game out of reach to the competition by kicking a (wind assisted) 95-yard punt from the 5-yard line of his own team.

Jim Thorpe Canton Bulldogs football
Jim Thorpe with former Carlisle football stars (Pete Calac and Joe Guyon) as they met on the gridiron for a professional game. The Canton Bulldogs were set to complete their undefeated season and the professional championship. 1919.

The Bulldogs were one of fourteen teams to form the American Professional Football Association in 1920– the organization that would become the NFL in just two years.

Who did they select as the inaugural president of the APFA? Why, Jim Thorpe, of course.

True to his nature, though, Thorpe just spent most of the year playing football for Canton. His tenure as the president of APFA only lasted until 1921.

Between 1921 and 1923, Thorpe helped to organize and played for an all-Native American team, the Oorang Indians.

Even though the team didn’t do that well, Thorpe’s incredible skills during the seasons were recognized. He was selected for the first All-NFL team in 1923, which later was recognized formally to be the league’s official All-NFL team.

After having played football for six different teams between 1920 and 1928 and playing in 52 games, Jim Thorpe retired from professional football at the age of 41.

 Jim Thorpe’s Basketball Career

Believe it or not, Jim Thorpe also had a basketball career that was unknown even to his biographers until 2005. How did they find out about his stint as a pro basketball player? From a ticket was found in an old book.

Jim Thorpe World Famous Indians basketball
Even his biographers didn't know that Jim Thorpe played pro basketball until 2005. Jim Thorpe on the World Famous Indians, 1927.

Thorpe played on a traveling basketball team as the primary feature of the “World Famous Indians” of LaRue. For at least two years, he barnstormed with the team in a number of states.

Jim Thorpe and Hockey

At this point, you must be thinking that we’ve reached the end of Thorpe’s athletic versatility. After all, he dominated in track and field while also playing professional baseball and football all while he was still a young man.

Believe it or not, though, Thorpe also considered going into professional hockey for the Tecumseh Hockey Club in Canada for a brief time in 1913. Imagine being so athletically talented that you could choose to play just about any sport at the pro level!

Jim Thorpe's Wife, Children, Grandchildren, and Family

Over the course of his life, Thorpe married three times and was the father of eight children.

His first marriage was to Iva M. Miller in 1913, who he met at Carlisle Indian Industrial School. Between 1917 and 1923, the couple lived in a home in Yale, Oklahoma that is now known as the Jim Thorpe House.

Jim Thorpe House Oklahoma
Located in Yale, Oklahoma, the Jim Thorpe House is listed in the National Register of Historic Places.

Together, they had four children:

  • James F.
  • Gale
  • Charlotte
  • Frances

In 1925, Iva filed for divorce on the grounds of desertion.

A year later, Thorpe married for the second time to Freeda Verona Kirkpatrick, who was working for the manager of the baseball team Thorpe was playing on. Together, they had four children:

  • Phillip
  • William
  • Richard
  • John

After fifteen years of marriage, in 1941, Freeda filed for divorce.

Four years later, Thorpe would marry the woman that he spent the rest of his life with. On June 2, 1945, he married Patricia Gladys Askew.

It is unclear how many descendants there are living of Jim Thorpe's. One grandson, Michael D. Koehler of Chicago, was a football star himself in his youth. He went on to be an educator and coach before passing away in 2015. Several of his grandsons were present to receive the AAU Gussie Crawford Lifetime Achievement Award for their grandfather, and a number of grandchildren have been outspoken about their opinions regarding the campaign to reinstate Jim Thorpe’s place as the sole winner of the decathlon and the pentathlon during the 1912 Olympic games.

Jim Thorpe’s Acting Career

Once his athletic career had come to a close, Thorpe struggled working jobs that weren’t related to sports. He found it difficult to provide for his family and never stayed with the same job for very long.

He had worked a ton of different jobs during the Great Depression, including as an extra in a number of movies. In most cases, he was cast in Westerns as an American Indian chief.

Thorpe was cast as himself in a 1932 comedy Always Kickin’, where he played a coach that was instructing young players how to drop-kick.

While the Great Depression was still going strong, Thorpe sold the film rights to his life story for $1,500, which is about $27,000 in today’s money.

In 1940 and 1950, Thorpe was in the films Knute Rockne, All American, and Wagon Master, respectively.

In 1951, the truly legendary athletic career of Jim Thorpe was memorialized in the film Jim Thorpe- All American. There had been a number of rumors that Thorpe didn’t get any money for the film, but Warner Brothers did pay him $15,000 in addition to $2,500 that went towards an annuity for him.

Jim Thorpe’s Later Life

In addition to working in films after his athletic career, Thorpe worked a bunch of different jobs, including:

  • Ditchdigger
  • Security guard
  • Doorman/bouncer

During WWII, Thorpe even briefly joined the Merchant Marines.

In his later life, Thorpe sadly struggled with chronic alcoholism until his death in 1953.

Jim Thorpe Death: How Did He Die?

The later years of Jim Thorpe were plagued with problems, including chronic alcoholism and money troubles. In 1950, he was admitted to a Philadelphia hospital as a “charity case” to treat lip cancer.

While dining with his wife in their Lomita, California home, Patricia, in early 1953, Thorpe went into heart failure for the third time. For a brief period of time, he was able to speak to the people around him after being revived by artificial respiration. Shortly thereafter, though, he lost consciousness and passed away. The world’s greatest athlete died at the age of 65.

The Legacy of Jim Thorpe

Reinstatement of Olympic Awards

Supporters of Thorpe fought for decades for his Olympic titles to be reinstated. Over the years, several attempts were rebuffed by US Olympic officials.

Those that stood between Thorpe and his rightful honors included Avery Brundage, who wasn’t just the president of the IOC but also Thorpe’s former teammate. He was quoted as having said, “ignorance is no excuse.”

The author Robert Wheeler and his wife, Florence Ridlon, were among Thorpe’s most persistent advocates. They established the Jim Thorpe Foundation in 1982 and were able to prove that Thorpe’s disqualification occurred after the time period allowed by the Olympics rules. Thanks to their hard work and the support they gained from the U.S. Congress, the IOC Executive Committee agreed to reinstate Thorpe’s medals.

However, the saga didn’t end there.

Instead of declaring him the sole winner of the events he won, the pentathlon and the decathlon, they announced him to be co-champion with Wieslander and Ferdinand Bie. This is particularly ridiculous considering that both of these athletes had always held that Thorpe was the only champion in their eyes.

Two of Thorpe’s children, Bill and Gale, were presented with commemorative medals in 1983 by the IOC. The original medals had sadly been stolen from museums and never recovered.

Recently, in July 2020, a petition started going around asking that the IOC declare Thorpe to be the sole winner.

Circulated by Bright Path Strong and backed by Pictureworks Entertainment, the IOC finally voted to make Thorpe the only winner of both the pentathlon and the decathlon on July 14, 2022.

Jim Thorpe's Awards and Honors

Jim Thorpe is considered to be one of the best athletes of all time. During his life and posthumously, he has been the recipient of countless awards and honors.

Here’s just a small sampling:

  • Named the greatest athlete of the half-century by the Associated Press sports editors in 1950
  • Elected to the College Football Hall of Fame in 1951
  • Had a movie made about his life in 1951
  • Elected to the Pro Football Hall of Fame in 1984
  • The U.S. Postal Service Issued Jim Thorpe stamp in 1984 and again in 1998

According to Red Smith, a renowned sports writer:

"Thorpe was the greatest athlete of his time, maybe of any time in any land."

Let’s take a look at some of the organizations, events, and in one case, a town, that was named after the greatest athlete of all time.

Jim Thorpe Marathon

Beginning in 2019, Jim Thorpe, Pennsylvania, started holding the Jim Thorpe Area Running Festival. A series of races are held during the event, including a 26.2-mile marathon.

Jim Thorpe Association

Based in Oklahoma City, the Jim Thorpe Association is a charity and civic organization that is named in memory of the legendary Jim Thorpe. Since 1986, they have been awarding the Jim Thorpe Award to the top college football defensive back.

The Oklahoma Sports Hall of Fame is also a part of the Jim Thorpe Association. Every year, they induct at least two athletes based on their accomplishments.

The Strange Story of Jim Thorpe, Pennsylvania

When Jim Thorpe passed away, residents of his hometown had paid to have his body returned from California by train. His funeral was held in Shawnee, Oklahoma at St. Benedict’s Catholic Church. After the ceremony, his body lay in state at Fairview Cemetery.

The original plan was to build a memorial for the legend at the athletic park in Shawnee, and the residents started raising funds for this effort. State legislators were asked for funding by local officials, but the governor vetoed it.

All the while, Thorpe’s wife had his body shipped to Pennsylvania. The rest of his family had no idea this was happening.

She had heard that there were towns in Pennsylvania that were looking for ways to attract tourism and business. According to Jack, Thorpe’s son, she had made a deal with local officials for monetary benefit.

Essentially, the towns of Mauch Chunk and East Mauch Chunk bought the remains of Jim Thorpe.

At his grave, they built a monument to Jim Thorpe, merged the towns, and renamed the new town Jim Thorpe, Pennsylvania.

Jim Thorpe was buried in a town he had never once set foot in.

As you might imagine, this didn’t sit well with the rest of Thorpe’s family.

His son filed a lawsuit against the town in an effort to have his father’s remains re-interred near his family members in Oklahoma. After several years of complex legal happenings, the case was effectively brought to a close when the U.S. Supreme Court refused to hear it. Thorpe’s remains are therefore still in Jim Thorpe, Pennsylvania.

Jim Thorpe Stats

Baseball Stats

Though baseball wasn't Thorpe's best sport, the fact that he could compete at the professional level in so many different sports is truly remarkable. Over his major league baseball career, Thorpe amassed:

  • 82 runs batted in
  • 91 runs scored
  • .252 batting average over 289 games

In his minor league baseball career, he had 7 home runs, a batting average of .252, and 176 hits.

Football Stats

Jim Thorpe played 52 professional football games and started 37 games. He played for 12 seasons professionally.

Jim Thorpe coaching IU punters
Jim Thorpe around 1915 instructing two Indiana University punters

When he played for the Carlisle Indian School, he had 53 touchdowns in 44 games, scoring 421 points. He led the nation in 1912 with 29 touchdowns and 224 points.

Track and Field Stats

Thorpe won gold in both the pentathlon and decathlon in the 1912 Olympic Games held in Stockholm, Sweden.

In his obituary in the New York Times, it was written that:

“He could run the 100-yard dash in 10 seconds flat, the 220 in 21.8, the 440 in 50.8, the 880 in 1:57, the mile in 4:35, the 120-yard high hurdles in 15 seconds and the 220-yard low hurdles in 24 seconds. He broad-jumped 23 feet 6 inches and high-jumped 6 feet 5 inches. He pole-vaulted 11 feet, threw a shot put 47 feet 9 inches, threw the javelin 163 feet, the hammer 140 feet and the discus 136 feet.”

The Jim Thorpe Memorial

Located in Jim Thorpe, Pennsylvania, there is a monument erected in the honor of Jim Thorpe at his gravesite. About 100 miles southwest of where he had attended Carlisle Indian Industrial School, the site of the monument contains his tomb, historical markers outlining his life story, and two statues of him posed in athletic positions.

Jim Thorpe's grave in Jim Thorpe, Pennsylvania
Jim Thorpe's Grave in Jim Thorpe, Pennsylvania

His grave rests on soil that had been brought from Thorpe’s native Oklahoma as well as from the stadium in Sweden where he won his Olympic medals.

Why Was Jim Thorpe Buried In a Town He’d Never Visited?

Considering that Jim Thorpe was so incredibly talented and versatile as an athlete, and he is considered one of the greatest of all time if not the greatest of all time, it’s not a surprise that there is a memorial built around his grave.

What is surprising, though, is that it’s located in a place that he never once visited.

The short story is that Thorpe’s third wife was left in poverty after he passed, and she was frustrated by how long it was taking his hometown to raise the necessary funds to build a memorial.

So she took matters into her own hands and essentially sold his remains to two small towns in Pennsylvania that were looking for something to draw tourists.

The two towns united and were renamed Jim Thorpe, Pennsylvania, and his body still rests there under his monument, despite the efforts of his other family members to have his remains exhumed and relocated to his home state of Oklahoma.

Jim Thorpe’s Son Vs. Jim Thorpe, PA: The Lawsuit to Move Jim Thorpe’s Remains

The son of Jim Thorpe sued the town of Jim Thorpe in 2010 in an effort to have his father’s remains moved to Oklahoma. The suit was based on a 1990 law known as the Native American Graves Protection and Repatriation Act (NAGPRA). The law was designed to help rectify the historical plundering of Native American burial grounds.

While a federal district court agreed with him, the decision was reversed by the 3rd U.S. Circuit Court of Appeals in 2014.

When they tried to bring the case in front of the U.S. Supreme Court, they refused to hear it. For now, that’s where the story ends, and his body remains in Jim Thorpe, Pennsylvania.

Movies About Jim Thorpe

Jim Thorpe: All American - About the 1951 Movie

Titled Man of Bronze in the UK, this film was produced by Warner Bros. in 1951 and was directed by Michael Curtiz. Thorpe was played by Burt Lancaster and the story was a biographical look at the life of the incredible athlete.

Bright Path: The Jim Thorpe Story, The Jim Thorpe Movie by Angelina Jolie

The film Bright Path: The Jim Thorpe Story, will be produced by Angelina Jolie and star Martin Sensmeier as the incredibly talented Thorpe. Jolie has stated that she has already spent time with Bill Thorpe and that she will be working with the Thope family and the Tribes will creating the film.

Partnering with Indian Country to create the film, the filmmakers say they are dedicated to telling the authentic story.

There’s a lot of excitement and hype around this film, but there’s no known release date as of yet.

Books About Jim Thorpe

Jim Thorpe, Original All-American, Joseph Burchac

If you're looking for a solid summary of the life and achievements of Jim Thorpe, this is a great source. Interviewing people knowledgeable about Thorpe and using old letters to substantiate the book's claims, this is a well-researched text about his life.

Undefeated: Jim Thorpe and the Carlisle Indian School Football Team, Steve Sheinkin

Native American Son: The Life and Sporting Legend of Jim Thorpe, Kate Buford

Some people consider this to be the definitive biography of Jim Thorpe. Highly detailed, this is a good book for individuals that are looking for a thoroughly-researched look at the entire life of the American icon.

Jim Thorpe: World’s Greatest Athlete, Robert W. Wheeler

This is another well-researched biography about the legend Jim Thorpe. Wheeler was a driving force behind Thorpe's medals being reinstated-- Sports Illustrated credits him with primary responsibility for his Olympic god medals being restored in 1982.

Carlisle Vs. Army: Jim Thorpe, Dwight Eisenhower, Pop Warner, and the Forgotten Story of Football’s Greatest Battle, Lars Anderson

This narrative nonfiction book by Lars Anderson takes a look at one of the greatest contests in the history of college football. In a classic David vs. Goliath matchup that pits Jim Thorpe against future president Dwight D. Eisenhower, this is a tremendous story that will delight Jim Thorpe fans, football lovers, and American history buffs alike.

Over the years, a lot of books have been written about Jim Thorpe. Here are some other titles you might want to check out:

  • Jim Thorpe: A Biography, William A. Cook
  • Jim Thorpe’s Bright Path, Joseph Bruchac
  • All American: The Rise and Fall of Jim Thorpe, Bill Crawford
  • Jim Thorpe: An Athlete For the Ages, Ellen Labrecque
  • Walter Lingo, Jim Thorpe, and the Oorang Indians: How a Dog Kennel Owner Created the NFL’s Most Famous Traveling Team, Chris Willis
  • The Real All Americans: The Team That Changed a Game, a People, a Nation, Sally Jenkins

Children’s Books About Jim Thorpe

The story of Jim Thorpe is a wonderful way for children to learn about overcoming obstacles, the history of sports, and the difficulties faced by Native Americans in the early twentieth century.

Here are some of the books about Jim Thorpe written for children:

  • The Story of All-Star Athlete Jim Thorpe, Joseph Bruchac
  • Unstoppable: How Jim Thorpe and the Carlisle Indian School Football Team Defeated Army, Art Coulson
  • Jim Thorpe: Olympic Champion, Jr. Guernsey Van Riper
  • Jim Thorpe: Greatest Athlete in the World, Jennifer Lee Fandel

Jim Thorpe FAQ:

What Was Jim Thorpe Famous For?

In short, Jim Thorpe was famous for being a truly incredible and versatile athlete. He is thought to have been one of the best athletes of all time, if not the best athlete of all time.

As the first Native American that won gold for the U.S. at the Olympics, he quickly became a national icon and hero. On top of dominating in track and field, Thorpe played baseball, football, and basketball.

What Sport Did Jim Thorpe Play?

Jim Thorpe competed on the American track and field team at the 1912 Olympics. He also played baseball, football, and basketball professionally. As an indication of his all-around athletic talent, he even briefly considered playing professional hockey.

What Team Did Jim Thorpe Play For?

Jim Thorpe didn’t just play for one team, he played for a huge handful of teams in several professional sports.

Jim Thorpe during spring training with the New York Giants
Jim Thorpe during spring training with the New York Giants in Marlin, Texas, probably around 1918

He played on:

  • Cleveland Indians
  • Oorang Indians
  • Canton Bulldogs
  • New York Giants
  • Chicago Cardinals
  • Rock Island Independents
  • Cincinnati Reds
  • San Francisco Giants
  • Boston Braves

Where Was Jim Thorpe Born?

Jim Thorpe was born in what is now Oklahoma near Prague, Indian Territory. At the time, the land was that of the Sac and Fox Nation.

What Was Jim Thorpe’s Height?

Some accounts say Jim Thorpe was 5'11" while others call him 6'1". As you might imagine, his weight varied over the years, but it is said that he was 185 pounds when he competed in the Olympic games.

To help you get a picture of the man himself, during the Stockholm games he had a 42-inch chest, a 32-inch waist, and 24-inch thighs.

What Indian Tribe Did Jim Thorpe Belong To?

Jim Thorpe was a tribal member of the Sac and Fox Nation. Forcibly relocated to Oklahoma in the 1870s, this tribe was originally from the Lake Michigan and Lake Huron area.

There are two other Sac and Fox tribes, which are the Sac and Fox Nation of Missouri in Kansas and Nebraska and the Sac and Fox Tribe of the Mississippi in Iowa.

What Medals Did Jim Thorpe Win?

At the 1912 Olympic Games in Stockholm, Sweden, Jim Thorpe won the gold medal in both the pentathlon and the decathlon.

Why Was Jim Thorpe Stripped of His Medals?

Jim Thorpe was stripped of his medals because the IOC and AAU were confronted with the fact that he had briefly been paid to play baseball. Based on the strict rules about amateurism at the time that barred professionals from competing in the Olympics, they took his medals away and removed his title as the winner of both the pentathlon and the decathlon.

Did Jim Thorpe Get His Medals Back?

Yes– but not until thirty years after his death. His medals were reinstated in the early 1980s. However, it wasn’t until 2022 that he was named the sole winner of the pentathlon and the decathlon rather than a co-winner.

What Records Did Jim Thorpe Break or Set?

The total points Thorpe won at the 1912 Olympics amounted to 8,412.95 out of a possible 10,000. This was 688 more points than the second-place finisher, Swede Hugo Wieslander. It would take four more Olympics for anyone to beat this score.

Of course, it's also notable that he was the first Native American to win an Olympic gold medal for the U.S.

When he played on Carlisle's football team, he ran 1,869 yards on 191 attempts, helping to lead the team to a 12-1-1 record.

What Did Jim Thorpe Do Later in Life?

Jim Thorpe didn't retire from professional sports until he was 41. In his later life, he appeared in a number of films, usually in Westerns as an American Indian.

He also worked a number of different jobs, including a security guard, doorman and bouncer, construction worker, and ditch digger.

Thorpe even had a brief stint in the Merchant Marines during WWII.

Unfortunately, he struggled with poverty and chronic alcoholism in his later life until his death in 1953.

What Disease Did Jim Thorpe Suffer From?

In 1950, Thorpe was hospitalized for lip cancer. He also suffered from chronic alcoholism. Thorpe had three heart attacks in his life, the third of which was fatal. He passed away at his trailer home in Lomita, California on March 29, 1953.

Did Jim Thorpe Win a Gold Medal With Mismatched Shoes?

While there are different stories about Jim Thorpe's mismatched shoes at the Olympics, the consensus is that he won a gold medal wearing two different shoes-- one too big and one too small.

According to Bob Wheeler, author of Jim Thorpe: The World's Greatest Athlete, Thorpe's shoes went missing just a couple of minutes before the decathlon's 1500-meter race.

Remarkably, this didn't shut Thorpe down.

He borrowed one shoe from a teammate and found the other in the garbage.

It's incredible in its own right that he forged forward with totally inadequate gear. He had to squeeze his foot into his teammate's shoe, and wear extra socks to make the shoe fit that he found in the trash.

To make the story even more insane, though, he still won the race.

Thorpe was an incredible being-- he was said to have "moved like a breeze" and with "a kind of ease in his gait that is hard to describe. Equilibrium with no strictures."

To me, Jim Thorpe was way bigger than sports. His is a story of facing tremendous obstacles and overcoming them. In American society, he became a symbol of the injustice that Native Americans faced.

He is the epitome of the notion that no matter what troubles you face in life, you can overcome them. Born without U.S. citizenship because he was raised as a Native American, Thorpe climbed his way up the ladder to become a tremendously famous American icon.

Though more than a century has passed since his Olympic victories, the story of Jim Thorpe is truly timeless.

This story is incredibly powerful to me, so I wanted to share it with you. Feel free to learn more about me and my projects here.

After spending my entire life in Arkansas, in 2020 I finally made good on my life-long goal and moved to the great state of Texas. It’s abundantly clear to me that this was one of the best decisions I’ve ever made in terms of both my finances and my lifestyle, and I feel compelled to share what I’ve learned so far about Texas living 101.

I could go on and on about the best parts of being a Texan. From the low cost of living and rapidly appreciating housing market to the rich history and warm climate, it's no surprise to me that hundreds of thousands of people move here every year.

