The Forbes Top Billionaire List just came out yesterday, and showed there are now over 1,400 billionaires, 200 more than last year. On top of that, just to be considered in the top 500, you had to be worth $2.9 Billion!
At the top of the list (4th year in a row) is Carlos Slim, worth $73 Billion! I remember watching his interview with Larry King in 2010, where he discussed his family, his down-to-Earth lifestyle, and his philosophy on life & business. One thing that he talked about really struck me hard
"Reinvestment, reinvestment, reinvestment! My father used to say that money that gets out of the company evaporates."
Think about his for a bit. Is he saying to invest in our businesses? What about diversifying?
Hearing this helped me recall the words of a candid brother-in-law, when I used to be a financial advisor, who pointed out to me that he can make a lot more money investing in his business than in the stock market.
When he asked, "So Chris, why should I invest my money with you?" I quickly replied off the cuff, "Because you should diversify."
What a bunch of bull, huh? Where did I come up with that? Oh yeah, being trained as a financial advisor ;)
Fortunately, he never did invest with me because he was absolutely right! Why invest in things you can't control or don't understand or care about?
Only invest in things you love and know a lot about!
If that's your career or business, then do that. If it's real estate, then do that. If it's the stock or currency markets (yes, there are some crazy people out there), then do that.
Diversification, like multi-tasking, doesn't really work!!!
Mark Cuban, owner of the Dallas Mavericks, TV star on ABC's "Shark Tank", and worth $2.4 Billion (#613 on the Forbes list) was quoted as saying in an interview,
"Diversification, that's for idiots."
Robert Kiyosaki said that diversification is like going to a used car lot, and buying 5 cars, just in case one is a lemon. I've watched people, including myself, diversify and lose money. That's why trying to get multiple streams of income all at once only ends in failure.
Instead, I propose that we focus our attention, time, and energy on things that we know and love.
If you're an entrepreneur, hopefully that means it's your business. If you love and know real estate well, then do it, and stop dabbling in other ventures where you have no business.
A few years back, I thought it would be fun to manage 5 businesses. I know what you're thinking - It was crazy! And you're right, it was! My income dropped overall, even though I had more streams of income. When I cut it back and focused on one or two facets of my business, my income shot right back up.
In the book, Midas Touch, by Robert Kiyosaki and Donald Trump, they teach that the word "focus" stand for:
I agree with that 100%. If you're the type of person that can't decide what you like, you're going to be met with hard times and challenges. Find something you know well and very passionate about, and do that!
My challenge is for you to focus on one thing and make it successful. Remember, a certain Shaolin monk once said this:
"I don't fear the man that has practiced 10,000 different punches one time each. I fear the man that has practiced one punch 10,000 times."