Become A Rogue Investor
"We owe almost all our knowledge not to those who have agreed, but to those who have differed." - Charles Caleb Colton
I think anyone would agree that Rogue Investor is a curious title for a book on stock investing. After all, a "rogue" implies someone or something that chooses to break away from the group with total disregard for the established order. Conversely, an "investor" implies a level of financial knowledge presumably above the common rogue. However, these seemingly contradictory words have a deeper meaning when you are trying to determine how and why some individuals achieve financial success.
Ask two of the richest men in the world, Bill Gates and Warren Buffet. More importantly, ask successful, happy people regardless of their ranking in the world. How did you do it?
You will get a variety of responses, but there will be similarities. Gates and Buffet would likely say own successful companies. Most wealthy individuals would echo this response. Many successful people also would agree that to reach your full potential in life you must work at it and not be afraid to be different.
The not being afraid to be different is probably the most important and most difficult part about success in investing and life. That is because most everyone in modern society is conditioned to fit in the middle of the bell curve. Questioning conventional wisdom goes against our training and requires more effort than most of us have the will or time to undertake. However, by definition, the two percent of the population that controls more than 75 percent of the wealth must have done something different than the majority to reach and maintain their status.
Bill Gates dropped out of Harvard to start a personal computer software company when, for all practical purposes, personal computers had not even been invented. Warren Buffett, stock investing billionaire, largely ignores financial activities on Wall Street. Sam Walton, the late billionaire and founder of Wal-Mart, drove a used pickup as his company vehicle. The list of successful rogues is very long because, according to the societal norm, successful people are not normal. Once you realize you must become a "rogue" by thinking and acting independently of society, you are well on your way to becoming a success.
The underlying meaning in the second word, "investor," is equally important to the process of becoming a financial success. Unfortunately, the concept of investing usually is not conveyed properly in our society. This is because most financial knowledge is influenced heavily by big money, primarily large corporations and the media. These two entities are most able to control and influence communication, including education.
Corporations influence us by controlling the flow of money into basic education and research that best serve their interests. As a result, our educational system spends more time training us to be employees, rather than providing the basic knowledge we require to function successfully as individuals. Corporations also have a financial interest in convincing the public that they are incapable of understanding the knowledge required to invest their own money. The popularity of stock mutual funds is a classic example of corporations convincing the public that they should pay for a middleman to buy stocks for them, even though year after year more than 75 percent of all stock mutual funds produce below average returns.
The media also suffers from a public welfare investing conflict of interest. The media must create headlines and sell advertising space while appearing to be sympathetic to the individual. The result is at best confusing. It is also usually conflicting, portraying the media as financial experts teaching the generic consumer how to make financial decisions. The media's emphasis on current events also encourages bad investing habits by making society focus on short periods of time that have little or no influence on the longer term process of creating wealth.
As best described by Benjamin Graham in the classic book, The Intelligent Investor (1985), "investing is much different than speculation, requiring enough knowledge, margin of safety and passage of time to make an individual reasonably sure of a positive outcome."
These immortal words of advice cannot be overemphasized. The rest of this book will demonstrate that the difference between financial success and failure rests on your ability to think and act independently, control your emotions and become an investor according to Graham's definition.
**Please note that a sample chapter for Rogue Real Estate Investor Collection (including the Tax Liens) is not currently available.