Of course, any place is going to have its downsides and there are definitely both pros and cons of living in Texas. If you're considering moving here, you'll want to have a clear sense of both what you'll be gaining and what you could be giving up, depending on where you're moving from.

So, without further ado, let's dive in and take a look at the best and worst things about living in Texas from my perspective.

Benefits of Living in Texas

austin texas pros and cons
Even in the most expensive places to live in Texas, the cost of living is significantly lower than in coastal cities like NYC or San Francisco.

Low Cost of Living in Texas

With inflation rising out of control and many coastal cities outrageously expensive, the low cost of living in Texas is a major pro. When the cost of living in the US as a whole is considered a 100, Texas ranks at 93.9. If you’re moving to Texas from a high-cost of living state, you’ll be able to achieve the same standard of living for less.

Rapid Appreciation

With so many people moving to Texas, it’s no surprise that the housing market is booming in the state. In 2020, I bought my home for $640k. In just two years, its value has risen to more than $1 million. While skyrocketing home prices across the country are expected to slow with rising interest rates and inflation, Texas is still going strong. In fact, while national demand for housing has started to decline, demand in Texas has continued to accelerate.

Strong Asset Protection Laws

If asset protection is important to you (as, frankly, it probably should be,) Texas is one of the best states to live in the entire country. Texas Homestead Law protects your home if creditors are coming after you, and there are a number of personal property exemptions in the state as well.

By exploring the rest of my blog, you'll find that I'm a big proponent of the stealth wealth lifestyle and taking asset protection seriously. You can learn about more wealth protection strategies here.

There’s No State Income Tax

For people moving from highly-taxed states like California or New York, the fact that there’s no income tax in Texas is likely a huge relief. There are only nine states in the country that have absolutely no income tax.

That being said, the state has to collect its money somehow. You’ll find that property taxes and sales taxes are high in Texas. Regardless, the Lone Star State is still considered to be one of the ten U.S. states with the lowest overall state-local tax burdens.

Options to Live in Either Large Cities or Small Towns

Texas is so enormous that there really is a wide range of lifestyles that the state supports. Want to live in a big, bustling city? No problem. Looking for a more laidback, small-town vibe? We’ve got that too.

There are a bunch of great options if you want to live outside of the biggest cities in Texas. A number of areas with a small-town feel that still have plenty of amenities have been growing quickly, including San Marcos, Wavo, and New Braunfels.

If cities are more your style, you’ll be happy in Texas, too. Four of the ten largest cities in the U.S. by population are right here in Texas (Houston, San Antonio, Dallas, and Austin), but there are also plenty of options when it comes to small- and mid-sized cities like El Paso and Arlington.

The Fascinating History of Texas

the alamo and texas history one of the pros of living in texas
You don't have to be a history buff to appreciate the rich and fascinating story of Texas.

When it comes to state history, there’s no shortage of fascinating rabbit holes to dive into when you learn about Texas. The first European settlers in the state were Spanish missionaries, who founded San Antonio in 1718. It remained sparsely populated until after the Revolutionary War and the War of Mexican Independence due to hostility from the native population. Once the Mexican government was established, settlers from the U.S. began claiming land in the region.

There was a lot of friction in these early days due to the resulting population explosion and tension between American and Mexican residents. In 1836, the Texas Republic was formed after a number of small insurrections and finally the Texas Revolution.

The newly formed nation only lasted a few short years due to incursions by Mexican troops. In 1845, Texas negotiated with the United States to join the union.

The rest, as they say, is history. When you move to Texas, you’ll have no shortage of historical sites to explore. Some of the best spots any history buff will want to check out are:

  • The Alamo
  • The San Jacinto Monument
  • Historical Fredericksburg
  • The Victorian Mansions of Galveston
  • Fort Leaton State Historic Site
  • Port Isabel Lighthouse State Historic Site
  • San Antonio Missions National Historical Park

Incredible State and National Parks

Big Bend National Park one of the pros of living in Texas
While Texas might be a bit short on BLM land compared to other western states, there are plenty of beautiful national and state parks to explore all in every corner of the Lone Star State.

Texas is so huge that there is an enormous diversity of ecosystems all within its borders. Even if you’re living in a dense urban area, you’re never terribly far from some incredible natural environments. Home to two national parks and 89 state parks, natural areas, and historic sites, the Lone Star State also has five state forests and two state arboretums.

It’s worth noting, though, that Texas has a lot less BLM land than other neighboring, western states. For people that love to head out to the desert to camp on the weekends, Texas isn’t as great as places like Arizona, New Mexico, and Utah.

After moving from the incredible scenery of the Ozarks, I have definitely had to adjust to the environment of Texas. Eastern Texas is greener and lusher than western Texas (which is dry and, in many places, a desert.) If living in a treed environment is important to you, you'll want to stick to the east side of the state.

Warm Climate

If you’re moving from a place with cold, seemingly endless winters, you’ll love the year-round warm climate of Texas. While snow does occasionally fall in the state, and freak cold spells do occur, you can usually bank on the weather being pleasantly warm.

Pleasant, that is, until the summers. When we get into the downsides of living in Texas we’ll talk about the sweltering summers. In general, though, the statewide annual temperature average in the state is 65 degrees. Since the state is so enormous and there are a lot of different types of environments in Texas, you’ll definitely want to check out the local averages and climate before moving.

For example, Austin, Dallas, San Antonio, and Houston all frequently rank on lists of the hottest cities in the US. While the Texas Panhandle doesn’t really register as “cold” on any lists, it certainly has the coolest summers, on average, out of the entire state.

If you're moving from a place with harsh winters and you're sick of waking up at 5 am to shovel out your car, the mild winters of Texas will definitely be a pleasant change of pace.

Diversity

Texas is the second most diverse state in the US, according to a study from WalletHub. This study analyzed all fifty states in terms of the ethnic, racial, economic, and cultural diversity of their residents.

The Lone Star State ranked second in linguistic diversity, fourth in racial and ethnic diversity, and third in industry diversity.

If you move here, you'll also find that there's a lot of diversity when it comes to culture and politics. Though Texas has a reputation as a conservative state, there are definitely some areas that are much more liberal. This helps create a healthy balance where there is something for everyone, and you don't have to worry about falling into a self-perpetuating echo chamber.

Plentiful Job and Educational Opportunities

Whether you want to further your education or your career, Texas offers tons of opportunities.

With the second-largest economy in the US by GDP, Texas is home to six of the largest 50 companies in the Fortune 500. Though Texas comes in second place to California when analyzed by GDP, it actually grossed more money than both California and New York combined in exports in 2017.

There are a lot of different industries that are booming in Texas, including:

  • Agriculture
  • Aeronautics
  • Technology
  • Energy
  • Tourism
  • Entertainment

With a large and diverse economy, thanks to our large population, thriving cities, and abundance of natural resources, Texas is a great place to start your career, further your career, or benefit from the many leading centers of higher education in the state.

Are you more of an entrepreneur that a careerist? Not a problem at all, in fact, you'll love it here. With fewer government regulations than many other states, Texas is decidedly pro-business. With more than 50 billionaires calling Texas home, anyone who wants to make their own way will appreciate the business-friendly environment of the state.

Other Pros of Living in Texas

I could write a whole book about the pros of living in Texas, but for now, I'll just add a few additional reasons why I absolutely love living here.

One huge pro is that there are a number of major international airports in the state. This makes it super easy to get anywhere in the world without the trip to the airport itself being a huge hassle.

Another great thing about Texas is that it's a major hub for sports and there are tons of entertainment options when you're within a reasonable distance from one of the cities.

Lastly, a cherry on top of living in Texas is that it has some of the lowest electricity costs in the U.S.  Natural gas prices are also on the low end at the national level, and Texas has the fourth-best gasoline prices in the states.

Disadvantages to Texas Living

I seriously love living in Texas, but any place is going to have some downsides. Moving to Texas has been a lifelong dream of mine, and I have no regrets. There’s no reason to have rose-colored glasses, though. Here are some of the disadvantages I've noticed while living in Texas.

Sweltering Summers

There’s really no getting around it: Texas is hot in the summer. Since the state is so big, you can experience dry, desert-like summers in west Texas and extremely humid summers on the east side. In fact, there is a distinct line that separates the state known as the dry line or Marfa front.

Regardless of the type of heat, one of the definite downsides of living in Texas are the sweltering summers.

Traffic

Houston highway cons of living in Texas
Every place is going to have its downsides, and the most densely populated parts of Texas can definitely have frustrating traffic.

Another thing that people considering moving to Texas will want to know about is the traffic. This doesn’t just mean that getting from point A to point B in the populated cities can be a headache, it also means that there are more car accidents here than less traffic-ridden places.

High Property Taxes and Sales Tax

Though the overall tax burden is really pretty good for Texas, and the lack of income tax is a huge win, the high property taxes and sales tax rate are worth mentioning. The property taxes are assessed by local county assessors on 100% of the appraised value, and the average effective property tax rate is about 1.8%. This makes it the state with the seventh-highest property taxes in the entire country.

The sales tax in Texas is also fairly steep at 6.25%. That being said, there are a lot of states where the sales tax is higher, tying Illinois and Massachusetts for thirteenth place when it comes to U.S. states with the highest property taxes.

It’s Hard to Find Affordable Healthcare

One report that was published in 2019 from The Commonwealth Fund found that Texas ranked 49th when it comes to health care access and affordability. One of the primary reasons that it received such a poor ranking was that Texas hasn't expanded Medicaid eligibility.

Severe Weather

Depending on which area of Texas you're considering moving to, some of the types of severe weather that impact the state might not need to be at the top of your "things to worry about" list. For example, Texas is exposed to hurricanes every year, but by far the most vulnerable region is the eastern section along the Gulf.

Other types of severe weather conditions that can occur in Texas include flooding, tornadoes, extreme thunderstorms, and wildfires. When you've zeroed in on a region you're interested in, you'll want to look more closely at the types of severe weather you might experience.

Other Cons of Living in Texas

It would be hard to write an article about the pros and cons of living in Texas without mentioning the power grid failure in 2021 that made international news. While issues with the grid are rare, the event definitely made it clear what it means to be the only state in the continental U.S. with our own power grid.

Another thing worth mentioning is crime. As with pretty much anywhere else in America, how safe Texas is has everything to do with precisely where you are. As is common in the U.S, the most dangerous areas in Texas are typically neighborhoods inside larger cities where there is high unemployment, low income, and lack of quality housing.

Texas Living vs California Living: Why Texas Wins

The two most populous states in the country are California and Texas. While California has long been hailed as “The Land of Milk and Honey,” people have been leaving California in droves for other states in recent years. In fact, more people have left California than have moved to the state since the 1990s.

People are leaving the state for a lot of reasons, including:

  • Rising state taxes
  • It’s one of the most expensive states in the country
  • Social and economic challenges
  • Devastating wildfires

The exodus from California has meant that other states have been receiving Golden State residents. The states that have been receiving the most California residents in recent years are:

  • Texas
  • Arizona
  • Nevada
  • Washington
  • Oregon
  • Colorado
  • Florida

There are a lot of reasons that Texas wins out in the competition with California. Some of the most compelling arguments in favor of the Lone Star State, in my mind, include:

  • The cost of living
  • The business-friendly atmosphere
  • The economy
  • Taxes
  • Much more affordable housing
  • More affordable healthcare

For anyone that’s interested in building wealth over time, it’s pretty much a no-brainer when you compare Texas and California.

The Seven Regions of Texas: What to Know

When you’ve started looking at moving to Texas, it can get pretty overwhelming to decide where to begin. Texas is really made up of seven distinct regions, each of which has its own geographical features, attractions, culture, and more.

Big Bend Country

In far west Texas, you’ll find Big Bend Country. This is the only spot in all of Texas where you’ll find real mountains, and it’s also home to one of the most well-known national parks in the US– Big Bend National Park.

The largest city in this region is El Paso, and otherwise, you’ll mostly find smaller cities and towns that are pretty spread out. Arguably the most remote part of the state and perhaps also the most beautiful. If you’re looking for big-city living, this probably isn’t the spot for you.

Panhandle-Plains

Up in the northwestern part of Texas are the Panhandle Plains. The second-largest canyon in the U.S. is found here (Palo Duro Canyon), and the best-known cities in the region are Amarillo and Lubbock.

Other than some deep canyons carved by rivers and tributaries, the Panhandle-Plains are mostly flat grasslands and plains without many trees.

Hill Country

South of the Panhandle-Plains and east of Big Bend Country, Hill Country is pretty much in the center of the Lone Star State. With hilly terrain, steep canyons, springs, and underground caves and lakes, this is a much greener part of the state than the two regions we’ve discussed so far.

Home to Austin, the state’s capital, and a number of other small cities and towns, this is a bustling and thriving region.

South Texas Plains

South of Hill Country and bordering the Rio Grande River, a big chunk of this area is dry and covered in thorny brush and grasses. San Antonio is the biggest city in the area which is home to plenty of attractions including theme parks, sporting events, historical landmarks, and more.

Within this region, you can find the Lower Rio Grande Valley, which is home to subtropical woodlands, palm trees, and a lot of beautiful tropical birds.

Prairies and Lakes

Including the Dallas/Fort Worth Metroplex, Waco, College Station, and a lot of other cities and towns, the Prairies and Lakes region is located in north-central and central Texas.

If you’re interested in living in a diverse region that offers the ability to spend time in a major American city and also hop out to small-town America to go antiquing, this might be a good choice for you.

Piney Woods

Piney Woods is the easternmost region of Texas. This is a more remote area, with the “big” cities being Huntsville, Conroe, and Tyler. There are also a number of small towns that have plenty of charm and fascinating histories.

The landscape here is made up of lush meadows, forests, streams, and quaint historic towns. Home to four national forests, this is a popular place for visitors that want to experience the great outdoors.

Gulf Coast

Stretching along the Gulf of Mexico, the Gulf Coast region reaches all the way from the Mexican border to Louisiana. The cities found in this area include Houston, Corpus Christi, Galveston, and South Padre Island.

In addition to the cities, there are a number of charming smaller towns in the region.

Where to Live in Texas

So now that you’re convinced that you want to live in Texas, where the heck are you going to live? There really is something for everyone here, but you’ll want to consider what you want to prioritize to help narrow down the options.

Best Small Towns to Live in Texas

There’s no shortage of small towns in the state of Texas. Some of the best small towns to live in include:

  • Graham, Texas
  • Marfa, Texas
  • Marathon, Texas
  • Fort  Davis, Texas
  • La Grange, Texas
  • Cuero, Texas
  • Fredericksburg, Texas
  • Aransas Pass, Texas
  • Rockport, Texas

Best Places to Live in Texas for Young Adults

When you're in your 20s, you're probably looking for a different type of living environment than you will be when you're married with kids. Unless you're specifically hoping to move to a small town in Texas for some solitude and space, you'll probably want to look into Austin, Houston, and San Antonio. If you're looking to tap into some of the cowboy vibe of Texas, check out the Dallas/Fort Worth area.

Best Places to Live in Texas for Families

When you're moving with kids to Texas, you want to make sure that your new home suits everyone in the family. Some of the most family-friendly places in the state I'd recommend checking out include:

  • Houston
  • Richardson
  • Dallas
  • Canyon
  • Wylie
  • Sachse
  • Elgin
  • Prosper
  • Mansfield
  • Frisco

Best Areas to Live in Houston

Houston is the biggest city in Texas and the fourth-largest city in the US by population. It’s also impressively large by area, ranking at number nine for the whole nation. This means that you have a whole lot of options when you’re looking for neighborhoods in Space City.

Some of my suggestions for Houston areas to live in are:

  • Downtown Houston
  • Montrose
  • Midtown
  • West University Place
  • Second Ward
  • Medical Center
  • Memorial City
  • Heights

Best Areas to Live in Dallas-Fort Worth

The third-biggest city in Texas by both population and area, the Dallas-Fort Worth metroplex experienced the largest population growth of all metro areas in the U.S. between July 2020 and July 2021, according to the Census Bureau.

  • Deep Ellum
  • Arlington
  • Highland Park
  • Downtown Fort Worth
  • University Park
  • Las Colinas
  • Addison
  • Richardson
  • Westover Hills
  • Roanoke/Southlake area - where I live

Best Areas to Live in San Antonio

Between 2021 and 2022, more people moved to San Antonio than anywhere else in the country. Some of the best neighborhoods in the Alamo City include:

  • Downtown
  • Terrell Hills
  • Northeast Inner Loop
  • Alamo Hills
  • Boerne
  • New Braunfels
  • Helotes
  • Hollywood Park
  • Converse
  • Stone Oak
  • Shavano Park
  • Fair Oaks Ranch

Best Areas to Live in Austin

Another fast-growing city in Texas, the numeric population growth in Austin ranks fourth in the U.S. between July 2020 and July 2021. A word of warning to people considering moving to the capital city: Austin has long been famous for its beloved weirdness. There is a lot of local concern that this has been diluted by the rapid growth of the city, and anyone that wants to move to the Austin they visited in the 90s will likely find it be radically different than it once was.

That being said, let's check out some of the best areas to live in Austin:

  • Barton Hills
  • Allandale
  • Cedar Park
  • Buda
  • Downtown
  • Cherrywood
  • East Austin
  • Dripping Springs
  • Hyde Park
  • Georgetown
  • Leander
  • Kyle
  • North Loop
  • Meander
  • Old West Austin
  • North University
  • South Austin

Is Texas the Right State For You?

There is something truly unique about Texas, and I am so glad that I finally made the move to this incredible state after dreaming of being a Texan my whole life. Everyone is different, though, so it's important to identify what is and isn't important to you when considering making the move.

If you're desperate to be in a warm climate, a business-friendly atmosphere, and a state with no income taxes, Texas should definitely be on the top of your list. If you're the type of person that starts to get uncomfortable when the temperature sneaks above 65, on the other hand, and you prefer condensed metro areas to sprawling ones, you might find Texas to require compromises you aren't willing to make.

Moving to Texas has been so beneficial to me that I feel driven to share what I've learned so far to help others make the right decision for them. If you're wondering who the heck I am, be sure to check out my projects and more about me here.

Most parents want to offer their children a better life than they had. If you’re interested in systematic wealth building, you’re probably curious about how to build generational wealth. After all, money is a tool that can allow your children and grandchildren to have the ability to lead meaningful and impactful lives.

Generational wealth isn’t usually something that happens by accident, though. Even if you save up an incredible fortune, it’s all too possible for future generations to not only squander the wealth, but also suffer tremendously because of it.

So what is generational wealth, exactly, and how can you build it? And, perhaps most importantly, what can you do to avoid the negative potential outcomes of offering a fortune to your descendants that they didn’t work to create on their own?

Let’s do a deep dive into everything you need to know about generational wealth to help set up the future generations of your family for success.

What Is Generational Wealth?

The term generational wealth refers to accumulated wealth that is passed down from one generation to the next. This fortune doesn’t have to just come in the form of cash, but can also include:

  • Stocks
  • Bonds
  • Real estate
  • Family businesses
  • Jewelry, antiques, automobiles, and other valuable objects

Generational wealth can be passed down after your death in the form of an inheritance, but it can also be shared with your children and grandchildren while you’re still alive.

family with generational wealth holding hands
Generational wealth is a term that refers to assets that are passed down from one generation to the next.

Why Is Generational Wealth Important?

When you build generational wealth, you are granting the future generations of your family a significant financial advantage. The goal isn’t to create an outcome where your kids never have to work a day in their lives and suffer from severe affluenza, but instead to open up a lot of possibilities for your kids and their kids.

When you create generational wealth, it means that your children, your grandchildren, and so on, can begin their adult lives on a higher rung of the hierarchy of needs. If you’ve ever lived paycheck to paycheck, you know just how costly and time-consuming it is to be poor. In the best-case scenario, generational wealth can allow your progeny to accomplish more in their lives than you were able to because they started out with a huge advantage.

If you want to have the ability to truly impact the world, creating generational wealth is one of the most effective ways to do so. While rich people can get a bad rap in this day and age, money is definitely one of the most powerful tools when it comes to actually creating positive change in your community and the world as a whole.

When you create generational wealth that your children and their children can use, you are giving them the gift of freedom. Money is a resource that allows people to pursue their dreams and affords them security in life.

Is a Traditional Career Enough to Build Generational Wealth?

people in cubicles that will struggle to build generational wealth without extreme savings
It isn't impossible to build generational wealth with just a traditional career, but most family fortunes are built through entrepreneurship, investment, and other methods beyond being an employee.

If you work a regular 9-5 job, you might be wondering if that will be enough to build generational wealth. The answer to this question obviously depends on what you have in mind when it comes to how much wealth you want to leave your children, what your income is, how many years you plan on working, your cost of living, and much more.

That being said, building substantial generational wealth is probably not possible with a traditional career alone without taking on extreme measures when it comes to saving and investment.

Let’s take a look at some of the biggest names in generational wealth to paint a clearer picture of what I’m talking about.

Some of the most recognizable family names out there certainly didn’t accrue generational wealth working standard W-2 jobs.

John D. Rockefeller is believed to be one of the richest men that has ever lived, despite the fact that he started Standard Oil all the way back in 1870. The fortune he built initially is now divided among 174 different heirs and funds a massive amount of charitable and philanthropic work.

The Walton Family is said to have a net worth of about $235 billion between the seven heirs to Sam Walton’s fortune. This massive generational wealth was built through the Walmart retail empire, a public company that has a market cap of more than $395 billion.

While H.L. Hunt might not be as much of a household name as that of Rockefeller or Walmart, the Hunt family fortune is nothing to scoff at. Supposedly using poker winnings to secure title to a big chunk of the East Texas Oil Field (one of the largest deposits of oil in the world,) the massive wealth of the Hunt family definitely wasn’t built by showing up at the office at 8:45 and clocking out at 5:15 alone.

I could go on, but the point is that the biggest players in the world of generational wealth were entrepreneurs, not employees. While you absolutely can build up a nice inheritance for your children through aggressive savings from a traditional career, building truly significant wealth usually takes something more than a regular job.

How Are Most Generational Fortunes Built?

father walking with son who he'll pass generational wealth to
A recent study has found that most of the world's richest people weren't born into wealth but instead are self-made.

Of course, there’s a huge range between leaving your children in debt and building up a Rockefeller-style fortune. You don’t have to be a billionaire to create generational wealth that can have a huge impact on the lives of your descendants for generations to come.

