Can you really get rich quick?
Well, let’s see — get-rich-quick schemes have probably been around for, oh, as long as people have had money, and most people still aren’t rich. But people never learn! Look at all the flotsam on YouTube: Successful-looking guys who came from nothing and supposedly made easy money, the method of which they’re happy to explain to you, often for a small fee. The fact that they’re spending their time creating content on YouTube for nobody in particular instead of going off and being wealthy somewhere should be the first red flag, y’know?
But how do you actually get rich, and how quickly can you do it, outside of inheritances, lottery winnings, selling a blockbuster screenplay or trafficking narcotics? With coronavirus rampaging through the economy like the goddamn T-Rex in San Diego at the end of The Lost World, you’re sure to see more ways in the near future to supposedly get rich quick. After all, when people get a little desperate and the normal rules and ways of life are upset, that’s when hucksters thrive. Alongside Philip Olson, a certified financial planner, co-host of PBS’s Two Cents and cultivator of one of YouTube’s more impressive mustaches, we’re looking for some moderately-priced answers.
First of all, why is it so hard to get rich quickly?
It’s because of “efficient markets,” according to Olson. “Meaning, if there’s enough people and information in a space, then all the cheap, quick, low-hanging fruit will disappear really fast. Then you settle into a place where goods and services are properly priced. It’s a good thing, but it also means that shortcuts are hard to find.”
That’s not to say that every market is efficient, Olson adds. When things are new, or if they’re obscure enough, there may be inefficiencies. But as a general rule, most of the time, in most arenas, markets are pretty efficient.
I can’t bring myself to watch any of that get-rich-quick shit. What are they actually trying to sell to people?
Olson actually devoted an episode to this. Generally, it’s going to be some kind of secret, insider knowledge, and/or possibly some kind of arbitrage play. It might be how to buy real estate at a great deal and flip it fast (what’s known as real estate contract flipping) or possibly how to pick a hot stock. The thing is, if their inside knowledge is true, it’d probably be illegal (i.e., insider trading), Olson says. So either it’s not true — or it is, and you’ll be in jail. Kind of a no-win situation!
Beyond stock speculation, sometimes there’s even tips for trading on margins, which means you’re taking out a loan to speculate with. This is the sort of risky thing that makes the hairs on the back of Olson’s neck stand up when he hears about it.
What’s wrong with stock tips in general, though?
The thing with stock tips is that by the time you or anyone who’s neither an insider nor has expert-level knowledge in a particular industry hears about a hot tip or an upcoming trend, the advantage is already long gone! (If it was even true in the first place.) Whether you were once interested in cryptocurrencies before they drove off a cliff like Geena Davis and Susan Sarandon, or cannabis stocks before they flooded the market with a dull thud, sorry — you were probably too late anyway.
So what’s the difference between legitimate and illegitimate financial advice?
It’s a fine line! And it’s one that really frustrates Olson. The average person can be forgiven for not being able to figure out what’s real advice and what’s shady — people come to him all the time asking whether they should invest in this or that. “And I’m essentially a professional cold-water dumper,” he says. “And that’s not fun to tell people, but it’s ultimately right to tell them that.”
His peers sometimes don’t help the situation, however. “I know there are financial advisers out there who skirt that line by saying, ‘Well, you shouldn’t necessarily invest in cryptocurrency, but I have this really fantastic portfolio I’ve made and you can only get it through me,’” he says. “It’s really not that far away from being the same thing.”
What’s up with the guys trying to sell us stuff, then?
Olson shares a story about a networking event he attended a while back. One man was offering a training course on foreign currency trading. Olson remarked that it sounded risky, and the man assured him of the fabulous amounts of money he makes every week. “I said, ‘Well, why are you here?’” Olson says. “He took a second and said, ‘You know, I just like educating people.’ That was a pretty cool comeback to play it like that, but it struck me as unbelievably slimy.”
The truth is that most people just don’t ask the question. They see the offering through the opportunity, and just trust the seller. Much has been written about how we as humans are evolutionarily adapted to be trusting of people, and it will actually get you further in life. But of course, it can also result in people being taken advantage of.
So can you really get rich quick? If so, how?
You mean legitimately? Olson says there are no real secrets. They’re usually not very exciting, either! It generally comes down to being in business for yourself — being an entrepreneur or otherwise setting out on your own. “It’s a little risky, but it’s also very slow and it’s not always fun — you have to sign up for the grind,” Olson says.
Nevertheless, it’s the closest thing there is to carving out your own destiny. To build wealth from nothing generally means doing work that adds value to the world on your own that didn’t exist otherwise. Going on that journey and sweating that sweat, getting that education and graduating from that school of failure, “that’s one of few opportunities out there to kind of beat the pack, if you will,” Olson says.
Olson points out that if you look at people who’ve been genuinely successful without conning people, it’s almost exclusively people who were either born rich already, or people who started something new that didn’t already exist.
That’s risky, though, right?
It’s certainly riskier than the slow and steady path of working for a company in order to rise through the ranks and become a manager. That’s the safest and most reliable way to do fine, and many people do. Sure, the entrepreneur path is more risky, but not nearly as risky as speculating — throwing your money into investments in industries you know little about.
When you run your own business, you can start small, you have a lot of control over it (including the energy you put into it and the research you do). “Throwing money after the next hot thing is the surest way to get chewed up, because that to me is along the lines of playing the lottery or whatever,” Olson says.
So the secret, as ever, is that there are no real secrets. But if you happen to invent one, you can always take it to YouTube, cast your line and see how many suckers bite. You won’t be the first, and you certainly won’t be the last.