The deeper you get into the examples of families that have generational wealth, though, you will start to notice a pattern.

In short, entrepreneurship of one form or another seems to be the most common thread between examples of family wealth. This doesn’t necessarily mean that you have to start the next big social media platform, though that certainly wouldn’t hurt.

That being said, most of the world’s wealthiest people have a number of different irons in the fire. Some other wealth creation methods you’ll want to consider include:

  • Investing in the stock market
  • Investing in real estate
  • Visionary ideas/inventions
  • Having multiple sources of income

If you are starting from zero or worse, (that student loan debt can really be a downer,) it’s worth noting that nearly 68% of the world’s richest people are considered ‘self-made.’ Don’t assume that you can’t build generational wealth within you’re lifetime without a huge inheritance of your own– it is completely within your power to build wealth from the ground up.

How to Build Generational Wealth

Now that we’ve taken a look at the basics of generational wealth, let’s hop into how to build it.

Adopt the Right Mindset

One of the most important steps to building generational wealth is about something way more valuable than money– your mindset. In order to accrue assets that you can pass on to future generations, you’re going to need a mindset that allows you to pursue long-term goals on a playing field that offers the opportunity for big gains.

Become an Investor

stock market charts for investing to build generational wealth
Becoming an investor is pretty much essential if you want to build generational wealth.

Of course, investing is also essential to building generational wealth. If you’ve got a big pile of cash and you bury it under the oak tree in your backyard for your grandkids to find, they’re probably going to be pretty disappointed. (As an example, $5,000 in 1950 is the equivalent of about $60k in 2022.)

Not only do you need to invest your money to make sure that it maintains its value in face of inflation, but investing is going to be a big part of how you make your money work for you.v

Build a Business

Another way that you can generate wealth is through business ownership. This doesn’t necessarily mean you have to quit your day job if you don’t want to– it’s definitely possible to use your savings from your career to get a business off the ground as an investment.

Not only can a business help you to build your wealth through income generation, but a business is also an asset that you can pass down to future generations. If your great-great-great grandkids don’t want to work in the family business, no problem. All that means is that they have a saleable asset.

Reduce Your Taxes

One of the biggest expenses you’ll have throughout your life is taxes. If you go through your life without tax-advantaged strategies, you’re taking money right out of the hands of your descendants and handing it over to Uncle Sam. If you know anything about compound interest, you’ll understand exactly how negatively impactful that can be on generational wealth.

Diversify Your Income Streams

Diversifying your income streams allows many of the same benefits you can receive from diversifying your investment portfolio. If you have all of your eggs in one basket, you’re putting yourself at a much greater risk than if you’ve got them spread out in a bunch of different baskets.

No matter how stable your business or job seems now, we ultimately never know what’s going to happen in life. When you have a number of different income-producing endeavors, it means the sky doesn’t fall if something unexpected occurs.

Avoid Mindless Consumerism

Building wealth doesn’t do you much good if you spend it all on useless material objects. I’m not saying you should find yourself a nice spot in the nearest shanty-town, but I am definitely a big proponent of avoiding the trappings of consumerism.

In fact, I believe wholeheartedly in living a stealth wealth lifestyle. Not only does it keep you safe from spending your money on things you don’t need, but it also can be a valuable asset when it comes to protecting your wealth. To learn more about why you might want to keep your wealth a secret, check out my recent post on “stealth wealth”.

Invest in Your Kids

One of the most important steps you can take towards maintaining generational wealth is investing in your children. A lot of people assume that this mostly means sending their kids to college. While a college education might be the right choice for your kid, it is not the only way to obtain success in life and sometimes is an expensive derailment from the type of education that is most beneficial to sustainable generational wealth.

You are the one that can begin the cycle of generational wealth, and you can certainly set things up to avoid your children blowing their inheritance in one crazy year. That being said, without proper education about personal finance and wealth, your descendants will likely make costly mistakes and might even suffer from the afflictions that can come along with being rich.

Beyond teaching your kids about personal finance, you’ll also want to strive to give them the skills they need to grow into responsible, mature, competent, and capable adults. These essential tools are not something you should expect are taught in classrooms, and it takes deliberate effort on the part of the parent to create this outcome. If your children are growing up wealthy, you will likely need to work extra hard to help your children learn the lessons that you learned through the hardships you encountered on your way to success.

Practice Wealth Protection Strategies

You don’t want to learn the hard way that even the most immense fortunes can be squandered quickly if you aren’t careful. Some of the most successful and wealthy people in history have filed for bankruptcy (Michael Jackson, Mike Tyson, and Nicolas Cage, to name a few.)

Even if you aren’t going on wild spending sprees, how much wealth you can tuck away for your kids has a lot to do with deliberating using wealth protection strategies.

How to Pass Down Generational Wealth

Passing down generational wealth isn’t something you want to leave to chance. Let’s take a look at how exactly to pass down generational wealth.

Have an Estate Plan

One of the most essential pieces of the generational wealth puzzle is having an estate plan. Not only can it help to minimize or even eliminate estate taxes but it can also help set up safeguards against your hard-earned fortune disappearing due to a few crazy years of excess on the part of your progeny.

When creating an estate plan, it’s a good idea to work with financial professionals that can help you work out the best options for your particular circumstance. That being said, some aspects of estate planning include:

  • Writing a will
  • Appointing an executor
  • Planning for estate taxes
  • Creating trusts
  • Naming a guardian for minor children
  • Creating a living will
  • Naming account beneficiaries
  • Determining a financial and durable power of attorney

By creating a thorough estate plan, you can avoid a lot of drama and chaos after your death. The last thing you want is for the wealth you worked so hard for to tear your family apart.

Teach Your Children About Personal Finance

It’s all too common for parents to not talk to their children about money and personal finance. This is a big mistake and can end up leaving your descendants unequipped to deal with the fortune they inherit. If you want to create wealth that lasts for generations, go out of your way to teach your kids how to build, grow, and manage money.

Buy Life Insurance

Life insurance can also be used to pass your wealth down. If you end up dying unexpectedly, your spouse and children have a safety net. On top of that, it’s an affordable tool you can use to build generational wealth that offers tax advantages.

Why Is It So Common for Generational Wealth to Be Squandered?

There are some pretty dire statistics out there about generational wealth which you’ll definitely want to familiarize yourself with. Most notable, 70% of wealthy families are estimated to lose their wealth by the second generation. Even if your kids don’t blow your fortune, there’s a 90% chance that their children will.

While an issue like this is obviously complicated, one of the most common reasons that generational wealth is squandered is that inheriting generations didn’t have to work for the wealth they have. When you build wealth that can be passed down, you likely experienced a lot of hardships along the way that required discipline, hard work, and sacrifice to overcome.

The second generation might have the opportunity to see how hard their parents worked to build wealth and, even though life was easier for them financially, were still able to understand all of the hard work and sacrifice that went into creating the family fortune. They might have grown up in a fairly frugal environment and been able to learn from their parents about making smart financial decisions.

The third generation, however, is much farther away from the hard work and struggle that it took to build the wealth they benefit from. In this situation, it’s all too easy to assume that the family coffers are a bottomless pit of gold. These people really might not have any idea how to handle money or just how much effort went into creating it in the first place.

How to Prevent the Downsides of Generational Wealth

When you aim to build generational wealth, you likely aren’t hoping that your kids will grow up spoiled, out-of-touch, and extravagant. You probably particularly don’t want them to end up in a heartbreaking riches-to-rags story that involves a life of excess that results in bankruptcy and destitution.

Luckily, it doesn’t have to be that way.

Teach Your Kids the Value of Struggle

There’s a common saying that is very appropriate to understanding how family wealth is lost only a few generations down the line. It refers to a cyclical pattern that can be broken down into four steps before looping back around to step number one:

  • Hard times create strong people
  • Strong people create good times
  • Good times create weak people
  • Weak people create hard times

Rinse, repeat.

To avoid this all-too-common sequence, you’re going to want to purposefully instill the value of struggle in your children. It’s natural to want to give your kids everything in life and never let them feel uncomfortable even for a moment. If you shield them from ever having to face hardships and struggle, though, you’re actually doing them a major disservice.

I’m not saying you need to drop your five-year-old on a desert island and send them off with just a pocket knife. Being put in a position to deal with a hardship that is too far out of your comfort zone can sometimes be just as damaging as never facing hardships at all.

The value of struggle can be learned in an incredibly diverse variety of ways– through sports, games, jobs, school, relationships, hobbies, business endeavors, and travel, just to name a few. The goal is to support or help facilitate challenging situations for your kids so that they can see the personal gain and growth that comes from struggle firsthand.

We think of struggle as negative, but it’s ultimately one of the most important ingredients to achieving personal growth and success.

“Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength.” – Arnold Schwarzenegger

If you’re not yet convinced, let’s just take a look at a handful of some of the benefits of struggling:

  • It makes you more resilient in the face of future adversity
  • It makes you more willing to try new things and take well thought out risks
  • It can make you stronger mentally, physically, emotionally, and spiritually
  • It makes you value what you’ve worked for
  • It helps you learn å
  • It helps you become independent
  • It makes you more confident
  • It improves your problem-solving skills
  • It makes you smarter
  • It builds character and helps to shape your identity

I could go on and on. While too much struggle can obviously be devastating to an individual, you might be surprised just how resilient, strong, and capable your children are in the face of challenges. When your children learn the valuable lessons of struggling, mistakes, failure, and success, you’ll find that they are much better equipped for the “real world” when it’s time for them to go off on their own.

Create Criteria That Must Be Met Before Future Generations Have Access to Wealth

If you dump a cool $20 million in cash on your kids on their eighteenth birthday, there’s a good chance you’re playing with fire. Of course, how they handle this type of situation will have a lot to do with how much personal finance education they’ve had and whether or not they understand the value of money. However, even the most responsible person can start to act erratically when they see all those zeros in their bank account.

There are a lot of different ways you can go about creating criteria future generations need to meet before they have access to wealth. Some examples include:

  • Tie wealth distributions to ages and events
  • Use incentive trusts
  • Require a financial test before distribution
  • Craft a mission statement as a family

The ability to pass money on to your children is something you should be truly proud of. That being said, it’s important that you don’t project the lessons you’ve learned onto your children and assume that they will be as diligent in building and maintaining wealth as you have been.

Of course, it’s generally not a good idea to use financial incentives to get your kids to be the way you want them to be. For example, if your kid has always wanted to run their own restaurant, it probably won’t go well if you only allow them to receive their inheritance if they graduate from medical school. You want your wealth to support future generations in their ability to achieve their goals and ambitions, not cause major personal and relationship issues in your family.

Make Your Kids Learn the Value of Money

Sure, your kids don’t have to work or pay for any of their own stuff. If you just buy them everything they want without them having to do anything for it, it’s going to be hard for them to learn the value of money.

I don’t care if you have one trillion dollars in the bank– make your kid get a regular job. Even working at the local pizza place a few hours a week can go a long way in teaching your children priceless lessons.

Beyond your kids learning that money is something you receive through offering something of value to others, it’s important to teach them that pretty much everything costs money. It isn’t enough to constantly harp on your kids about how expensive their back-to-school wardrobe was or how much you spent sending them to private school. In order for them to really learn, they’ll have to use their own hard-earned money to make some meaningful purchases.

There are a lot of different ways you can go about this. You might have your kid be responsible for saving up and buying their first car, pay for their own clothes beyond the basic essentials, or let them foot the bill when they go to the movies with their friends.

Teach Your Kids That Money Doesn’t Buy Happiness

Having financial wealth can offer a lot of opportunities in life, but it can also be a curse. Money is just a tool that can be used in positive and negative ways. At the end of the day, it’s going to be hard to prevent the downsides of generational wealth if your kids don’t understand that material objects and a luxury lifestyle don’t automatically result in a happy or satisfying life.

I’ve actually written at length about the fact that you need more than money to lead a meaningful life. Check out my article on the different types of wealth to learn more.

Generational Wealth Quotes

At this point, you’ve heard enough of what I have to say about generational wealth. Let’s check in with what some of the greatest (and, in some cases, wealthiest) minds throughout history have said about family fortunes and wealth in general.

“Wealth consists not in having great possessions, but in having few wants.” – Epictetus

“The poorest man I know is the man who has nothing but money.” – John D. Rockefeller

“We need to make a game out of earning money. There is so much good we can do with money. Without it, we are bound and shackled and our choices become limited.” — Bob Proctor 

“Someone’s sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett

"Be careful to leave your sons well instructed rather than rich, for the hopes of the instructed are better than the wealth of the ignorant.” – Epictetus

“Industry, perserverance, and frugality make fortune yield.” – Benjamin Franklin

“The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.” — Robert Kiyosaki

“The advantages of riches remains with him who procured them, not with the heir.” – Ralph Waldo Emerson

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.” – Theodore Roosevelt

“Material abundance without character is the surest way to destruction.” – Thomas Jefferson

Final Thoughts on Building Generational Wealth

Building generational wealth is within reach for anyone that is seriously invested in systematic wealth building. That being said, you will need to employ the same thoughtfulness, hard work, diligence, and planning in passing your wealth on to future generations as you did in creating that wealth in the first place.

When you create a family fortune, you are giving your descendants a tremendous gift. However, if they don’t have a good head on their shoulders in relation to money, it honestly might do more harm than good. It’s therefore essential that you help your kids learn how to create and lead meaningful lives. A part of the toolkit you’ll want to pass on to them will be a thorough education in personal finance, but that simply isn’t enough if you don’t help them learn how the value of struggle, the power of a growth-oriented mindset, and the reality that you need more than money to lead a worthwhile life.

Every week I post a new article about wealth building to share some of the valuable lessons I’ve learned over the years. You can learn more about me and my projects here.

 

According to a number of recent studies, an increase in income can actually lead to more stress and less happiness. Winning the lottery doesn’t appear to create the perfect life any more predictably than earning a higher salary, either. In fact, getting rich quick can leave people suffering from something called sudden wealth syndrome.

Before you start playing the world’s smallest violin for people out of feigned sympathy, you might want to consider the negative ways that a windfall could impact your life.

Why would someone who won a $315 million lottery have been quoted as saying “I wish that we had torn the ticket up”? The reason is that, for all the problems that money can solve, it is also very capable of creating a lot of new ones that are hard to even imagine before it happens to you.

What is Sudden Wealth Syndrome?

woman with tons of cash and sudden wealth syndrome
Sudden wealth syndrome can impact people who experience a dramatic increase in net worth in a short period of time.

Sudden wealth syndrome is a psychological condition (though not technically a psychological diagnosis) that can happen when someone comes into a large sum of money in a short period of time.

While many of us assume that having a surprise windfall would be the best thing that could ever happen, there are a number of potentially negative side effects that you should be aware of. A big influx of cash or assets can be shocking even when you’ve been expecting it, but it can really shake up your world if you had no idea that the wealth was heading your way.

When you have access to wealth all of a sudden, it can create a bunch of overwhelming pressures in your life. Even the most level-headed person can start making decisions they normally wouldn’t when their bank account blooms overnight, and it’s hard to anticipate how you would act if your net worth suddenly puts you in the “rich” category.

You might think that a ton of money is the answer to all of your problems. In reality, though, it can lead to extreme psychological outcomes like:

  • Having an identity crisis
  • Becoming isolated
  • Experiencing paranoia
  • Being in a state of shock
  • Engaging in self-destructive behaviors

Understanding sudden wealth syndrome is essential for anyone who is working to build wealth. While some people might have a hard time feeling sympathy for someone that has money to burn, you never know with certainty how you would react to a windfall unless it happened to you.

Symptoms of Sudden Wealth Syndrome

A quick trip on the rags-to-riches roller-coaster can leave you experiencing a tremendous amount of stress and other negative psychological symptoms. It’s one thing to steadily and systematically build wealth over many decades, where you have time to adjust to your increasing net worth in small bites. Of course, people who get rich slowly can certainly fall prey to the same side effects as people who receive a windfall, but it’s particularly notable when a fortune is received in a short period of time.

Whether you know an inheritance is on its way, you expect that your side hustle might blow up and make you rich, or you have no expectation of experiencing sudden wealth, it’s a good idea to familiarize yourself with the potential symptoms of sudden wealth syndrome.

Guilt

Guilt is often described as a self-conscious emotion because it involves self-reflection. In its healthiest iteration, guilt can help us learn to not repeat mistakes we’ve made. However, it’s all too common for people to feel guilty in ways that are out of proportion to the supposed error or are even completely disconnected from any actual harm to themselves or others.

This is the case with the guilt that comes along with sudden wealth syndrome.

There are a lot of reasons why you might feel guilty after a windfall. One familiar example is if you received an inheritance after the death of a loved one. This can create mixed emotions, such as feeling like you can’t be happy to have the money because that would imply that you’re glad your relative passed away.

People who come into wealth suddenly can also feel guilty because they don’t believe they deserve the money. They look around and see other people that seem to be working harder or that appear to need the money more. Why did you get rich all of a sudden, while these other people that are seemingly more worthy of a windfall have to keep struggling? This is particularly common for people who grew up poor, but it can happen to people of all tax brackets.

There’s also a pervasive cultural concept that money is bad and so are people who have it. Someone who was wandering around complaining about the 1% just a few months ago might be overcome with incredible guilt when they find themselves a lot closer to that category.

Isolation

What would you do if you found out you were about to receive an inheritance of $100k? How about $500k? What about $5 million?

Your first instinct might be to celebrate. After all, why wouldn’t you call your buddies, your parents, and your girlfriend of six months to tell them the good news? Heck, you’re rich now– it’s time to party!

Unfortunately, money can complicate even the strongest relationships, and the actual emotions you experience might be a lot different if you experienced a windfall than you think they would be.

Coming into a lot of money all of a sudden can compel people to isolate themselves from the people they know. Because getting a bunch of money can trigger a lot of self-critical emotions, you might separate yourself from others due to depressive moods or other unpleasant mental states.

If the people in your social circle aren’t well off, you might feel uncomfortable being around them with your new wealth and lifestyle. Similarly, your friends and family might create separation through envy, resentment, or jealousy.

Sudden wealth can, in short, leave you feeling really alone.

Paranoia

suddenly wealthy person looking out window
One of the symptoms of sudden wealth syndrome is paranoia.

If isolation as a symptom of sudden wealth syndrome doesn’t make you nervous, perhaps this one will. Becoming rich all of a sudden can lead to paranoia in its own right, but paranoia can also result from social isolation.

People who suffer from SWS might worry, for example, that their fortune will disappear as quickly as it showed up. They also might become paranoid in regard to their relationships. The changing dynamic of their social world can create paranoia– whether their fears are real or imagined, the newly rich person might feel that their friends and family members are always trying to get a piece of the action.

Both paranoia and isolation can lead to a number of other health issues, such as insomnia, depression, or anxiety disorders.

Shock and Uncertainty

Receiving a windfall can also leave you in a state of shock. Even if the money can seriously change your life for the better– allowing you to get out of debt, start saving for retirement, invest in new business ideas, and follow your dreams, the experience of getting a bunch of money can be shocking on just about every level.

Becoming suddenly rich can leave you feeling paralyzed. You might not have the slightest idea what to do with the money. Even the smallest spending decisions can become completely overwhelming.

Feeling numb from sudden wealth often results, at least in part, from being emotionally unprepared for all the changes that money can create. Things like the new lifestyle you can afford, increased responsibility, and the ways money changes your relationship can leave you feel shocked and dissociated.

You could also find yourself ridden with feelings of confusion and uncertainty. Regardless of how good your new wealth could be for you and your family, it’s can be downright impossible to wrap your mind around.

How you respond to a sudden fortune can depend on your background. If you grew up in a wealthy family but didn’t have access to much money until your recent windfall, you might have a place to put the experience in your mind. However, if you grew up in a family that was always living paycheck-to-paycheck, the realities of wealth might be so new and unknown that you end up resorting to self-destructive coping mechanisms.

People afflicted with SWS might start spending money excessively, make financial promises to their friends and family, or make risky investments. This, of course, can happen to people who grew up in wealthy families as well. Regardless of background, and influx of charities and other organizations giving you their attention can leave you feeling suspicious and paralyzed.

Anxiety or Panic Attacks

As you might imagine from all of the symptoms we’ve discussed so far, increased anxiety or even panic attacks can result from the sudden change of becoming wealthy. All of these potential psychological consequences of an overnight fortune are deeply interconnected and interrelated. For example, anxiety about the money vanishing could lead to social isolation and paranoia, or the shock of being rich can start making even the most level-headed person anxious.

Panic attacks occur when a person is overcome with unreasonable feelings of anxiety and fear that manifest themselves in physical symptoms like fast breathing, a racing heart, and excessive sweating. If you’re truly overwhelmed by your new wealth and don’t know what to do, you can also find yourself experiencing these intense waves of fear.

“Ticker Shock”

A play on the phrase sticker shock, ticker shock refers to a state where a person watches the stock market obsessively and experiences cycles of anxiety and depression in response to market volatility. If you invested your windfall in the stock market (or made your money that way,) it’s a little too easy to be constantly checking in on your investments.

No matter how much money you have, it’s important to never exceed your risk tolerance when investing. If you invest money that you can’t afford to lose, you’ll find yourself flinching every time there’s a slight dip in the market.

Sleep Problems

All of these other symptoms can leave you suffering from insomnia or other sleep problems. You’d think that being rich would mean you can sleep like a baby every night, but all of the new responsibilities and other related issues can leave you staring at the ceiling until the wee hours of the morning.

Identity Confusion

scrabble tiles illustrating identidy confusion of suddenly wealthy
Being rich all of a sudden can put people's sense of identity into quesiton.

One of the most drastic symptoms of sudden wealth syndrome is the potential it creates for an identity crisis.

I dealt with this myself when I went from being broke and in debt to a multi-millionaire over the course of eighteen months. Even though I’d been putting my all into the projects I was working on, I was left in a state of deep confusion about who I was when one of them actually panned out in a big way.

While we might not realize it, we tend to factor our financial situation into our sense of identity. On top of that, humans typically settle into a comfort zone where they can feel in control and everything is familiar.

When you get rich quickly, it can make you question who you are and what matters to you. If it was a part of your identity that you’re working class, for example, what does it mean about who you are when your bank account says otherwise?

Even though everyone thinks they want more money than they have, having your net worth skyrocket can put you way out of your comfort zone. This can be incredibly stressful, confusing, and overwhelming.

Depression

suddenly wealthy person depressed
We all know that money doesn't buy happiness, but you might not realize that it can actually leave you feeling depressed.

You might think that you’d be clicking your heels and shouting from the rooftops if you got news of a $10 million inheritance, but it’s actually not that uncommon for sudden wealth to leave people with feelings of depression.

This might appear on its own or it can result from guilt, isolation, paranoia, anxiety, or any of the other symptoms of SWS.

We’ll talk about why rich people can get depressed a little later in the article. But, in short, receiving a ton of money can actually leave people feeling empty and low energy. This might be for a number of reasons, including the realization that money simply can’t fix all your problems or provide meaning in life on its own.

Negative Impact on Relationships

Money can make people start acting strange. Even if you manage to keep your cool after striking it rich, unfortunately, your friends, family, and coworkers might not be as emotionally mature.

Sudden wealth can make you isolate yourself from others, make others isolate themselves from you, or both. You might find your best friend is all of a sudden so envious of you that your relationship falls apart. Your mother might demand that you give her a chunk of your winnings. Childhood friends can start coming out of the woodwork with sob stories about medical bills and sick kids.

It really is sad but true. The reality is that an experience like this can teach you who your true friends are. That can be a pretty hard pill to swallow if you come to find that you have a lot fewer friends than you used to think.

Similarly, it can make you suspect of every new person you meet. This is particularly the case if your wealth is known to the general public.

Let’s say, for example, that you made a killing trading crypto. You didn’t think to hide this about yourself, and you jumped at the opportunity to be interviewed about your new fortune for stories that appear in  the Wall Street Journal, Buzzfeed, and on NPR. In your hometown, news travels fast and everyone from your high school drama teacher to your middle school girlfriend now knows that you’re a multi-millionaire.

Maybe the attention feels good for a while, but chances are you’ll start wondering whether your popularity is resulting from the fact that everyone is hoping for a handout. You might get tangled up in the dangerous gray area between reasonable and unreasonable paranoia.

As you can see, there are a lot of ways that getting wealthy can mess up the relationships you already have in life and jeopardize your ability to make new relationships in the future.

How Does Someone Become Suddenly Wealthy?

So, now that we know what can happen to people who become suddenly wealthy, let’s take a look at some of the most common ways that a regular Joe can find themselves with deep pockets practically overnight. Remember, there are many types of wealth, but the type we're talking about here is purely financial wealth.

Inheritance

Even if you know that an inheritance is coming down the road, it can still be hard to grasp how it’s going to change your life if you don’t consider it carefully ahead of time. Sometimes, individuals might receive news of an inheritance that they had no idea about, which makes them ripe candidates for the symptoms of SWS.

Winning the Lottery

People talk about winning the lottery as if it would solve all of their problems and change their lives for the better. However, the actual experience can be so shocking for a person that is unprepared for wealth that it can lead to a number of horrible consequences.

There are a lot of examples of lottery winners whose lives seemed to take a turn for the worse as soon as they became rich.

Take Billy Bob Harrell Jr., for example. He won $31 million dollars from the Texas Jackpot after unsuccessfully attempting to become a minister. With his winnings, he helped out his family, his church, and his parishioners. No matter how much money he gave, though, people always seemed to be asking for more.

His family life fell apart as well, with the constant demands plus some bad investments eventually leading to divorce and general family turmoil.

“Winning the lottery was the worst thing that ever happened to me.” – Billy Bob Harrell Jr.

Sadly, less than two years after Harrell had become a multi-millionaire, he committed suicide.

You can spend hours going down the rabbit hole of the sometimes tragic lives of lottery winners. If you’re interested in learning more about how destructive sudden wealth syndrome can be, there are, unfortunately, countless extreme examples out there.

Huge, Sudden Income Increase

The median salary for all NFL players is $860,000, which is a pretty healthy income if you ask me. For the biggest names in the game, players can receive contracts that include yearly salaries in the tens of millions of dollars.

You’d expect that, from these numbers, NFL players would be set for life.

However, statistics suggest that, within just two years of retirement, 78% of NFL players fall into severe financial distress or go bankrupt.

You can find examples of this same type of situation in the world of celebrity as a whole. People as rich and successful as Michael Jackson, Nicolas Cage, Mike Tyson, and Kim Basinger have had to file for bankruptcy.

When people start making huge amounts of money every year, it can leave them with the expectation that their bank account is bottomless. They can lose site of smart money management and fall into self-destructive (and sometimes very expensive) habits.

Gambling

Other types of gambling beyond playing the lottery can also leave people with more money than they know what to do with. This is also a particularly dangerous way to become suddenly wealthy, because people can end up putting their money back into games where the odds are against them.

Settlement From a Lawsuit

Sometimes people can end up with a big chunk of cash if they’ve sued someone for medical malpractice, wrongful death, or some other legal proceeding. Unfortunately, a lot of people aren’t aware of the necessary steps that should be taken to manage and protect wealth, and suffer from the symptoms of sudden wealth syndrome when they get a big payout from a lawsuit.

Trading Stocks and Cryptocurrency

Whether you take investing very seriously or you engage in r/wallstreetbets style gambling, having a big win in the stock market or crypto can change your life incredibly fast. Take a look at this story from the New York Post, for example, about people who’re rich thanks to crypto. While I hope everything works out for these new millionaires, getting rich from crypto or stocks doesn’t always go well in the long run.

How to Avoid Sudden Wealth Syndrome

Of course, the symptoms of sudden wealth syndrome shouldn’t be enough to keep you from trying to systematically build wealth. However, you should learn how to avoid SWS so you don’t become another tragic story recounted on a blog.

Slow Down

If you come into a bunch of money, the first thing you should do is nothing.

Before you buy a new house, pay off your parents debt, or put it all into a risky investment, slow down. I mean way down.

The most important thing is to avoid making quick decisions. All those zeroes can do weird things to your brain, and even the most level-headed person can start acting erratically with new-found wealth. Put the money somewhere safe (like an insured savings account, for example) and don’t touch it until you’ve created a solid plan.

Keep It Quiet

I get it. You’ve struck it rich and you want to tell everyone you know. It’s essential that you resist this urge and keep it to yourself as much as possible.

If you don’t, your friends, family, and colleagues might start acting differently when they learn you’re rich. Whether they’re giving you investing tips, asking for money, or just acting strange, letting people know about your wealth can cause a lot of problems. If you do tell the people in your inner circle about your windfall, make sure you can trust them and be sure to set clear boundaries.

Instead of telling your coworkers about your major gains, talk to an experienced financial planner. They’ll help you make a plan that protects your wealth.

To learn more about how to keep your wealth a secret, check out this article on stealth wealth.

Make a Plan

Sometimes you can’t plan ahead for sudden wealth, but in other instances, (like an inheritance you know about,) you can. Regardless of whether or not you were able to prepare for your fortune, if you slow down and keep it quiet, you can make a plan with the help of a financial advisor.

Make sure you are keeping the big picture in mind when you make a long-term plan. Your windfall could change your life for the better if you’re smart about it, but it could also vanish if you have too narrow of a focus on how the money changes your life right now.

Stay Disciplined

Discipline is key for navigating the obstacles of sudden wealth. Work on being self-aware (i.e. keep an eye on ideas that crop up about impulsive purchases or risky investments) and don’t do anything until you make a solid plan.

Once you create a plan, trust it. Don’t stray from it unless you have a very good reason to and it supports your long-term purposes.

Stay Away From Investments You Don’t Understand

This one is simple. If you get a windfall and you don’t have any experience as an investor, now isn’t the time to learn just how risky it can be. Don’t let your coworker talk you into putting your money into the latest meme stock– while it could work out, it could also leave you right back where you started.

Don’t Forget About Taxes

Depending on how you made your money, you’re likely going to need to give some of it to Uncle Sam. You’ll want to learn about how your new fortune will be taxed so you can make sure you can foot the bill when it comes time to pay.

Educate Yourself About Personal Finance Ahead of Time

Regardless of whether or not you ever strike it rich overnight, educating yourself about personal finance is never a bad idea. The more you know about managing money, the more prepared you’ll be if you end up with a ton of it.

Why Are Some Rich People Depressed?

When you don’t have any money, it can feel like being rich would make all your troubles go away. If that was really the case, though, why are some rich people depressed?

There are a lot of different reasons for this, but a big one is that money is just a means and not an end in itself. While it can seriously expand your options in life, money alone won’t make life meaningful.

Having money can also lead you to:

  • Lose trust in other people
  • Isolate yourself socially
  • Feel like there aren’t many people you can relate to
  • Make you suspicious of why others want to know you

Being rich can also leave people struggling with boredom and purposelessness. A regular person doesn’t have to question why they get out of bed and go to work in the morning– they have to in order to support themselves. For multi-millionaires or billionaires, though, motivation and purpose is necessary beyond putting food on the table.

Even though being short on cash can create a lot of tension in the family, having a high net worth isn’t necessarily a walk in the park either. Building generational wealth can be a blessing or a curse depending on how you navigate the situation, and the family turmoil it can lead to can certainly contribute to depression and other mood issues.

Then there’s also the treadmill effect to consider. Some people get caught in a cycle where the more the make, the more they spend. They are victims of lifestyle creep and rather than money being the solution to all their problems, it actually leaves them with a more complicated life.

A few of the other reasons that rich people can be depressed include:

  • In some cases, the more money people make the more they have to work to maintain lifestyle, status, etc., and the competition of keeping up can be exhausting
  • For some people working all the time doesn’t let them slow down and appreciate life, even if they don’t work they might not know how to appreciate the simple things because of a fixation on consumerism and a luxury lifestyle
  • Their sense of self worth might be tied to their networth/business, if something goes wrong it can lead to a crisis
  • Rich people can be less resilient if they haven’t struggled to get to where they are

What is Wealth Guilt?

Wealth guilt can come in a number of different forms. These include:

  • Feeling like you don’t deserve your wealth compared to others around you
  • Feeling guilty about getting an inheritance due to the death of a family member
  • Feeling guilty about being seen as privileged
  • Feeling guilty when you have money and other people around you don’t
  • Feeling ashamed of being able to afford things other people can't

How to Manage Sudden Wealth

If you receive a windfall, you don’t have to fall prey to Sudden Wealth Syndrome. Here are some tips to help stay stable, sane, happy, and healthy in the face of sudden wealth:

  • Hire a CPA to plan for your taxes and put the taxes you owe into in savings account
  • Pay off your home, cars, and any personal loans
  • Stick with index funds for most of your wealth
  • Put some of your wealth into cash-flowing real estate

Getting rich quickly can be really overwhelming, and I know that from first hand experience. If your net worth has dramatically increased and you’re feeling like you’re in over your head, feel free to reach out and I’d be happy to give you some pointers. Don’t worry, I don’t have an angle here and I’m not trying to sell you anything. I’m just all too aware of how isolating it can feel to jump up a few tax brackets practically overnight.

Conclusion

Simply understanding the potential pitfalls of sudden wealth can go a long way in avoiding the risks associated with a windfall. I feel motivated to share what I’ve learned over the years in the hopes that others will be able to avoid the mistakes that I made along the way.

Who am I to be telling you how to deal with a big influx of cash, anyway? You can learn more about me and my projects here.

When you’re dreaming of getting rich, it’s easy to overlook the downsides of having money. One major risk of having a high net worth is that, once people know you’ve got money in the bank, they’ll try and take it from you. For this reason, wealth protection strategies are essential for anyone who is practicing systematic wealth building.

Are you wondering how to protect your wealth from lawsuits and predators? Are you concerned that once you finally “make it,” you won’t ever be able to relax and fully enjoy the fruits of your labor?

Don’t worry. It really is possible to be rich and have peace of mind. To do so, you’ll likely use a collection of wealth protection strategies to reduce the risk of being sued, having your income stream dry up, or otherwise having your assets dramatically drop in value.

At the end of the day, the more assets you have, the more strategic you’ll have to be to protect what is yours. Let’s dive in and take a look at what I’ve learned over the years about the best ways to protect wealth.

What is Asset Protection?

bank safe representing wealth protection strategies
Asset protection is an essential component of financial planning to protect you from creditors, lawsuits, and more.

Asset protection refers to various strategies you can adopt to protect your wealth and property from creditors, lawsuits, and predators. You can practice asset protection strategies both at the individual level and for any business entities you operate.

If you’re new to the world of asset protection, the whole thing might sound paranoid to you. After all, who’s going to try and take your money?

Unfortunately, the more wealth you have, the more you can expect that others will try and get a piece of the action. Asset protection should be an essential tool in everyone’s financial planning. When you practice asset protection, you can enjoy the benefits of:

  • Reducing the risk of being the target of lawsuits
  • Increasing your overall financial security
  • Protecting you from the debts and liabilities of your businesses
  • Ensuring business continuity
  • Allowing you to set and meet financial goals for your family
  • Letting you have peace of mind knowing that your wealth is protected

You might think that asset protection strategies are only for the mega-rich. Honestly, though, if you have any assets to your name and plan on building wealth over time, it’s never too soon to start protecting your wealth.

Why Is Your Wealth at Risk?

protecting wealth from financial vultures
Sadly, when people know you have money, some of them will turn into financial vultures and try to grab some of the scraps of your fortune.

Before we get into the specifics of how to protect your wealth, let’s start with why your wealth is at risk in the first place. I want to mention first and foremost that you should not assume that you are safe from lawsuits and accusations against you because you do everything by the book and aren’t engaged in any shady business. The reality is that people can and do make frivolous, baseless lawsuits. Even if they won’t win, it can still cost you a lot in legal fees, time, bad press, and stress.

Professional Liability

If you’re a business owner, you probably already know that there are potential pitfalls and risks just about everywhere you turn. That being said, let's take a look at some of the risks you face when you operate and own your company or work as a business professional:

  • Malpractice claims
  • Sexual harassment accusations
  • Trademark infringement lawsuits
  • Faulty product suits
  • Employment discrimination
  • Work-related accidents
  • Breach of contract claims

Again, you don’t have to actually be at fault for predatory people to make these sorts of claims against you. If you don’t have your business and personal finances separated, you might find that your personal assets are at stake when someone comes after you professionally.

Personal Liability

vehicle accident personal liability wealth protection
Without the right wealth protection strategies, your fortune could be at risk every time you do something as simple as driving into a car.

Even if you’re retired or generally not concerned about your professional liability, you’ll still want to consider the ways that your personal wealth is at risk:

  • Vehicle accidents
  • Divorce
  • Employee actions if you don’t take steps to separate business debts and personal assets
  • Vicarious liability
  • Social host liability
  • Foreclosure
  • Medical issues
  • Debt

I’ve said it before, but it’s worth repeating: the more money you have, the more likely it is that predatory people will try and take it from you. The scent of money can make people do strange things, and the apologetic person that was obviously at fault in a car accident might start to sing a different tune when they realize who you are or how rich you are. You can’t necessarily completely avoid these risks in life, but you can set yourself up with wealth protection strategies that make it so your money isn’t unguarded from opportunistic parties.

Wealth Protection Strategies

Now that we’ve looked at why you need to protect your wealth, let’s dig in to the how.

I'm a big believer in the fact that, while money is an incredibly powerful tool, it isn't the only thing that matters. Check out my complete guide to the different types of wealth you need for a meaningful and fulfilling life.

Don’t Own Anything in Your Name

john d rockefeller wealth protection
To protect your wealth, follow the advice of John D. Rockefeller: don't own anything in your name.

John D. Rockefeller once famously gave the advice that you should “Own nothing. Control everything.” This is an oft repeated quote in the world of asset protection and the offshore industry, promoting the idea that no one can take something from you if you don’t own it.

While it might make the purchasing process a bit more complicated, ensuring that none of your assets are owned in your name can provide serious wealth protection. You also might choose to retitle the assets you already own so that they can’t be taken from you in the case of a legal dispute. Some people also choose (in certain states where it’s advantageous to do so) to title their assets as tenants-by-the-entirety with a spouse.

Depending on the state you live in, your home equity might be safe from creditors through homestead protection. However, how much protection you really have is going to vary a great deal depending on which state you’re in.

There isn’t one go-to strategy for avoiding owning your assets outright in your own name. Here are some of the ways that wealthy people control their assets without technically owning them:

  • Vehicles– LLCs or trusts
  • Real estate– land trusts
  • Business– LLCs or corporations

An additional benefit of avoiding owning anything in your own name is the anonymity it provides. If you purchase property with a trust or an LLC, (which, by the way, is definitely more complicated and involved than buying a house as an individual,) you don’t have to worry about the fact that your family’s home address is a part of the public record.

Use LLCs

Are you an entrepreneur?

If so, you’ll definitely want to separate your personal assets from the assets, debts, and liabilities of your business sooner rather than later. LLCs are a popular method for a number of reasons, one of the primary of which is that creditors can’t go after an LLC owner’s personal assets in the event of the company going under or a lawsuit. Unless you act in a way that leaves a court feeling justified to pierce the corporate veil, the only assets at risk if your business is sued or creditors pursue it are those that are invested in the business itself.

Use a Trust

Depending on the state you live in, you might be able to put some of your assets into a trust that creditors can’t access. However, this isn’t something you should try and start doing when you feel like a lawsuit is imminent. Creating trusts for your assets is something that you’ll want to do years in advance of any judgments or unpaid debts.

There are a lot of different types of trusts out there, and determining which ones are right for you should be a part of your larger estate planning efforts. Some of the types of trusts that might be applicable in your asset protection include:

  • Asset protection trusts help to shield your assets from creditors if you default on a debt or file for bankruptcy
  • Land trusts to help create liability and privacy protections for landowners
  • Irrevocable trusts to protect your assets from lawsuits and creditors while also reducing your estate taxes
  • Spendthrift trusts to protect your beneficiary’s personal assets and help ensure your savings last once you’ve passed away
  • Charitable trusts to donate money when you pass away in a tax-efficient manner
  • Domestic asset protection trusts to protect the assets of the trust from creditors, fund the trust with your own property, and maintain an interest in the trust
  • Spousal lifetime access trusts to give your spouse access to assets that are protected by creditors

In any case, I could go on. The short story is that trusts can be a valuable tool in your asset protection strategy, but they’re also pretty complicated and not something to mess around with lightly. It’s generally a good idea to work with a knowledgeable attorney who can make recommendations based on your specific circumstances.

Use Lots of Insurance

When the name of the game is asset protection, your arsenal should be loaded with insurance, insurance, and more insurance. This is the first line of defense against liability, so this isn’t where you want to try and cut corners.

You should periodically make sure that your policy limits are in line with your current net worth and assets for insurance to serve as an effective method of asset protection. Depending on your situation, here are some of the types of insurance you might want to have protecting you at all times:

  • Professional Liability insurance
  • Business liability insurance
  • Directors and officers insurance
  • Property insurance
  • Personal liability insurance
  • Umbrella insurance

It’s also worth understanding deposit and securities insurance. For example, up to $250,000 per depositor, per bank, and per “ownership category” is insured by the Federal Deposit Insurance Corporation (FDIC) for member banks. Using this in your favor can ensure that your money in individual accounts, joint accounts, trust accounts, IRAs, and more is protected to the fullest extent.

Diversify Your Investments

No matter what you’re investing in, it’s never possible to completely avoid risk. After all, even if you hide your money under the mattress, it’s just going to get demolished by inflation over time.

That being said, there are ways you can significantly reduce your risk when investing. One of the common tactics used to help preserve your capital is by diversifying your investments.

The more diversified your investments are, the less impacted your portfolio will be by market anomalies. To protect your assets from unexpected events, some of the asset classes you might consider investing in (after thorough due diligence, of course,) include:

  • Stocks/equities
  • Bonds
  • Savings accounts
  • Certificates of deposits
  • Annuities
  • Real estate (including investment property, REITs, REIGs, etc.)
  • Small business/angel investing
  • Peer-to-peer lending
  • Crypto
  • Safe-haven assets (gold and other precious metals, cash, defensive stocks, T-bills, etc.)

In short, you want to invest in several different asset classes and sectors that typically react differently to various types of events. If you’re not diversified, you might not even realize how much risk you’re taking on until something catastrophic wipes out your principal. For example, imagine if you were months away from retirement with all of your capital invested in tech stocks when the dot-com bubble burst. Ouch.

Diversify Your Business Income

Another important step you can take to protect your wealth is to diversify your business income. As they say, don’t put all your eggs in one basket.

If you have a stable, high-income W-2 job, you might think this doesn’t apply to you. However, diversifying your business income is just as important for 9-5 workers as it is for entrepreneurs.

When you have several different sources of income, it can act as a hedge against income loss, provide stability, and help you systematically build wealth. In these arguably uncertain economic times, having several different irons in the fire can also help to keep you financially agile.

If something catastrophic happens, diversifying your income can mean you don’t have to go down with the ship. If everything continues chugging along as planned, having several sources of income can have a huge impact on your ability to build wealth and fund your retirement.

Diversifying your income is an important strategy that keeps the long-game in mind. Even the most successful companies can lose relevancy and go under, and even the healthiest income streams can dry up over time.

Lastly, having a number of different sources of income can help keep life interesting! It can keep you on your toes, keep you engaged, and help avoid the all-to-common disease of complacency.

Diversify Your Skills

Related to the need to diversify your business income, diversifying your skills can also go a long way in protecting your wealth.

In Stoic philosophy, one of the main principles is that some things in life are in your control and some things aren’t. Your main task is to distinguish the difference between these two camps. Once you’ve done that, you can work to accept the things you can’t control and focus your energy towards the things that you can control.

Unless you are one of the elite group of people in the world that have the power to directly affect change at a global scale, you likely can’t control what happens economically, politically, or geopolitically. You don’t have the power to start wars or end wars and you don’t have the power to impact the housing market in a meaningful way.

What you can control, though, is what you do. You can control the skills you choose to master.

When you have a diversity of skills, it means that you are all the more able to pivot in the face of unexpected life events or global occurrences. Mastering a variety of skills doesn’t just mean you might have the right skills to call upon in the face of a crisis, but it also means you’ll be more equipped to gain new skills when necessary. If you are constantly pushing yourself to travel beyond your comfort zone and learn new things, you’ll be able to hop back on your horse a lot faster when you get knocked off.

If you’re not convinced yet, let me also just say that building a diversity of skills also helps to keep you engaged and fully alive. It’s easy to go to your 9-5 everyday and let the days slip by without ever pushing yourself to become more. When you invest in your skills, you’ll find it helps to produce a zest for life you might have thought automatically disappears once you reach adulthood.

Learn Legal Aggression

As you start building your net worth, one thing you’ll want to understand is that the odds of getting hit with lawsuits starts increasing exponentially the more money you have. If it’s common knowledge that you’re doing well financially, the sad reality is that there’s a good chance people will start coming out of the woodwork to try and get a piece of the action.

Don’t assume that you can avoid this outcome by obsessively doing everything by the books, being incredibly charitable with your wealth, and never uttering a harsh word to another soul. It is not beyond predatory people to make frivolous, baseless lawsuits against someone they know has some money in the bank.

For this reason, you’ll want to build an aggressive team that you can call upon at any time to vigorously defend your interests. If someone files a lawsuit against you, no matter how vulnerable you are in reality, you should never be afraid to bristle when someone threatens legal action against you.

In fact, the more vulnerable you are, the more you should fight to look less vulnerable. When someone is threatening to sue you, they are declaring war. In these instances, you’ll want to follow the advice outlined in one of the most influential strategy texts of all time, the Art of War:

“All warfare is based on deception. Hence, when we are able to attack, we must seem unable; when using our forces, we must appear inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near.” - Sun Tzu

This isn’t the time to play nice– the more aggressive you are against legal attacks, the clearer you make it that you’re willing to put up a fight. Lawsuits are expensive, and when you start beating your chest like a silverback (metaphorically, of course), it makes it clear that it’s going to be costly to try and take you down.

The goal here is to never appear vulnerable. Asset protection can go a long way in creating that appearance. If you have bombproof asset protection strategies in place (like utilizing management companies to keep your holding companies cash free, avoiding owning anything in your name, and being willing to contest every tiny legal detail,) lawyers will see that the legal battle likely isn’t worth fighting. Through aggressive asset protection and an even more aggressive legal stance, you can swat away anyone that even thinks about opportunistically taking your money.

Paper Everything: Use Contracts

It would be nice if we lived in a world where you could run around making verbal contracts and assume everything will work out alright. In reality, approaching life, business, and other people that way is probably going to burn you pretty quick.

If you’re constantly saying “I’ll take your word for it,” you’ll learn this the hard way. If you’d like to avoid this, always act from the assumption that it’s best to get everything in writing.

You likely understand the importance of contracts when it comes to business deals, real estate deals, and legal matters. (If you don’t, now is the time to start.) But getting everything in writing can also refer to things that you might not think are that important. Creating a paper trail helps to provide certainty in just about every situation for everyone involved, even if you’re not worried about there being any malicious intent.

Use Prenups

Prenups often get a bad rap, but they are an absolutely essential tool for anyone that wants to protect their wealth. When you and your soon-to-be spouse create a thoughtful prenup together, it can help to protect both of your interests in the case of separation, divorce, or death.

However, a prenup really isn’t just a laundry list of who gets what if the marriage doesn’t work out. It can also be a way for you and your fiance to create a financial plan for married life that will actually help to avoid arguments over money and finances down the road. On top of that, it can be an important exercise before marriage to make sure that the two of you are fundamentally on the same page when it comes to wealth building and protection.

In the event that you and your spouse get divorced or one of you passes away, a prenup is a document that lets the two of you stay in control of what happens to your assets. This can save a lot of headache, drama, and stress down the road. In general, you’ll be in a much better position to make level-headed decisions about asset distribution when you aren’t actively embroiled in a divorce or grieving the death of a spouse.

Build More Wealth

You might not like this one, but the reality is that one of the best ways you can protect your wealth is by building more. Though it’s not the cheeriest news, the truth is that the more you earn, the more you can afford to pay for safety. This is an inherent part of living in a scarce-resource universe– resources allow you to have more options and more security, regardless of whether you’re talking about financial, personal, or political resources.

The more wealth you have, the more peace of mind you can buy. If you’ve ever stressed about money– and let’s be real, we all have– you know just how priceless the ability to relax really is.

On top of that, building more wealth is the most reliable path to having the freedom over what you do. The more money you have, the more ability you have to protect the most valuable asset to your name: your time.

The point of getting rich isn’t so you can spend your days cackling and counting your cash. The point is to allow you to engage with life in meaningful, purpose-driven ways. If you’ve ever lived paycheck to paycheck, you know just how impossible it can be to pursue your life goals when you’re scraping together pennies to fix your car or pay your rent.

Keep Your Wealth a Secret

What’s one of the best ways that you can protect your wealth from lawsuits and predators? Easy. Don’t let anyone know you’re rich.

For an in depth look at the concept of keeping your wealth a secret, check out my article on stealth wealth here. There are a lot of benefits to practicing a stealth wealth lifestyle, one of which is helping you avoid frivolous, baseless lawsuits from people who have nothing better to do than try and take your money.

When you don’t advertise that you’re wealthy through your home, car, clothes, and Instagram account, opportunistic predators will look right past you. Similarly, you can avoid the whole uncomfortable experience of second-cousins-once-removed and friends from the second grade calling up out of the blue to see if they can squeeze you for some cash.

Asset Protection Is Essential to Your Financial Security and Peace of Mind

While researching and putting in place asset protection strategies might not be everyone's idea of a good time, it’s absolutely essential to hedging against future financial disaster. On top of that, you’ll find that once you know your wealth is protected, you sleep a lot better at night.

If you’re as passionate about wealth building as I am, you’re likely also passionate about protecting your wealth from lawsuits, predators, and unexpected events of any kind.

Are you wondering why you should take my advice when it comes to something as important as asset and wealth protection strategies? You can learn more about me and my projects here.

If you crack open the dictionary to the word wealth, you’ll find definitions along the lines of “an abundance of valuable possessions or money.” Most of us strive to build material wealth, but, in reality, you need more than money to be fulfilled in life. There are a lot of different types of wealth, and only focusing on financial success can leave you lopsided, unhappy, and unhealthy.

Just to make myself clear: I believe that everyone would benefit from systematic wealth building. At the same time, I absolutely despise the culture of debt-fueled consumerism.

If you’re able to break free from the societally-sanctioned expectations of mindless purchasing and lifestyle creep, building wealth can be an incredible tool that allows you to live a productive and meaningful life.

So, what does it really mean to be wealthy? What does it look like to live an abundant life without getting caught in the endless cycle of consumerism? What types of wealth exist beyond monetary and material accumulation?

In this article, I’m going to break down my view of the necessary ingredients to live a comfortable, healthy, sustainable, and fulfilling life. If you find that you might be lacking in some of these areas, don’t despair. Every single one of these types of wealth is completely attainable if you are willing to commit some time every day to personal growth and development.

In this article, we're going to review the different types of wealth:

Material Wealth

When you think about being wealthy, there’s a good chance the first thing that comes to mind is material wealth. This might conjure images of Lambos, elaborate mansions, and luxury vacations, but being materially wealthy does not necessarily need to mean that you are making extravagant purchases or even living a particularly glamorous lifestyle.

It can be tempting to try and “get rich quick,” and there are plenty of people out there that will gladly sell you their info products with the promise that they will tell you how to do so. While some people might get lucky, your best bet is to become increasingly financially literate and have the right mental framework. Money management is an essential tool in being financially wealthy, but an equally important part of building wealth is recognizing that consumerism is the ultimate scam.

Being rich does not have to be about indulging in every last tech gadget or spending your evenings dining at overpriced trendy restaurants. Consumerism is arguably the number one most societally acceptable addiction, and buying stuff will simply never fill the empty space in your soul.

What will fill your soul, you ask? Being productive. Engaging in meaningful activities. Identifying your purpose in life and pursuing it. Spending time with the people you love.

So why bother building material wealth if you aren’t going to spend it on all that fun new stuff? What’s the point of being rich if you can’t use it to show everyone how successful you are?

Because money is a tool that gives you access to one of the most valuable assets you have: time. What if you created stable passive income streams for yourself that allowed you to go to your kid’s soccer games, spend time with your spouse, and take the weekend to go camping and immerse yourself in nature?

What if you were financially wealthy enough to write a book that you think will help other people improve their lives? What if, instead of being caught in an endless wheel of money-in, money-out, you were able to give back to society in a productive way that really did make a difference in the world?

Sure, there are many well-known figures through history that rejected wealth and possessions and gave their lives to a cause greater than themselves. However, for most of us, being poor is the ultimate thief of time.

If you’ve ever lived paycheck to paycheck, you know that when you aren’t working, your time isn’t really even yours to enjoy. If you aren’t busy trying to figure out how to scrape together some extra dollars for that surprisingly high utility bill, you’re frequently burning your time and energy being worried about money in general.

In my view, material wealth is not in itself a goal. Instead, it is a powerful tool that can allow you to pursue a meaningful and productive life.

Health Wealth

weights to improve health
Material wealth isn't worth much if you don't build a foundation of health wealth for it to stand on.

One of the most precious types of wealth we can possess as humans is health wealth. Even if you were naturally physically fit and healthy as a teenager despite being inactive and eating poorly, you’ll soon learn (if you haven’t already) that this is typically not a gift that keeps on giving.

Anyone who knows me knows that I try to lift weights and spend some time doing boxing and MMA training every morning. I work closely with a personal trainer and we lift together for 1.5 hours in my home gym. It completely sets the tone for the rest of the day, helps me emotionally, and gives me clarity of thought and focus for my time working on my businesses.

Later on, we’ll talk about emotional health, which is equally important as physical health. In this section, though, we’ll discuss how important it is to keep your body in good shape in order to live a wealthy life. Just like Emerson said, “the first wealth is health.”

If you aren’t taking care of yourself physically, though, you are going to struggle to build any of the other types of wealth on our list.

This is a foundational type of wealth, and we all know that you should build your house on stone, not sand.

So what does it mean to have health wealth rather than health poverty?

Health wealth means that you treat your physical body with compassion and respect. You get regular exercise, you eat nourishing food, you drink plenty of water, and you don’t deprive yourself of sleep. You get outside in nature and let the sunlight hit your skin rather than spending all of your time in some dark nook staring at a computer screen. You understand how important it is to maintain a healthy posture, particularly if you spend a lot of time sitting at a desk. Ultimately, creating a fortune in regards to your health means that you understand that your physical body is the vessel that will help you fulfill your purposes in life, and the better shape you’re in, the better able you’ll be to reach your goals.

Of course, it’s worth noting that sometimes our health is out of our hands. You can certainly do everything you’re supposed to do and still end up stunned in a doctor’s office after receiving news of cancer or some other terrible disease.

In general, though, treating your body well can help to reduce the risk of disease, improve your cognitive health and mood, reduce your stress levels, keep you feeling fit, and ultimately make life feel a whole lot easier.

Taking care of your health and building health wealth isn’t something that you can create overnight, much like the other types of wealth on our list. You create health wealth little by little, every day. It doesn’t come with becoming addicted to exercise or obsessing over never eating an ounce of fat, nor does it come from complete gluttony and over-indulgence. Becoming rich in health is a balance you work to obtain every day that stems from self-respect and the desire to lead your best life.

Spiritual Wealth

Spiritually wealthy man standing on mountain top with arms open
Connecting with something larger than yourself can help you forge a meaningful path in life.

If you’re like a lot of Americans, you probably think that spiritual wealth is an oxymoron. For fairly understandable reasons, we seem to have a cultural conception that you can be spiritual and poor or materialistic and rich, but you definitely can’t be a spiritual and rich person.

Luckily, this simply isn’t true. You can be both spiritually wealthy and financially wealthy. In fact, the two different forms of wealth can have an intricately intertwined relationship where they support one another.

According to one study from Baylor University, entrepreneurs are more likely to believe that God is personally responsive to them. They also pray more frequently than non-entrepreneurs.

This is a classic example of people having spiritual wealth that directly impacts their financial wealth. After all, when you believe in something larger than you, it’s a lot easier to connect with the notion of having a purpose in life and working towards it.

Having a spiritual fortune inside you doesn’t mean you have to live in a cave carved into the side of a mountain with only a lantern, a knife, and a small clay pot to your name. In fact, if you can manage to build financial wealth without falling prey to the temptation of consumerism, being rich can help give you the headspace and time to really focus on your spiritual growth.

Spirituality is one of those words that’s gotten a little slippery over the years, and it’s definitely going to mean different things to different people. If you’re a materialist, (in the philosophical sense,) perhaps this all sounds like a bunch of hogwash to you. It seems clear to me, though, that there is something deeper going on in life than just “wake up, eat, work, sleep, repeat” that is worth connecting with.

Whether or not you believe in God or deities of any kind, there is a lot to be gained from building your spiritual wealth. This might include:

  • Contemplating the meaning of life and what happens after death
  • Feeling wonder and awe at nature and the universe
  • Seeking purpose and meaning in life
  • Experiencing feelings of interconnectedness with other people and animals
  • Searching for happiness beyond money and material possessions

There are countless potential benefits to incorporating a spiritual perspective into your daily life. Studies have found that people who are spiritual or religious tend to live longer, have stronger immune systems, experience better emotional states, and have a reduced risk of disease. It also often comes along with a strong social support system as well as improved fitness and self-confidence.

In short, spiritual wealth can contribute to your health wealth, emotional wealth, and friendship wealth. When you’re spiritually impoverished, it can mean that you’re making nihilistic life choices, not treating yourself and others with the compassion you deserve, and ultimately not viewing life from a perspective of abundance.

Time Wealth

Time is money. Time wealth is one of the original reasons I became an entrepreneur in my teenage years. I wanted the freedom to travel, to explore new hobbies, to learn every day at my own pace - I wanted freedom. And time is freedom.

One of the most often overlooked types of wealth is time wealth. Remember, you can always make more money, but you can’t ever make more time.

When you are time rich, you have the freedom to choose how you spend your time and where you spend your time. There are a lot of people that focus primarily on material wealth and fail to recognize just how valuable it is to have ownership over your time. After all, is it really that great to be making $500k a year if it means you’re regularly working 80+ hours a week and otherwise always thinking about your work when you’re not there? Is it really worth it to build up a fatty investment account if it comes at the cost of being able to do what you want when you want?

You need more than money. You need time, too. In fact, you should look for ways to trade any extra money you have for more time.

Of course, I’m not saying that you should never do anything productive and spend all of your time at the beach working on your tan. The point is that one of the greatest potentials of material wealth is that you can afford to choose which tasks you take on yourself and which tasks you delegate to others. Additionally, when you avoid the trap of consumerism and lifestyle creep, you have a lot more power over what you do with your finite time. After all, owning tons of material possessions or living in an extravagant home aren’t just things that cost you money, but they also secretly cost you a lot of time.

It is all too common for people to sacrifice their time in the present in order to build wealth that they expect to spend decades down the road in retirement. However, if you only focus on building material wealth and don’t allow yourself to engage in meaningful activities in the present, a horrible thing can happen.

It can destroy your soul.

The problem with the strategy of sacrificing all of your time in order to make money for the future is that what you do with your life makes you who you are. If you are putting your dreams and purposes on hold until some future date, you might find that you don’t have access to the wealth of potential you believed so strongly in when you started your wealth-building journey.

Time wealth is also something you want to consider when making purchases. There’s nothing wrong with spending money, but you’ll always want to think about whether a purchase frees up your time or takes your time. Consider whether what you’re buying requires a time sacrifice that you think is worth it, and whether the purchase enhances the time that you get to spend with those you love or on projects that are meaningful to you.

Family Wealth

Do you know anyone that seems to have it all, but is ultimately missing one of the most important aspects of life? Bouncing around the globe and posting pictures of your excursions on Instagram might seem like an incredible life experience, but what if that means you end up being 40 and fundamentally alone, without a spouse and estranged from the family you were born into?

When you’re younger, you might think that you’re happy to be a bachelor (or ette) forever. It’s important to understand, though, that it’s possible (and likely) that your priorities will change as time passes. Old friends fade into the ether and you realize you don’t have anyone to call when you’ve got exciting news to share or when you’re lonely. Maybe you’re healthy, happy, and rich, but there will likely come a point when you wish you had found someone to share your experiences and life with.

On the other hand, maybe you have been putting your nose to the grindstone for years now to make a living for your family. Your kids have everything they need, your wife gets to be a stay-at-home mom, and you’ve been building up your retirement account so you can escape to Tulum someday once your hair is gray.

At the same time, you hardly get to spend time with your family. You leave on business trips and come back to find that your kids seem a bit older in a way you can’t put your finger on. Your wife resents you for not being around but also seems inconvenienced when you’re home. You are putting everything into financially supporting the family, but you ultimately don’t have a rich relationship with the people closest to you.

Are you sacrificing camping trips with your kids or evening walks with your spouse because you haven’t left any time for this essential aspect of life? Are you missing out on father-daughter dances, baseball games, piano recitals, and s’mores out at the fire pit?

Having a healthy and happy family is a very important part of living a rich life. Maybe it’s just you and your partner and a few dogs or maybe you have ten kids, but either way, it’s important to recognize that it’s very common for people at the end of their life to regret not spending enough time with their family. On the flip side, people rarely regret having spent too much time with those they love.

As one final note, I do want to mention that sometimes the family you’re born into can be abusive, neglectful, and all-around unsupportive of the pursuit of your greatest potential. While this warrants an article all on its own, it’s worth mentioning that family wealth isn’t a one-way street. Even though it’s ultimately ideal to have healthy and rich relationships with your immediate family, in some instances, it’s likely better to separate yourself from abusive and controlling family members.

Emotional Wealth

emotionally wealthy people running through desert
When you are emotionally wealthy, you can take on the world.

Just like health wealth, emotional wealth is foundational to achieving any of the other types of wealth in a sustainable way. When you lack emotional wealth (or, as one could say, are emotionally impoverished,) it might manifest itself in the form of:

  • Anxiety
  • Depression
  • Dysfunctional relationships
  • Imposter syndrome
  • Self-hate
  • Lack of purpose
  • Lack of life plan
  • Procrastination
  • Perfectionism
  • Limiting beliefs

On the other hand, a person who is filled to the brim with emotional health will have healthy relationships, work-life satisfaction, a sense of purpose in their lives, emotional intelligence, and, often, financial wealth. Emotionally healthy people show themselves love and compassion and have a maturity that emotionally impoverished people simply do not.

When you’re wealthy emotionally, you don’t have to put on a persona to convince other people that you’re worthy of their love or to receive their affirmation.

Rather than running around trying to please everyone, you have a sense of an internal compass that you trust to guide you through life. You believe in yourself, you resist distraction, and you believe in the abundance of your own future.

Sadly, many Americans would fall into the category of emotionally poor. There are likely a lot of reasons that this is the case, and lots of people don’t even realize that they are lacking this type of wealth. In our materialistic, consumeristic society, it’s all too easy to get wrapped up in the cycle of thinking that you need more, more, and more, only to be left financially worse off and riddled with uncomfortable feelings of guilt, anxiety, and emptiness.

Additionally, many careerist paths basically demand that you turn yourself into some kind of robot. When you’re climbing the corporate ladder, you’re simply not supposed to have feelings. You’re not supposed to have bad days, you’re not supposed to let your personal life affect your work, and you’re certainly never supposed to express yourself in a way that could make others uncomfortable or, God forbid, make you seem weird.

There’s a common misconception that being emotionally healthy means that you never feel anger, sadness, or any of those other bummer feelings. In reality, though, the healthiest way to deal with emotions is to acknowledge that they are there and let yourself feel them. If you’re new to the world of not suppressing your emotions, this can feel clunky at first, but, over time, you will find that you reach a level of emotional stability and wellness that you never imagined was possible.

You shouldn’t let your emotions control you, but you also shouldn’t pretend you’re made out of stone.

Deceiving yourself to think that you are free from human emotions will not be a costless endeavor. If your father dies, let yourself cry, for Pete’s sake. If you feel anger, find a quiet place where you can hoot and holler and punch a pillow.

Being emotionally healthy (and wealthy) is about having so much compassion for yourself that you’re able to accept the fact that you have emotions. When you reach that point of self-awareness, your emotions no longer have to control you. Emotions are a part of the human experience, and with a healthy outlook on life and often a lot of self-work, it’s possible to get to a point where your cup is running over with emotional well-being.

Without emotional wealth, you will struggle to succeed in building any of the other types of wealth. Even if you do have an incredible morning day-trading on the stock market, you’ll likely let greed or fear get a hold of you soon enough. Even if you’re in decent physical shape currently, emotional poverty can lead to deteriorating health when you don’t have a supportive, loving view of yourself.

If you can identify yourself as being emotionally poor, all is not lost. Not in the slightest! Though overcoming negative and destructive habits and mindsets can take a lot of hard work and time, it is entirely possible to transform your life by changing your attitude. When you cultivate a deep sense of love for yourself, purpose in the world, and an optimistic forward-looking outlook, you’ll be on the path to building all of the essential types of wealth.

Friendship Wealth

friends on a mountain
When you have friends who want the best for you, you're tapping into one of the greatest gifts life can give.

According to a study published by “The Survey Center on American Life,” Americans are lonelier now than they were just thirty years ago. About half of all Americans said that they have less than three close friends, and 12% of people say that they don’t have one single friend.

There are probably a lot of reasons why this is the case– people increasingly socializing on the internet instead of IRL, careerist types bouncing from city to city in order to climb the ladder, etc.

If you want to be wealthy, truly wealthy, though, it’s important to understand just how vital social relationships are to our health. If you need scientific proof of this notion, this study examines how the quantity and quality of a person’s social relationships impact their mental health, physical health, health behavior, and even their mortality risk.

When you have friends, it can help you increase your sense of both purpose and belonging, reduce your stress, make you happier, and encourage you to pick up healthy lifestyle habits. If you experience a rough spot in your life, whether it’s an illness, the loss of a job, a divorce, or the death of someone you love, friends are an essential tool in your arsenal.

That being said, it’s arguably better to have no friends at all than it is to have friends that don’t support your best interests. There are, sadly, plenty of people out there that ultimately don’t want the best for you, and it can be easy to get wrapped up in “friendships” with people that take way more than they give, lie, steal, play manipulative games, or want to keep you engaged in a behavior that is unhealthy for you because it benefits them.

If you’ve made it to adulthood with some quality friends still by your side, that’s great news. Be sure to not let those friendships peter out over time, though, because making friends typically gets more difficult as you get older.

That being said, don’t fret if most of your old friends have fallen by the wayside. While the study I referenced above talks about the importance of quantity and quality, I’d definitely suggest focusing more on the latter. Even having a small handful of people that you feel comfortable being yourself around can be life-changing, and, over time, you’ll find that the relationships get deeper and richer.

My Final Thoughts on the Different Types of Wealth

In our culture, it seems like there is an all-or-nothing attitude when it comes to wealth. On the one hand, you have people that pursue material wealth in order to support their consumeristic lifestyle and to impress others with their success. On the other hand, there is definitely a faction of people that see the destructive nature of consumerism but are unable to separate that from financial success. They believe that rich people are inherently greedy and evil, and they tend to see the world from the perspective of being the victim in their life story rather than the hero.

I started this blog because I know that it’s possible to build wealth without becoming a mindless consumer. Being rich doesn’t have to mean that you’re materialistic or selfish. On the contrary, it can allow you to have the headspace and time to pursue your purposes.

If you feel like there are problems in society that you can help solve, wealth and maintaining a healthy mindset are key weapons you’ll want to have in your arsenal. If you feel like you have something meaningful to contribute to the world, systematic wealth-building can help you coax your ideas and dreams over the threshold into physical reality.

So, why am I telling you all this? I’ve learned a lot of lessons the hard way in my journey to wealth and I want to help others recognize the different types of wealth that they should cultivate and nurture in their own lives. If you’re curious, you can learn more about me and my projects here.

If you’re able to build a foundation of emotional, spiritual, social, and health wealth, you are on the right track to living a purpose-driven life. Over time, it becomes easier and easier to see that material wealth is not an end in itself, but rather an incredibly powerful tool that you can use to live a productive, meaningful, and fulfilling life.

If you’re like most people, the idea of being rich automatically conjures images of infinity pools with incredible ocean views, full-time house staff, elaborate estates, and private jets. Some wealthy people, though, actually keep their fortune a secret from everyone around them. The concept of living below your means even though you’ve got some serious assets to your name is known as stealth wealth.

When I made my first million at 25, I didn’t run out the door and buy a Ferrari. Actually, I didn’t even move out of my tiny, affordable apartment for another two years. When I finally did move, I ended up just moving into a cheap, blue-collar neighborhood. I've talked a bit about my background on the bio page.

You might wonder what the point of amassing a fortune is if you aren’t going to blow through it, but there are actually tons of benefits to living a stealth wealth lifestyle.

I’m not here to brag about the fact that I’ve been financially successful. In fact, I’m actually pretty uncomfortable coming out as “rich.” That being said, I think that taking a stealth wealth approach to life is something that we should normalize in our culture, and I want to help others learn how to gain financial freedom without falling prey to the normal traps that come along with increasing net worth.

So what is stealth wealth, exactly, and how do you spot it? In this post, I’ll explore everything you need to know about rich people who purposefully live below their means.

What is Stealth Wealth?

"Stealth wealth" is a term used to describe when someone doesn't outwardly express the fact that they have a high net worth. They keep it on the down-low. It's not that they aren't rich; it's that they are secretly wealthy because they don't want to drive too much attention or focus on their money.

Let's say you're a wealthy person. Rather than taking your wealth and purchasing status symbols like extravagant homes, expensive cars, and designer clothes, stealth wealth means you keep your wealth under wraps. Some people even go so far as to keep the fact that they’re rich from their family members and closest friends.

Ok, before you google “stealth wealth meaning,” here’s the simplest definition: stealth wealth is when you’re rich but you don’t act rich. You fly under the radar, not drawing any attention to the fact that you’ve secretly been amassing a fortune. Some people take stealth wealth to the extreme, where even their closest friends and family don’t know that they’ve become rich or that they’ve managed to retire early.

People who practice stealth wealth might look like completely average people from the outside. They drive regular-looking cars, don’t have flashy clothes or jewelry, and generally don’t engage in the culture of overconsumption. Rather than living in a multi-million dollar ocean-front mansion that they could technically afford, the stealthily wealthy opt for homes that are modest and unassuming.

Why Are People Secretly Wealthy?

If you’ve never heard of stealth wealth before, you might wonder why someone that had amassed a fortune in their life would go to the trouble of hiding their wealth from the people around them.

However, there are actually a lot of good reasons to practice stealth wealth. While living a luxurious lifestyle and enjoying your extreme wealth can certainly be pleasurable, these are usually short-lived benefits. When you are rich and you let everyone know it, you’ll soon learn that there are some serious downsides to advertising your wealth.

People might choose to practice stealth wealth for a number of reasons. One of these is that it helps to avoid the reality where other people will expect things from you because they assume you have more spending power than they do. If you let others know that you’re rich, you’ll soon find that some of the people around you start expecting you to pick up the tab at a restaurant for a group of 20, loaning them money when they fall on hard times, and more.

Of course, the point of being wealthy isn’t hoarding your money stingily without ever spreading the love. The point, though, is that others don’t always understand that you still have to manage your money and make smart financial decisions even when you have a high net worth.

When you practice stealth wealth, it can also help you avoid some of the judgment that comes along with being rich. If you start flaunting your deep pockets, you’ll soon learn that lots of people have opinions about rich people and they won’t think twice about judging you for your wealth. These people might think that having money means that you are inherently greedy or exploitative, that you amassed your fortune simply through privilege, or they might simply resent you for having what they want but don’t have. Even if the people around you don’t have a negative perspective on wealth, you’ll likely find that the more money people know you have, the more they seem to know exactly what you should be doing with it.

Stealth Wealth Signs: How to Tell if Someone is Secretly Wealthy

If you’re curious to know if someone secretly has more wealth than they let on, there are some common stealth wealth signs you can keep an eye out for. People who practice stealth wealth won’t be showing off their riches in an obvious way, but if you pay close attention you can notice some indications that they are very comfortable financially.

They Are Very Focused

dart board with bullseye incredible focuse

Someone that has worked to become wealthy is typically very goal-oriented. They understand how much attention and focus it takes to build up wealth over time. These individuals aren’t likely to just go with the whims of the crowd– instead, they have a sense of where they want to go and they stay on their path.

They Value Their Time

While people who are secretly wealthy might not flaunt it, they also understand at a deep level just how valuable time is. Someone who is rich might realize that they know how to make more money, but you can’t make more time. However, you can choose how you spend your time, and a stealthily wealthy person is going to be much more inclined to pay others to do time-consuming activities like dealing with a plumbing problem, mowing their lawn, or clearing snow from their driveway.

They’re Noticeably Confident

When a person is financially secure, they often have unique confidence in themselves. They have worked hard to get to where they are. They believe in themselves and the path they have chosen in life, and they are proud of what they have accomplished. At the same time, they are not falling prey to the ego boost that comes from flaunting one's wealth, which is another signifier that they are secure in themselves and don’t need the approval of others to believe in themselves.

They’re Less Stressed

One of the signs that a person is living the stealth wealth lifestyle is not sweating the small stuff.

If you have a neighbor that seems to live modestly but really doesn’t seem to sweat the small stuff, they might be secretly wealthy. When there are issues that need to be dealt with, whether they can be fixed with money or not, people who practice stealth wealth are often able to stay calm under pressure and keep problems that crop up in perspective.

They Wear High-Quality Clothes That Fit Them Well

While people who have stealth wealth don’t show off their riches by definition, there are a few material signs of someone’s secret fortune. You might know someone who wears simple, unbranded clothes, but they seem to fit them incredibly well and be made of high-quality materials.

Rich people that don’t feel the need to flaunt their wealth often do recognize the importance of comfort and quality when it comes to clothing. While they feel no need to plaster brands all over their body like a walking billboard, they definitely understand that high-quality clothes can help you feel your best and will last longer than your average Walmart t-shirt.

Their House and Car Are Well Maintained

Another stealth wealth sign is when a person’s house and car, even when they are very modest, are always impeccably maintained. This is because people who have amassed wealth and keep it to themselves often understand the value of the investments they make. Not only can they afford to maintain their house and their car, but they also understand that it is more affordable in the long term to stay on top of maintenance rather than deferring it and eventually having to make pricey repairs.

They Keep to Themselves

stealth wealth man alone on mountain
Stealthily wealthy people tend to value activities with more depth rather than those that produce immediate gratification. For this reason (and others), they might come off as loners.

While this isn’t always the case, there is a tendency for people with stealth wealth to be loners. These people have led very focused lives, and they are protective of their wealth, their time, and their personal lives. To those outside of their close family and friends, it might appear that they prefer to keep to themselves.

People who practice stealth wealth also tend to value activities with more depth rather than those that produce immediate gratification. You likely won’t find them spending big bucks at the bar or partying on a yacht. Rather than having a huge social group, these people tend to have a small circle of close friends and family with whom they feel they can genuinely relate.

They Think on a Long Timeline

If you don’t have money stacked up, there’s a good chance you have to think about a short time frame just to make it through each day. When problems crop up, they have to take priority. You are driven by your immediate needs rather than your long-term goals.
People with stealth wealth, though, can afford to think on a longer timeline. In fact, being able to perceive their lives in this way is exactly how they managed to amass wealth in the first place.

They Don’t Brag

A person that is secretly wealthy isn’t eager to brag about how much money they made this year or how successful their investment portfolio has been. They have a sense of confidence and self-assuredness which means they don’t need affirmation from other people. This means that you won’t find them dropping hints about their wealth or trying to get pats on the back from other people for their accomplishments.

Stealthy Wealthy Lifestyle: Family, Cars, Investing - What it Includes

What does a stealthy wealthy lifestyle include?

Being secretly wealthy doesn’t have to mean that you live in a dangerous neighborhood in a run-down, rat-infested house. You aren’t necessarily trying to convince people that you’re poor. You just don’t want them to know that you’re rich.

Basically, this means masquerading as someone who’s somewhere around the middle class.

You can have a nice house, a nice car, and nice clothes, but just not too nice.

Stealth Wealth Cars

When it comes to cars, you want to choose something that is practical, not too flashy, reliable, and offers a good value for the money. Warren Buffett famously drives a Cadillac XTS, which is a car that retailed at the time of purchase at around $45,000. Mark Zuckerberg is often seen driving the $30,000 Acura TSX, and the wealthiest woman in the world, Alice Walton, drives a 2006 Ford F-150 King Ranch which retails for about $40,000.

Stealth Wealth Family and Home

When I made my first million in 2014, I didn’t trade my tiny apartment for a luxury penthouse. Instead, I stayed in that little apartment for another two years before “upgrading” to a home in a small working-class neighborhood in Arkansas. Even though I reached a point where I had a seven-figure income, I chose to maintain a modest lifestyle because I didn’t see money as a part of my identity.

Though it can be tempting to buy an MTV-Cribs-style house when you strike it rich, there are a lot of secret costs to living that type of lifestyle. On top of the downsides of having others know that you are wealthy, living in a 10,000+ square foot home isn’t all it’s cracked up to be. It can feel like you’re living in a magazine instead of a home, it costs a lot to maintain, and you’ll likely find you need to manage a full staff to keep the place in good working order. Ultimately, it’s rarely worth it.

When it comes to family, there are some major benefits to practicing a stealth wealth lifestyle. Rather than letting your sweet children grow up with a bad case of affluenza, you can pass on all of the valuable lessons you’ve learned about building wealth in a smart, healthy way. This way, when it comes time to pass on your wealth to your children, you know that it will benefit them rather than destroy them.

Stealth Wealth Investing

Rich people know that a key principle to getting wealthy and staying wealthy is having your money work for you. Rather than “investing” your money in flashy cars and obscenely expensive dinners, people with stealth wealth invest their assets in a healthily diversified portfolio. This can mean some combination of real estate, mutual funds, stocks, bonds, precious metals, small businesses, futures, options, and more. When you take your hard-earned money and invest it rather than living a lifestyle focused on consumption, you can increase your wealth and buy yourself the most valuable asset of all: time.

How Do People Hide Their Wealth?

People hide their wealth through a number of different avenues. You can keep your wealth a secret from the people around you by living in a modest home, driving a regular car, and avoiding dressing in luxury-brand clothing. You don’t splurge on eating out at trendy restaurants or advertise your opulent vacation on Instagram. In the same way that many people who aren’t wealthy are able to curate an image of being rich, you can curate an image of being average.

Rich entrepreneurs might choose to create anonymous LLCs for their businesses to help separate their personal information from their successful businesses. There are also a number of tax-avoidant strategies that can be used to help reduce your tax burden, but, for obvious reasons, you should be sure to work with a CPA to ensure that everything you’re doing is above board.

How Do People Become Secretly Wealthy?

When we think of wealth, we often think of mega-celebrities that are constantly in the public conversation. People like Elon Musk, Jeff Bezos, Mark Zuckerberg, Tom Cruise, Oprah, and Warren Buffett are the types of people that typically come to mind first.
However, there are plenty of people that are very wealthy that fly under the radar. If you are pursuing a career that puts you in the public eye, though, it becomes much more difficult.

While your income and ability to invest can have a big impact on your ability to build wealth, you don’t have to make a seven-figure income to get rich over time. Some tactics secretly wealthy people have used to build their net worth include:

  • Not wasting money on assets that depreciate
  • Avoiding lifestyle creep and never spending more money than they have
  • Understanding the power of compound interest
  • Not getting addicted to an expensive lifestyle
  • Spending (some of) their free time learning about personal finance and financial skills
  • Keeping track of all of their assets and liabilities
  • Having a healthy money mindset
  • Maintaining a budget even when they're wealthy
  • Creating multiple income streams
  • Having a long-term plan

Lots of people think that getting rich is just a matter of luck, but that’s usually not the case. Even if someone seems like an overnight success, there’s likely at least a decade's worth of hard work lurking in the background. Becoming secretly wealthy is definitely within reach, but it takes dedication, focus, drive, and a solid plan. There are a lot of different ways to make money, but the most important thing to recognize is that loud consumption doesn’t make people wealthy. What makes people rich is economic productivity.

Benefits of Stealth Wealth

In lieu of fancy cars and opulent houses, what does one gain from their wealth when they don’t flaunt it? For many people, the benefits of stealth wealth far outweigh the short-term gains of being openly rich.

You Can Avoid the Rat Race

When you live below your means, you can step outside of the rat race and work on the things that are truly meaningful to you. Whether you retire early or you keep your day job, you have more freedom to decide how you spend your time.

You Don’t Fall Prey to Lifestyle Creep

consumeristic woman with shopping bags
Consumerism, lifestyle creep, and keeping up with the Jones' are the enemies of stealth wealth.

One of the craziest things that can happen to wealthy people is that they often still feel a sense of insecurity that drives them to make more money, even when they already have plenty. One of the reasons for this is lifestyle creep. Basically, for some people, the more money they have the more they will spend. As their net worth increases, so do their expenses.

When you practice stealth wealth, you can keep more of what you make. Rather than continuously trading in your perfectly suitable house for something that screams “I’m rich!”, you choose to purposefully live below your means. This allows you to have the comfort of knowing that you have a huge financial cushion if you were to fall on hard times, and you also aren’t taking on huge monthly expenses that could leave you bankrupt if the tides turn against you.

You Avoid Expectations

If you are open about how much money you have, people will start to expect you to pick up the bill. When you keep your wealth to yourself, you can avoid these expectations.

You Don’t Put Yourself at Risk for Getting Ripped Off

Unfortunately, some people see the wealthy as an opportunity to get more than their fair share of a job. Whether it’s a contractor, an auto mechanic, or another quote-based profession, being clearly wealthy is likely going to have some people charging you more than usual for a job because they think you won’t notice or bat an eye. When you keep your wealth on the down low, you’re less likely to get ripped off in this type of scenario.

You Know Who Your True Friends Are

When you’re rich and people know it, you’ll find you have plenty of friends. However, how do you know they really like you for you and don’t just want a taste of that opulent lifestyle?

You can avoid this entirely by keeping your riches under wraps. You’ll know that the friends you make just want to be around you because they like you, not because they’re hoping you’ll loan them money or buy them something shiny.

People Don’t Constantly Ask You For Money

Rich people are constantly being solicited for donations, loans, and gifts. When people don’t have wealth, they often don’t understand that it isn’t an infinite pool of money. You have to be selective about where you spend money in order to stay wealthy.

In fact, if it becomes publicly known that you’re rich, you’ll be surprised by who pops up out of the woodwork. Relatives and acquaintances that you haven’t heard from in years will all of a sudden call “just to see how you’re doing.” Soon enough, it will become clear that they’re actually looking for a handout or even just the ego boost of being in touch with someone wealthy.

At the end of the day, the fewer people know that you have deep pockets, the less you’ll be put in a position where you have to say no.

It Helps You Stay Humble

wealthy peacock showing off feathers
Getting rich can get to your head. Stealth wealth helps you stay humble.

One of the biggest dangers of wealth is letting it get to your head. It can reinforce some negative traits because you have more options. There are good and bad sides to everything, including having wealth and living luxuriously. When you live an opulent lifestyle, you’re increasingly surrounded by people who are just telling you what you want to hear. You can lose touch with the rest of your society and you can lose touch with who you really are underneath it all.

When you practice stealth wealth, it reminds you to stay humble. You are reminded to be grateful for what you have accomplished and what you have gained. You remember what it was like to have less and you want to help others succeed rather than fear being tossed from your golden throne.

Through this practice, you are building up a cushion that will catch you if the tides turn against you. Rather than spending all your money as if you’ve tapped into an infinite stream, you keep a good head on your shoulders and remember to value all of the best things in life– the things that money simply can’t buy.

7 Quotes About "Stealth Wealth" for Inspiration

“It is neither wealth nor splendor, but tranquility and occupation which give you happiness.”

-Thomas Jefferson

 

“Wealth is the ability to fully experience life.”

-Henry David Thoreau

 

“Time is more valuable than money. You can get more money, but you cannot get more time.”

-Jim Rohn

 

“If you don’t find a way to make money while you sleep, you will work until you die.”

-Warren Buffett

 

“…Not doing what we love in the name of greed is very poor management of our lives.”

-Warren Buffett

 

“Too many people spend money they earned to buy things they don’t want to impress people that they don’t like.”

-Will Rogers

 

“He is the richest who is content with the least, for content is the wealth of nature.”

-Socrates

 

“Wealth is a tool of freedom, but the pursuit of wealth is the way to slavery.”

-Frank Herbert

Should I Practice Stealth Wealth?

I’m a huge proponent of the stealth wealth lifestyle. So, if you’re asking me “should I practice stealth wealth?” I’m probably going to answer yes.

There really are very few downsides to this lifestyle. Sure, you don’t get all of the affirmation and ego-boosts that come along with flaunting your wealth, but deep down you know those are superficial gains anyway. While there are plenty of benefits of stealth wealth, one of the biggest pros for me is that I know that accruing money isn’t what makes me me. Being economically productive is meaningful to me, and that’s why I do it.
Our culture is one that largely centers around consumerism. In lieu of more meaningful things, we often look to material objects and signifiers of wealth in pursuit of some kind of satisfaction. Ultimately, though, we all know at some level that these things typically produce more emptiness rather than taking it away.

The point of wealth doesn’t have to be to consume, consume, and then consume some more. What if at the end of your life you produced more than you consume? What if your time on earth was a net gain rather than a net loss for your society?

When you build wealth, it gives you the opportunity to climb up the hierarchy of needs and participate in work you truly find meaningful. Whether that means building wells for Pygmies in the Congo or offering the best darn landscaping services in all of Oklahoma, stealth wealth lets you focus on your true purposes without getting weighed down by all of the potential distractions of being rich.

Conclusion

So there you have it– a thorough dive into the world of the secretly wealthy. As you now know, there are tons of benefits of stealth wealth that allow you to live the life you want without getting dragged down by all of the negative aspects of being known as a rich guy. When you live the stealth wealth lifestyle, it means you can focus on the things that really matter to you and live the life you want without falling prey to lifestyle creep or other unfortunate side effects of being wealthy.

I’m only talking publicly about my path to wealth and my choice to live as a secretly wealthy person because I think it would be a genuinely good thing for our culture and our society. Being rich doesn’t have to mean that you’ve just graduated to a higher rung of the rat race. If more people chose the stealth wealth lifestyle, it could mean that more people have the time and headspace to meaningfully contribute to society.

A bill banning catalog and internet sales of tobacco - including premium cigars - just passed subcommittee in the House of Representatives. The bill also raises the smoking age to 21 for everyone, including military members.

That this even passed the subcommittee shows just how deranged and pathetic the do-gooder, nanny-state weaklings in congress really are.

We've become a nation of whining children, incapable of dealing with the fact that liberty means having the option to splurge on ourselves when we decide.

Sometimes that means fried foods, sometimes that means desserts, sometimes that means a large sugary drink at the theater, and sometimes that means some premium tobacco.

That premium cigars are included in this anti-smoking garbage means it's NOT about health.

Premium cigars are created from 100% tobacco leaves, hand-crafted following centuries of tradition, and are generally used to mark moments of celebration, to bond with friends, or just to live the good life.

Unlike cigarettes, premium cigars aren't inhaled, aren't chain smoked, and in moderation have little-to-no negative impact on one's health.

In fact, most life insurance companies explicitly protect the right of the insured to smoke an occasional cigar - some even allow multiple smokes per month.

Again, it's not about health. But even if it was, we still shouldn't care because we're adults and should have the right to make adult decisions - like how much we eat, how much we drink, and how we live our lives in general.

That this bill also raises the smoking age for MILITARY MEMBERS to the age of 21 is beyond asinine. If you're old enough to die in Afghanistan, then you're old enough to smoke a Davidoff with me before you're shipped out.

This is just another step in the never-ending march of a decaying society towards permanent adolescence. I don't want any part.

I’m a buyer of gold and silver, but I take a different approach than most metals investors.

I don’t predict soaring gold prices - even while I buy more gold and silver every single week.

In fact, while I was acquiring large quantities of precious metals, I wrote a much-ridiculed article expressing caution over gold prices - at the peak of the gold bull market.

While everyone else was drunk on perpetually increasing gold prices, I wrote that gold was ‘expensive’ and would ‘likely’ drop ‘dramatically’ in price. Even more provocatively, I published the article on a popular Austrian economics website, which was rabidly pro-gold.

But I got the last laugh, not because I’m some kind of Nostradamus, but because following cautious, conservative principles works, over time.

Radicalism Doesn’t Work - Conservatism Does

Whenever you see someone who makes radical predictions be on the lookout.

Radical predictions are a byproduct of radicalism, and radicalism does not work. Just ask the people who lost their savings with bitcoin, the tech bubble of the late 1990s, real estate in 2007, and pretty much every other bubble in history.

The universe rewards conservatives, both politically and economically.

Conservatism is more than just a partisan buzzword. It’s a strategic philosophy that emphasizes caution, skepticism, realism, and historical patterns. Conservative investors are nearly always going to outperform penny stock investors, bitcoin speculators, and pretty much anyone else who is trying to get rich by gambling on a dramatic prediction.

The Controversial Announcement From 2011

In 2011, when gold prices peaked, I wrote an article for the Mises Institute of Canada, explaining that gold was expensive and that it was likely that the market would “dramatically overcorrect, meaning gold will essentially become cheap again.”

The price of gold peaked… that week. And it’s been dropping pretty much ever since.

If you look at the comments on the article, you’ll see a collection of people who were confused. They let their oversimplified libertarian radicalism cloud their ability to understand gold - and they believed that the only possible direction for gold prices was up.

That said, I did NOT predict the crash with any kind of time frame. I also didn’t say it was inevitable - just that it was “more likely” that it would “probably dramatically overcorrect.”

The reason I emphasize this is that while I’ve made a lot of money in my life being right about niches and markets, I never assume that something must happen. Predictions are for suckers.

Prediction: The Future is Largely Unpredictable

The future is largely unpredictable, at least at any level beyond vague trends. This means that finding opportunity means more than looking for the most obvious play.

  • We know that technology will be important going forward, but we don’t know that buying tech stocks is a “sure thing.” Just look at investors who missed that basic principle when they were wiped out in the early 2000’s tech bubble.
  • We know that oil will be replaced by renewables at some point. But don’t be that sucker who gambled against oil in 2016 when prices bottomed out.
  • Seeing a long-term trend isn’t enough to make a specific prediction or investment. That’s a dangerous oversimplification that is behind nearly every bubble that ends up deceiving huge numbers of investors.

Just because we can identify major trends doesn’t mean we can translate that knowledge into actionable specifics. Life isn’t that simple.

As John Maynard Keynes once wrote, “The market can remain irrational longer than you can remain solvent.”

How to Take Part in Long-Term Trends

Conservatism isn’t about fearing radicalism. It’s simply recognizing that the universe is a fuzzy, difficult-to-understand place. Good strategy requires a healthy dose of humility and realism.

When it comes to building wealth and taking part in long-term trends, here’s how to do it:

  • Don’t gamble. Buy income. The simplest pillar of finance is that investing is the art of buying income. Remember that and you’ll never go broke. Buying something purely for the resellability factor, without accounting for the future income potential is how you lose your life savings. Trying to play the ‘greater fool’ game just means you’re one of the fools.

How does gold fit in to this? Gold shouldn’t really be seen as an investment. It should be seen as an insurance policy that, if everything goes well, will lose money over time. It’s like buying a life insurance policy on a family member - you don’t win if you make money. It means something horrific occured. If gold becomes the best asset I own, it means that hell has been unleashed.

  • Don’t gamble. Diversify. If you don’t have 5-10 different ways of earning 5%+ returns per year over time, then you’re not diversified enough. Stocks, REITs, long-term bonds, rental properties, whole-life insurance, entrepreneurship, private lending - there are many options.
  • Don’t gamble. Position. I always position myself so that my worst case scenario is still pretty good. This is why the Vanguard Balanced fund outperforms most investors’ portfolios over time. It’s why I focus on making sure I have dramatically more cash available than what I ‘need.’ It’s why I pretend like I earn drastically less than I do when making financial calculations. Heck, it’s why I live in a blue-collar neighborhood even though I’ve been a millionaire for years. Positioning is everything.

Bonus: Follow the clipper-ship strategy. I’ll be writing more about this in the future. It’s one of the most powerful ways to make money in nearly any market. Rather than trying to strike gold during a gold rush, you sell shovels to the miners.

Ignore the Radical Predictions; Focus on Good Strategy

Conservative strategy is good strategy.

When you make the right decisions, you don’t have to look for radical predictions to gamble on - you don't need the gamble at all. Cautious, skeptical, humble strategies always win out over time.

Because I use dollar-cost averaging and have a diversified portfolio and a high rate of savings, I’m unlikely to find myself in the desperate position of being close to retirement age and gambling on penny stocks because I didn’t save enough and am looking for a big payout to make up for lost time.

Legendary corporate strategist Michael Porter wrote: “The essence of strategy is choosing what not to do.”

But how do you make the right choices? Ultimately, it’s all about your mental framework. Making caution an important part of your investing strategy focuses your attention on what not to do.

That makes all the difference.

Consumerism is the ultimate scam: it never delivers on the implied promise of emotional fulfillment. It's an extremely contagious, nearly incurable cultural disease - the more you expect, the more you try to achieve that expectation, then the higher your consumption standards become. Achieving your consumption goals feel like a failure.

It's the philosophy of moving targets, trading real life for a never-ending, moving target that cannot be achieved, quenched, or fulfilled - by nature.

Consumerism isn't wanting a new phone - it's always wanting a newer phone.

Falling for consumerism begins innocently: wanting to keep up with one's social peers. Eventually, you'll find yourself risking the lives of real families so you can text-and-drive to save 5 seconds, pissed off at the high-school kid because you have mustard instead of ketchup on your sandwich, giving up spending time loving your wife because you feel she wants a bigger house more than your precious time.

This is one reason, among many, that I choose to be part of the stealthy wealthy, which is a movement of people who don't just blow their money on consumerism once they earn it.

How Consumerism Eats Away at Our Souls

Almost everyone rejects consumerism in theory, but in application, it's killing us socially, financially, culturally, and emotionally.

Consumerism is the orphan maker, leading to generations of children growing up with new toys but absent, distracted parents.

Consumerism is the financial annihilator, leading to financial decisions being based on spending money rather than achieving personal, family, and social goals.

Consumerism is the great culture killer, obliterating authentic cultural identity with a mindless, vague existence based on what one consumes rather than who one is.

Consumerism, Anxiety, Guilt, Depression

Consumerism is the emotional executioner, directly and completely robbing people of any sense of being able to enjoy "now." We trade fulfillment for the gnawing desire for more petty consumption as a lifestyle.

Being emotionally tied to unachievable goals leads to perpetual feelings of anxiety, gnawing-but-vague regret, and an uncanny feeling that one is wasting one's life. Consumerism isn't just unhealthy - it's evil.

I've never seen a consumption-obsessed person finally hit the lifestyle that allows them to relax. Because it's not about any material, set goal. It's about the cultural obsession with more, the perpetually moving target itself.

If anything, the more one 'wins' at consumerism, the more devastating the consequences. There aren't enough fancy new coffee shops in the world to make up for a thirsty soul that can't be quenched. And no, this isn't a swipe against fancy coffee shops.

What Consumerism Is Not

Don't confuse consumerism with markets or capitalism. Capital is important, and markets are vital, but consumerism is a different animal. Consumerism is the idea that you behave only for a transactional gain - that life is a series of accounting decisions.

If you focus on consumption, then business success won't help you - it'll destroy you. It'll lock you into a new lifestyle like a slave shackled to a luxury galley ship. That lifestyle isn't success - it's your comfy hell on earth.

I think people know something is wrong. The Internet is speeding up our strengths and weaknesses - which includes consumerism going off the rails in new life-ruining speed.

The Alternatives to the Disease

There are plenty of competing potential alternatives to consumption as a religion. I won't go into much detail here, but the simplest I've found could be seen as character-based producerism: I only consume what I need and what I symbolically appreciate because of its reflection of my values.

If I have a nice cigar in my smoking room, it's not because I always need a new, better cigar. It's because I am rewarding myself to make a symbolic statement about my own production in other areas. It's about who I am as a person. That means even if the cigar ends up being too dry or poorly constructed, it won't be upsetting - the symbolism will work.

When I bought my Cadillac CTS-V, it wasn't because I always need the latest and greatest new car. It was because I knew what it stood for: hard work, innovation, and finally achieving a set financial goal. A few months ago, it was accidentally scratched - it didn't bother me because the car wasn't the goal. Being a good man was. The distinction is one most will always miss.

Perspective - focusing on who one is and what things mean - is the simplest antidote for consumerism of which I'm aware.

You don't have to be just like everyone else. You can be more productive, more stealthy about your income, and more balanced. To learn more, check out my about page and my essays page.

Garry Kasparov, the most successful chess player in history, is a fierce opponent of Vladimir Putin. After a failed run for president of Russia in 2008, Kasparov is often seen as the lead opposition voice against Putin in the West.

In this short video for The Economist, Kasparov explains that Putin doesn't behave like a chess player, so the often-overused chess bromide doesn't quite work here. Instead, Kasparov suggests Putin's style is more similar to another popular game.

Here's the full video:

It's tempting to see a major drop in the stock market and believe that you have enough information to make a fast profit.

Right before I started writing this article, the stock market dropped well over 4%, leading to social media exploding with small-time investors saying things like, "Buy the dip!"

It sounds like sound advice. If anything, it almost sounds obvious.

After all, if you buy when stocks dip, that should, if you're guesstimating things correctly, mean that you're getting stocks just like normal over time - but at a slightly better deal.

This makes you more money, right? If stocks were a good investment yesterday, and today they're 4% cheaper, then you're just grabbing a 4% better deal, right?

Not quite.

In fact, this tempting approach is statistically more likely to cost you than earn extra. In fact, since investors started saying "buy the dip", stocks are down another 4% - and we could be on the verge of a substantial correction.

Fundamentally, "buy the dip" is a bad strategy based on an economic illusion.

As they say, "If it's too good to be true..."

The hidden assumptions of "buy the dip"

"Buy the dip" has a lot of built-in assumptions that you can't statistically assume over time without getting seriously burned.

Let's break them down:

  • Market type assumption. You're assuming this is a dip and not the start of a bear market or at least a major correction. Miss the boat and you'll get slaughtered - rather than get a few extra percentage points to your total return. The potential risks here are bigger than the modest potential payoff.
  • Peak dip assumption. You're assuming that buying the dip now is better than buying the dip later. If the dip is still dipping, you might time it incorrectly. This is the irony of the entire cliché.
  • Rejecting previous prices assumption. You're assuming that buying the dip now is better than buying into the market earlier with that same available money. This one is harder to see. Think of it this way: would you rather buy at a slight dip from 26,000 or would you rather buy at 20,000 and reinvest along the way? You're assuming that this is the right time to buy stocks with your available capital - and not some earlier time. I'll explain this assumption more in depth below.

The ideas discussed immediately above are the basic assumptions of the "buy the dip" strategy. They might seem innocent but they can literally wipe out decades of savings because of several extremely important economic principles.

Let's look at the main principle that shatters these bad assumptions: the efficient market hypothesis.

WARNING: Ignoring boring concepts will put you at a disadvantage

Even if you find this to be mind-numbingly boring (most people would agree that it is), if you have any desire to save for retirement or find almost any level of financial independence, it's an idea you need to understand as much as possible.

This is the kind of financial and economic concept that every high-school student and college student should be deeply familiar with before they graduate. As I've written before, teaching financial concepts like this would change society completely. Unfortunately, the ideas are largely ignored.

Think of articles like this as the broccoli of self-help content. They're not fun to consume but you'll be better off if you do.

So grab a cup of coffee or tea, read the article, and feel free to contact me to discuss it further - or browse around the Internet to read some more. It's important and about way more than just "buy the dip" analysis.

Extremely important concept: "Efficient market hypothesis"

Let's back up a bit.

To understand why you can't beat the market with tactics like the ones discussed above, we need to understand a concept called the "efficient market hypothesis (EMH)."

Effectively, the efficient market hypothesis (EMH) is the idea that asset prices fully "account" for all "known" information.

Without getting lost in the weeds, the hypothesis claims that, roughly, the market is already accounting for everything we know about the market.

In other words, if you think a downturn is coming, the market is already priced for what it believes is the likelihood of one - so gambling on a future bear market will probably not make money, because the market has already accounted for that prediction as well.

There's a reason Google is priced higher than a failing grocery store chain. The market is already pricing in the gamble that Google has better long-term growth likelihood than the failing grocery chain, to put it simply.

This notion of the market already pricing predictions is confusing to people.

Most tend to think that investing is about picking winners more often than picking losers. This isn't remotely true.

In fact, this isn't true any more than the idea that sports gambling is about just picking winners - if you pick winners of football matches 75% of the time, you will probably still lose money because a bunch of other gamblers made those same predictions - meaning the odds aren't always going to be 50-50. If anything, after fees, you're effectively going to almost always lose money gambling over time.

The same thing goes for stocks. You think Coca-Cola is a good bet? So do billions and billions of investor dollars. You think Google is a good bet? So do billions and billions of investor dollars.

Market prices reflect market predictions, effectively. So whenever you are gambling on the basis of a prediction you are making, so are all of the other people buying, selling, holding - or considering those things - that asset.

It's not enough to get a prediction right. There's a lot more going on. That simplistic "good prediction" understanding of investing is tempting and destructive.

The more available information becomes, the more efficient markets become

No one person or organization decides what something is priced in the market. The stock market, in particular, is just a large collection of people buying and selling identical assets to other investors via bidding.

This means that prices simply reflect whatever supply and demand for the priced asset reflect at the time - if people suddenly stop selling, prices might go up - assuming there's the same number of people trying to buy with the same intensity as before.

This means that prices go up and down for individual assets on the basis of the investors trying to buy, hold, or sell the assets. So the prices reflect the desires being acted upon by the investors - market prices respond to what all of the investors think they are worth.

This understanding that markets reflect the beliefs of huge number of investors is important. Markets don't reflect random people or the average investor - they reflect the applied beliefs of investors with the most money being gambled on the asset, as well. The more exposure to the asset one has, the more one's acted-upon beliefs impact its price.

Market prices reflect what investors know about the market. Information being released impacts prices. Prices reflect known information - not just information, but known information. Or, more technically (and philosophically accurate, for lack of better word), prices reflect believed information.

This makes markets brutal, powerful, and very fast responders to events, analysis, and the learned experience of the most powerful investors. In other words, markets are elaborate social pricing machines based on known information about the assets in question.

Put simply, prices are the market's reflection of the known information about the asset at that particular time. This is important. If anything, understanding this is key to understanding everything else discussed on this page.

As information continues to spread faster and faster with innovations like the Internet, being able to have an "information edge" becomes increasingly difficult to the point of being impossible.

It would have been easier to outperform the stock market in 1940 than it is in 2018. Information simply spreads too fast and is too widely available to beat everyone else. Having an information advantage is difficult when insider trading is illegal and Indonesian street vendors have more information than the Library of Alexandria in their pocket computers.

Even Benjamin Graham, the father of value investing, (which Warren Buffet based his life work on), eventually came to concede to the efficiency of public markets. He wrote in 1976, literally 42 years ago and well before the Internet made things worse:

“I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I'm on the side of the "efficient market" school of thought now generally accepted by the professors.”

If Graham thought it was tough then, he would have been a vigorous supporter of the efficient market hypothesis now. As everyone should be.

The market is a massive pricing calculator involving almost all human wisdom

Understanding markets as nothing more than an incredibly massive, incredibly comprehensive series of pricing mechanisms is the first step towards financial humility.

People who misunderstand the EMH almost always misunderstand the first step: the market is just a big pricing machine accounting for nearly all known information. So unless you have some massive, massive information advantage (like insider trading, or some kind of elaborate expertise in a particular industry mixed with the ability to understand utterly in-depth financial valuations), you won't outperform the market. Period.

So you won't do better if you buy the dip than if you don't. You won't do better if you refuse to invest during a dip. You won't do better no matter what you do - not risk-adjusted.

This doesn't mean you're helpless. Make sure to read the end of this article if you'd like to skip to the more optimistic interpretation of these concepts.

You and I aren't nearly as smart as we'd like to be. Our comically tiny ability to comprehend the Universe pales in comparison to countless investors using countless unique angles coming together in the total capital markets - with almost everyone looking for the slightest advantage.

Why this mumbo-jumbo market pricing stuff matters

You can't beat the stock market, risk-adjusted.

Even if you predict all kinds of things correctly, that's not the point - you'll eventually get a couple wrong and those will ruin your numbers - putting you back where you started, or worse. If you do get lucky, you didn't get lucky on a risk-adjusted level - meaning, well, you were lucky, not better informed than the market at large.

And getting lucky isn't the same thing as having a superior strategy.

Studies repeatedly confirm this EMH framework. So do surveys. So does, well, almost all known evidence. And, it's even getting worse.

This bleak conclusion makes sense - after all, the market is nothing more than a pricing machine, so the more efficient (ie, the more informed the market is - which during the Information Age is going to be pretty damned informed) the market, the less likely you are to beat it.

For anyone keeping score on how well information spreads these days, you have effectively no chance of beating the market, risk-adjusted. Period. Sorry. End of story.

Directly tying this into 'buy the dip' theory

'Buy the dip' sounds good, but like I wrote earlier, it's based on some assumptions that don't make risk-adjusted sense. The biggest one is that you're assuming the dip isn't the beginning of a crash. Imagine if instead of "buy the dip" we said, "buy the stocks right before the bear market wipes you out for about 10 years." Doesn't sounds as clever, does it?

Of course, almost never will the dip end up a bear market. Nine times out of ten, you'll avoid that. But it's that one out of ten that wipes out your statistical advantage. That's the part that confuses people. You're not trying to usually beat the market - you're trying to beat the market on a risk-adjusted level - which is economically impossible.

The same concept applies to the other assumption: the notion that if you can "buy the dip" then you're buying it with resources that supposedly you had access to beforehand, otherwise you would just say "buy" and not "buy the dip." The reference to taking advantage of a specific opportunity in the market and not just buying consistently suggests you've been sitting on the money.

If you sit on money you want to invest in public markets at some point because you want to outperform it, you're missing the economic point - you're never going to perform better sitting on the sides. Think about how many people thought the market was "too" expensive a couple of years ago - they've lost an incredible amount of wealth because of that view.

What this does NOT mean

I spent a lot of time writing about these concepts, but i want to make sure what I'm saying isn't misunderstood as another set of arguments. Here's a quick clarification. I'm not saying anything bolded in the section below:

  • Nobody can beat the market. I'm not saying that it's impossible to beat the market, necessarily. You can beat the market - if you have what's called an "informational advantage." Since the markets reflect known information - information that is known by the market - the way to beat it is to have information the market doesn't have. That's why insider trading is illegal - and it's how congressmen often get rich with all of their special knowledge they can abuse.
  • Private markets are the same. Private markets are utterly different. It's very difficult but still very possible to make more money running a business than the average business earns. This is about publicly traded systems with extremely high levels of knowledge. Private markets are extremely different beasts altogether.
  • The market is "perfectly" efficient. I'm not saying the market is perfectly efficient. Reflexivity, the idea that explains why people often overreact to known information, shows us that markets aren't perfectly efficient. But they're pretty damn close - especially when you account for trading fees and the lost opportunity cost of the time spent investing. My view is what's called the "weak" efficient market hypothesis - it's not perfect, but it's pretty close.
  • EMH is essentially financial populism. A lot of investors love to pretend it's contrarian and anti-mob to reject EMH. They seem to think that EMH is a belief in crowds. That's not quite fair. It's a belief that markets are better information digests and pricing machines than any one person or organization - that's for sure.

Avoiding mistakes is 99% of investing. But enough about the bad news. Let's look at some interesting applications of these ideas that will make you money.

You can't outperform the market, but you CAN outperform the experts

Now here's the cool part. You can invest better than almost every financial genius on earth in a couple of surprisingly simple steps.

You can invest better than the billionaires, the stock-market gurus, the bankers, the college endowment investment managers, the financial planners - you can outperform almost all of them over time.

The way is simple. They're all trying to outperform the market. This, on average, causes nearly every last blasted one of them to dramatically underperform the market for the reasons explained above.

So if you just hook up your portfolio to track the market as cheaply and as consistently as possible, you'll outperform the experts - by default.

All you have to do:

  • Minimize your fees with funds like Vanguard.
  • Get as much broad market exposure as possible with funds like Vanguard.
  • Invest your capital as soon as its available without any attempt to time the market.
  • Rebalance regularly, like every quarter.

Do this and you'll outperform almost every mutual fund on earth over time. You'll outperform almost every equity hedge fund. You'll outperform almost every individual investor.

And you'll do it because of your humility.

Vanguard is an organization that exists so that any 'profits' get passed back to the funds themselves, meaning they are as low fee as is legally and economically possible - in general. Their index funds just try to not beat the market - they're based on the assumption that the market is essentially always priced the best possible way based on all known info.

And it works. Vanguard slaughters the competition easily. It's almost embarrassing for the experts. I'll be writing about this more down the road. Make sure to sign up for my newsletter if you'd like to read more. It's boring, but it's powerful because it's true.

Final thoughts

Don't try to buy the dip. Don't try to make financial gambles on the basis of your market predictions. Build a simple portfolio like the one described above. Don't fight the market - let it carry you itself.

Buy the market regularly regardless of the news. Sometimes, you'll buy while the market is rising. Sometimes, you'll buy while the market is falling. Sometimes, you'll buy while the market is flat. Regardless, over time, your portfolio will get better, and your returns stronger.

Most importantly, perhaps: use economic literacy to avoid big mistakes that you'll regret for the rest of your life.

If you're looking for a legitimate excuse on which to blame everything going wrong in your life, I've got some great news: there's definitely a legitimate excuse for your situation.

In fact, I've never met a person yet who didn't have at least a few major external reasons they weren't wherever they wanted to be with their finances, health, fitness, and/or relationships.

I'm serious. Almost everyone I know has perpetual, legitimate excuses on hand useful for rationalizing every missed goal, every dropped ball, and every small flaw in their life. Excuses on tap.

Almost everyone has major areas outside of their control which consumes their time, energy, and mental bandwidth on such a level that using those areas as excuses would be honest, understandable, and even respectable. Let's review a few common ones.

Here are some excuses which apply to you

Here are some extremely common excuses that you might have access to right now:

  • Gender. This is easy and definitely realistic. If you're a woman, you have a massive minefield you have to navigate that men don't ever have to even think about: being ignored for promotions, getting paid less, people not taking you seriously, people expecting you to not be focused on long-term projects - sexism is real.
  • Children. Children are colossal up-front costs. They demand incredible amounts of time, incredible amounts of energy, incredible amounts of mental bandwidth, and - perhaps most importantly - incredible amounts of rigidity for your schedule. You can't just ignore them for a few days. Your children need you.
  • Spouse. Spouses are very understandably, demanding. They love you - they're your other half. They need you financially, emotionally, and definitely in terms of time. I have literally never met a married person whose biggest struggle when working on a project wasn't their spouse.
  • Horrible bosses. Realistically, your boss is probably an idiot. He probably doesn't understand your worth, is wrong about the market, is wrong about her/his own business, etc. Bosses are rarely empowering. Usually, they squander assets like you. It's true.
  • Lack of money. Don't have money? Then you can't pay for things that are needed to get to where you want to go. Nothing insulting about this - it's just true. If you can't afford to fix your car, then you just can't afford it. Period. Right?
  • Mental health. This is a massive new one. Especially if you're a millennial. You probably have mental health issues. You probably have ADHD. No way around it. There are demonstrable ways these mental health issues are hurting you when it comes to doing what you need to do. You probably don't even know how bad it is - it's probably worse than you realize.
  • Bad schooling. If you went to a horrible school, that will stick with you for the rest of your life. Starting your life on the wrong foot can mess everything up. Bad math teachers in high school? That hurts you as an adult because it's not as easy to learn when you're older. It's just a fact.
  • Poor family. Most won't understand what it's like growing up poor. There are so many disadvantages that live with you, it's impossible to list them all. Educational, networking options, health options, the ability to see the world - poverty puts you at a permanent disadvantage. Even as an adult, the disadvantages will pop up repeatedly.
  • Lack of parents. Didn't have a strong father figure in your life? That'll leave a mark. Bring up that baggage down the road and everyone you know will be understanding as you explain how that stopped you from achieving certain goals. They'll be right, too. It's huge.
  • Bad parenting. Were you slapped around? Emotionally abused? Emotional abuse can be the worst. It can cause hell in your future relationships, business endeavors, and in almost every other area of life. It's legitimate, too. Your childhood is extremely important to your chances of "making it" in the world.
  • College debt. Massive student loans? They can ruin your life. They can make you less date-able, can force you to live somewhere you don't want to live and require you to become more dependent on low-end jobs than you'd like. Debt is slavery, after all.
  • Lack of privilege. This is a great one. Just Google "list of privileges" to get a list of endless excuses. Unless you're a straight, white, rich, well-educated, perfectly mentally healthy, Christian male, you'll find all kinds of good excuses after a few minutes of browsing. Check out Tumblr, it's a goldmine.

These are just the major excuses. Smaller ones are even more plentiful and just as legitimate.

Late for something? There was someone in front of you going too slowly. Miss a morning deadline? Your computer was giving you problems for a full 20 minutes. Ignoring the emotional needs of your significant other? They were rude earlier, and it's drastically easier to just give them the silent treatment like you were raised. Going into debt every month? Eating out a few times a week is not unreasonable.

Application: You have major things going wrong outside of your control

If you have a somewhat normal life, then you're probably going to have a couple of mental health issues, a couple of kids, an emotionally needy spouse, and a lack of money. These are major excuses that, if you use them, nobody will blame you for the problems they will cause. If anything, your friends will bring them up to help you rationalize things whenever life goes south.

Heck, if you called me right now and told me your situation, I'd probably even go along with the excuses. They're legit. You have tons of them. Everyone will agree.

This is why the whole social justice movement is growing so quickly with young people. Because they're right about the oppression, kind of. This is true even on the smaller level we're talking about. In almost every negative situation, something else - outside of your direct control - is causing the problem on a major, fundamental level.

In fact, the general narrative behind excuses is all wrong. Most people believe that the default is things going correctly and that when something bad happens, that's the unknown variable that caused things to go south - that's why it's the excuse. Excuses are seen as exceptional events outside of one's control.

The truth is the opposite. In the same way, some people see "privilege" everywhere, the other side of that coin is to see legitimate excuses everywhere. Bad things happen to you constantly for legitimate reasons outside of your control.

That said, the purpose of this article isn't what it might look like right now. In fact, the real lesson is the opposite of how most people take these lessons.

Excuses are when you choose to narratively surrender to an obstacle

Obstacles are inevitable, but excuses aren't.

When something goes poorly and you have the choice to blame the external cause or find some flaw or area of potential improvement with yourself, err on the side of choosing yourself - while also learning about the external source as well.

This puts you in a perpetual position of learning from failure rather than a cycle of repeating failure.

There is no strategic value in excuses - even legitimate excuses. There is a strategic value in understanding your disadvantages. Understanding your disadvantages is good, but an excuse is when you reject understanding the disadvantage in favor of surrendering your personal narrative to the disadvantage.

That distinction is the difference between an obstacle being a problem you overcome or the defining characteristic of your ruined, wasted life.

Think of your daily life like a general who surveys a potential battlefield: only a fool would ignore the terrain, but only a bad general would see the terrain as either good or bad without considering his options for navigating said terrain. You're the general of your life. So act like it.

An excuse is when someone surrenders their entire identity of being a strong, independent, strategic human being in exchange for telling their boss someone was driving slightly slower than normal in front of them. Excuses are pathetic, strategically useless, and are, ironically, a major personal flaw that causes major life harm.

This bears emphasis: excuses - surrendering to legitimate obstacles - is a reflection of your flaw. That means that the wrong mentality takes the understandable blame and shifts it from that external cause and points it right back at you: the foolish general.

It's important to understand the obstacles you face, yes. But that's not the same as surrendering to them and believing that those obstacles are the unmovable, unchangeable catalysts of the inevitable undesired outcome.

Scroll up and look at that list of excuses. Now, look at it as a list of possible disadvantages that one can overcome. Now one's entire outlook on life shifts drastically. You become more powerful when you realize you have the power in the first place.

Important: "Blame yourself first" is not the same as "victim-blaming"

The point of this article isn't to somehow suggest that you should ignore when you are, in fact, being oppressed. The concepts described don't mean you shouldn't care about things like unequal pay, abusive parents, or any other situations where you truly are being victimized. That's not the point at all.

It's also not the point of this article to shame you for not "overcoming" every situation. I wouldn't have been as successful if I'd grown up as a black female in 1930s Alabama. Some things are beyond our control. That's just a fact.

It's not a mental "trick" to suggest people should blame themselves over situations for which they aren't responsible. Sometimes structural, and macro changes are necessary.

"Victim blaming" and "blame yourself first" aren't remotely connected.

In "victim-blaming", you blame the innocent person for the actions of the guilty - and entrench the problem.

In "blame yourself first", you seek to understand the catalysts of the unwanted final result, and then act to minimize the unwanted final result as much as possible - and prevent it from happening again.

That's why it's "blame yourself first" and not "blame yourself only."

If you're only partly to blame, focus on what can be done on your end to change the outcome. But don't ignore the problems caused by external sources - and don't accept blame for what is not within your control.

Of course, if you aren't to blame at all, then don't blame yourself at all. Sometimes, there's nothing we can do and we can't fix a broken situation. These ideas are about empowering you, not enslaving you to unjust blame.

Application: How to "blame yourself first" correctly

Let's look at a real-world example.

If you're the CEO of a company and someone running a department makes a series of horrible decisions that severely damages their department, then you should immediately figure out what you could have done to prevent the problem, what you did to cause the problem - if anything - and what you can do to minimize the current damage.

You begin by asking yourself the following questions:

  • What systems did I set up in the place that created the unwanted outcome?
  • What bad behavior did I enable that created the unwanted outcome?
  • Why didn't I put a stop to the problem before the final unwanted outcome?
  • What could I have done differently to have stopped the unwanted outcome - automatically?
  • What can I do that will fix the unwanted outcome right now while minimizing long-term problems?
  • What can I learn from this situation that I can use in future situations so I can avoid future unwanted outcomes?

That might mean realizing that you made a mistake in hiring for the position. It might mean you didn't put the right processes in place. It might mean you should have communicated better with the department head. It might mean many things.

What it shouldn't mean is that you should just blame the department head and ignore all culpability - direct or indirect. Blame yourself first weaponizes the fact that you can only, in the end, control your own decisions - and that's where the brunt of your analysis should be for fixing problems.

Even when someone else is to blame, "blame yourself first" results in a more comprehensive, total awareness of what occurred and how to minimize the damage.

In business, this really is an effective "hack" for almost every situation.

Lifehack: Blame yourself first, even if there are legitimate reasons to not

An excuse is when someone driving slow made you late for work. An obstacle is when someone drove slow in front of you - but your day was so organized that you still made the deadline because you (almost) always have the ability to arrive a little early through good planning.

In plain English: just because there's an external cause for something negative in your life, that doesn't mean that you don't have options for getting around that cause - even if the solution might seem "extreme" to others.

Just because you're poor doesn't mean you have to stay poor. Just because you're poor doesn't mean you can't compete against wealthier people. Just because you're poor doesn't mean you can't use that experience as a leverage point when dealing with others.

Just because you didn't have a father doesn't mean you have to have the "daddy issues" of someone who didn't have a father - sometimes, those who were fatherless become the best fathers because they trained themselves to use that pain and emotional vacuum as an energy source.

Sometimes, your biggest disadvantages and obstacles can become your biggest advantages and strengths. But you have to blame yourself first in order to rule over your life well. This is the beginning of a good personal strategy.

With a good personal strategy, even our weaknesses become untraditional advantages.

A fundamental part of a high-school education in America should involve understanding personal finance, the true cost of credit, and how delaying consumption for a few years can be the difference between financial hardship and an early retirement.

I don't mean a class or two of textbook information about how credit works. I mean actually teaching the principles of financial discipline.

We need a producer society focused on creating value - not a consumer society focused on taking as much as possible. Think: thrift and productivity as a culture.

Consumerism has become one of the most destructive quasi-religious elements of modern culture. People identify themselves on the basis of what they consume - not what they do or who they are.

That's why the following should be taught as a comprehensive part of high-school - and heck, college - education. Not just a single class, but as a fundamental approach to finance whenever it comes up, referenced throughout curriculum, branding, and materials.

For example, here are some thoughts that could be developed either through in-depth explanations or specific tutorials and hands-on guidance:

  • To build wealth, spend less than you earn.
  • To become wealthy, delay spending and maximize your savings.
  • Compounding returns means the younger you start investing, the better.
  • One of the most expensive things in life is a failed marriage.
  • College loans make sense, but only when mixed with calculated career decisions.
  • Debt rarely makes anyone any money - besides the lender.
  • Credit is when you have the money to pay it off if you want. Debt is when you are relying on future earnings. One is basic finance; the other is slavery.
  • Professionalism and basic work ethic should be applied to every job, even entry level - someone will take notice. If not your boss, then a potential future boss. People are watching.
  • Basic psychology reveals that people tend to normalize what they're used to - that's how consumerism bankrupts people.
  • The principles of financial discipline should be seen as just as important part of a well-rounded education as mathematics and English.

Building a culture of thrift is possible, but it requires focusing on just that - culture. Finance isn't just about math. People have to begin, as early as possible, to understand that not all consumption is "reasonable." We should view consumption with suspicion.

I say this as someone who was a millionaire for years before I bought a new vehicle. I live in a small house that I renovated. My biggest luxury is an occasional $15 cigar. This doesn't mean I don't live well - I live like a king. I just don't mindlessly consume.

The crazy thing is that basic personal finance teaches us to reject consumerism and ironically helps us achieve a much better lifestyle. Rather than spending money on things we don't need, we find freedom - and more money down the road to spend on experiences and a good life.

Good personal finance turns money around so that rather than us being enslaved by the economic system, we're using the economic system to maximize our own options, happiness, and legacy. It's incredibly powerful.

Consumerism is one of the most destructive forces in modern society. It takes potentially free people and enslaves them to empty consumption, constantly increasing their standards for what they believe "normal" people should be able to consume. The end result is an impoverished society... surrounded by material wealth.

Good finance is critical to a good life. That's why so many philosophies - from the book of Proverbs to Stoic thought - emphasize contentment, self-control as something to practice like any other skill, and a lifestyle of discipline.

What better place to develop a strong culture than educational institutions? What use is an educational institution that doesn't educate on the fundamental ideas, concepts, and identities that are key to every other part of society's prosperity?

Imagine every high school student becoming intimately familiar with these concepts. It would transform the world.

Mark Zuckerberg has announced that he wants to shift Facebook away from "passive" content to more active, "engaging" content. In other words, your Facebook newsfeed will soon replace the content that you might merely click on with content that you and your friends are more likely to engage with.

In other words, the pages that post 30 times per day hoping they can monopolize the newsfeeds of their "readers" will be penalized. Facebook traffic is going to shift heavily to brands that are dramatically more engaging.

Of course, this transformation has led to instant backlash from a wide variety of internet publishers --  probably because they don't really understand what Mark was saying, why he said it, or what the consequences of Facebook's easy-to-manipulate passive content ecosystem have been so far.

But First, a Little Disclaimer

I founded one of the most popular political websites in the world. It began with an important mission: speaking truth to power by giving a voice to the forgotten middle class.

In the past, I wrote headlines for articles that reached over 15,000,000 users on Facebook. From a single posting. On a single page.

I've written articles that have been read by millions and millions of people from Facebook. No, I don't mean "seen" by millions of people. I mean millions of people clicked on the actual link and read the message crafted to influence their political interpretation of the world.

My site's style focused on the sizzling elements of stories that the Wall Street Journal and even Fox News didn’t want to cover. It was a perfect marriage with Facebook's algorithm because it ignored branding and focused on whether users would click on stories.

It was good storytelling. It was fun. And it worked frighteningly well.

Realistically, my personal headlines and articles had drastically more reach than the entire "Russian interference" scandal covered by mainstream outlets like the New York Times. So when it comes to the algorithm change and the implications, I'm speaking from the position of someone who has utilized this algorithm more than almost anyone on earth.

Still, the ecosystem that allowed what I was able to do is now mostly gone - and that's a good thing.

A Personal Transformation

Visionless people look for consistency regardless of context. Some want the ecosystem that existed 4-5 years ago to be all that exists going forward. That's disturbingly short-sighted.

In the past, alternative media needed a huge boost to shake up the narrative. Now we're in a weird place where those same alternative media brands acquired too much power, and we need to change things again.

I now run the Conservative Institute, a very different project. It seeks to provide reliable, trustworthy news for conservatives in an era where dishonesty has become a fundamental pillar of the right-wing media ecosystem. The goal of CI content is not to "go viral" - it's to simply tell the truth. Accuracy is the primary goal, come what may.

We don't defend Trump when he's wrong. We don't attack liberals when they're right. We only report what we believe to be important stories that should circulate on the right wing - and everywhere. A typical article will link to sources like the New York Times, federal agencies, and PDFs of actual studies.

Now, Facebook seems to be responding to the same basic issues that CI was built to combat: a social media ecosystem that replaced high-quality, investigative journalism with shallow "passive" content mostly ripped quickly from other - often just as shallow - sources.

To better understand what's happening, let's look at the following basic concepts that provide context for the Facebook change.

FACT: Facebook's easy reach was a historic anomaly.

Never in the history of the world was it so easy to reach so many people with a message.

I know people who had no experience in marketing, journalism, research, or much of anything else, reach thousands of people with low-quality stories mostly lifted from other sources.

In fact, ripping off my projects was a pretty easy way for someone with no talent or instincts to make a healthy six-figure income. It happened frequently.

That entire system was incredibly powerful for shaking things up. Now, we're in a different situation - the balance has shifted from the Associated Press, NBC, and local newspapers to an army of smaller sites that often spread misinformation, nasty accusations, or outright lies. Another way to describe it? Fake news.

The algorithms that decided how many people would see content didn't account for "accuracy" at all. Who cares if a fake story goes viral? It was getting the clicks and shares it needed to get more and more traffic on Facebook. That's a massive design flaw, especially when alternative media became so powerful.

This was a temporary hiccup in world history. "Alternative" and "mainstream" media aren't the future - quality media is, regardless of where on the political spectrum it may fall.

FACT: Facebook's easy reach catered to the lowest common denominator.

Everyone has an ignorant family member known for accidentally sharing fake news stories they didn't verify. The idea that a global media distribution system should give that person just as much power as someone who isn't as gullible is absurd.

I don't mean this in a condescending manner at all. I'm ignorant of many things just like you are. But many people simply don't have the time or expertise in media and geopolitics to know what source should be considered "trustworthy" and what source is taking them for a ride.

If anything, this system isn’t  even fair to the person falling for the fake news - the distribution system should minimize the lies that show up in that person's newsfeed as well.

Some will huff and puff over what I just said, pretending they deeply care about ignorant people having the right to easy access to fake and misleading news. The problem is that this is mostly bad-faith virtue signaling.

Let me be blunt: passive-content farms/publishers don't respect their audiences. They often laugh at them. It’s easy to get rich off of people who don’t know any better.

Those market incentives are largely gone, and that's a wonderful thing.

FACT: Facebook's emphasis on "passive" content is most of the problem.

"Passive" content is content that requires no investment from the reader. You don't have to have any kind of relationship with the brand or the content. It's content that happens to be in your feed, and you just may find it interesting enough to click on and read without comment - or not. Most of the content in your newsfeed is like this.

You probably have no emotional connection to the brand and if you click on the story, you may skim it or watch some video, and then exit out and never think about it again. No comments, no shares, no personal connection - nothing. It's passive content.

"Passive content" is where fake news comes from. It's the ecosystem that allows fake news to flourish. It's the system built on a series of economic incentives that allow bad faith publishers to make money manipulating you for fun and profit.

There are a few brands that manage to engage me with almost all of their content; Tim Ferris, Ryan Holiday, Bloomberg, The Art of Manliness, etc. I engage with their community, share their links to my personal page, and have a connection to the brands themselves. They don't just happen to show up on my feed and trick me into clicking.

I have a deep appreciation of the personalities behind the content. That's vital. That's good. And that's the future.

FACT: Good-faith, high-quality brands have nothing to fear.

If your business model is based on easy traffic from one website, that's your problem, not Facebook's problem.

As the founder of Axios said to the Wall Street Journal:

"Facebook is a public company that controls its own decisions... Publishers should do the same damn thing."

This isn't new. Copyblogger, (a resource any content marketer should see as kind of like a regularly updated Bible), wrote years ago:

"If you're relying on Facebook or Google to bring in all of your new customers, you're sharecropping. You’re hoping the landlord will continue to like you and support your business, but the fact is, the landlord has no idea who you are and doesn’t actually care."

The future will still have plenty of content. The future will still have plenty of news. But it won't be low-quality content lifted from other sources without any attempt at providing extra value like additional context, additional sources, or additional facts.

The future belongs to quality publishers with strong brands and vibrant communities. This is the way it's been for centuries - and this is the way it will continue to be for centuries more.

If Facebook's change is going to harm your business, then discover higher-quality, more long-term oriented workarounds. Build an online "TV" show. Launch a podcast. Write a book. Go to other platforms. But don't blame Facebook for not allowing you cheap access to a gravy train.

The Clipper Ship Strategy: to make money during a gold rush, focus on supplying a secondary demand created by a primary boom. Chances are, it'll have drastically less competition while being just as lucrative.

Cryptocurrencies have a similar situation unfolding. Everyone is trying to get rich buying the 'coins' in order to sell them to someone else later. This is extremely risky, and just as many people will get wiped out as will make money. It's one thing to buy bitcoins if you're worried about a paradigm shift (like I described in my 2013 article on Seeking Alpha). But it's another thing to buy Bitcoins hoping it's your personal gold rush.

Trying to strike gold - or its digital equivalence - is for suckers or extremely skilled speculators. Chances are, you're not one of the latter.

Here's the real way people are making money with cryptos:

  • Sell shovels. If you understand basic marketing, funnel building, and content creation - and you should - you can sell information about cryptos and make dramatically more money with dramatically less risk than buying the coins themselves. There are more millionaires being made explaining how to invest in cryptos than there are directly buying the cryptos themselves. This is a pretty basic example of the Clipper Ship strategy.
  • Use the technology. Do what Ripple is doing. They came up with a business model that uses the paradigm-shifting blockchain technology to do something useful. Now they're valued at something like $80 billion. They want to revolutionize the international money-movement industry, which means countless hundreds of billions - if not more - are at stake.

Either way, whenever you see a gold rush, don't fall for the trap. Don't go for the bait. Don't become a miner. Find a way to build wealth by looking for the second opportunity - it's probably being overlooked by others and there's more room to grow and profit.

When Caesar ordered that statues in honor of Pompey be restored after they'd been torn down, Cicero wisely informed him, "You have restored Pompey's statues, but you have made your own secure."

In other words, because Caesar acknowledged that his enemy still deserved his statues to be established, he wasn't weakening his position or legacy at all. If anything, it was a step towards ensuring that even his enemies would acknowledge him for well-earned accolades.

In the same way, if a certain president made a comment about a controversial topic that I agreed with, I would intentionally make it clear that I understood his point and agreed with it. Not because I am now in agreement with everything he says, but because such an approach pays dividends in the opposite direction should the shoe be on the other foot, in other words.

A collapse in good faith when it comes to appreciating goodness even in our enemies will lead to extreme political division and eventual massive fallout. For example, just take a look around the world now. Radicalism and pettiness go together.

Check out the new design. I've been wanting to fix the site for a long time and finally had the free time to knock it out.

The site should load in well under 1 second for most US users. The design was created to emphasize content for future essays and long-form blog posts.

I'll be blogging about amateur philosophy and business soon. Stay in touch by signing up for the newsletter.

Shaun Connell has built multiple 7-figure earning businesses, including one with a successful multi-million dollar exit. He's obsessed with wealth building, investing, entrepreneurship, and Stoic philosophy. You can learn more about Shaun by checking out his essays or project list.