This is my summary of the book The Ten Roads to Riches (Affiliate link). Keep in mind that this is my summary, i.e. it may not be an accurate summary of the book.

Preface

The book starts off with a very concise Preface, which hashes out the contents of the book. Ken Fisher argues that getting rich is not wrong, and there are ten and only roads one can follow to become rich. Fisher says defends the existence of 10 roads based on his experience, given his 36-years old career, studying wealthy people; essentially, every wealthy individual fits into one of these roads (or a combination of them). Fisher also distinguishes his book from the books that explain the road “live frugal and save”, which is in fact covered in his book (Chapter 10). The Preface also enumerates all the roads upfront, advises for some parts looking offensive and puts the concept of richness under perspective.

Chapter 1: The richest road

Ken Fisher argues that the richest road to riches is to fund your own firm. He points to fundamental questions that you should raise when starting a business. Then, he stresses a very important point: you should start small and then grow your company, thinking about scalability all along. Growing a company is all about creating a newer or better version of a product or service, according to Ken Fisher. He shows many examples of that, from Will Kellog, creator of the corn flakes, to Charles Schwab, who brought discount brokerage to the masses. Ken Fisher also says that a company can be build to last or to sell, and what should be taken into account for either path, keeping in mind that building to sell is easier than building to last. The forth crucial question that Ken Fisher raises pertains to financing the creation of a company, and in particular, whether you want to bootstrap or finance, and what are the pros and cons of both. Ken Fisher also spends a great deal of time talking about a very valid point – at some point you will be sued, attacked, and sued again, as it comes with the territory. He shows some examples of persistence and victory in this regard, such as Nike’s founder who kept “Just doing it”. There are tips that I liked particularly, such as quitting (from your job to specific tasks for your company), which is common among founders. At the end, the “Guide to being a founder” sums it all up in a very easy and simple way: 1) pick the right road – what value can you add and how, 2) start small but think about the scalability of the company, 3) innovate or improve, 4) build to sell or to last, 5) bootstrap or find financing, 6) go public or stay private, 7) ignore naysayers, 8) be a quitter and 9) never quit your clients.

Chapter 2: Pardon Me, that’s my throne

Ken Fisher identifies the second road to the riches as being the CEO of a company. Fisher brings one point upfront: being a CEO is not easy; while the successes are rarely directly attributed to CEOs, the CEO “is the bastard”, always. First off, you should know that it takes a while to become a CEO. Fisher points out that the most important CEO trait is leadership. In that context, Fisher tells the story of his father – an Asperger’s sufferer – and why he himself was given the nickname “Poco”, Spanish for “little”. A great contribution of this Chapter, is, in my view, Ken Fisher’s views on how to lead a company – from the front, as Julius Caeser did with his troops, not from behind. Here, Ken Fisher tells his own story and the jobs he had, until he comes to Section “How to Lead” which makes, in my view, critical points: leading is to make the troops care: “show up, care, focus on people, be there – early and late”. If you’re with your employees, fly coach too. Ken Fisher than explains what options you have to become a CEO, and what deals they often negotiate upfront and end up rich, even whenever they are fired. At the end, Ken Fisher summarizes the guide to becoming the Chief: 1) Enjoy what you do, 2) at first, aim small, 3) get the job (with one of the four options Ken Fisher provides to become a CEO), 4) lead: show up and do it!, 5) …from the front and 6) spend time with your lowest employees and smallest clients.

Chapter 3: Along for the ride: ride-alongs

This chapter is about the ride-alongs, people at the very top of the hierarchy in companies, but below the CEO. The chapter opens up with the perfect example of a ride-along who made more money riding along than 99% of the entire world population: Charlie Munger, Warren Buffet’s sidekick. Ken Fisher provides a few reasons why riding-along is a road to riches; first, you can make fortunes riding-along, as Ken Fisher illustrates with people achieving millions in one-year pays. second, there are more opportunities to ride-alongs than CEOs (as one CEO has many ride-alongs). Third, its easier than being a CEO, as there is less risk, tension and personal sacrifices (Ken Fisher often points out to the time spent with their families). Fourth, some people lack what it takes to be a CEO. Ken Fisher then stresses the fact that you have to pick the right firm – you’ll be there awhile. You can pick a relevant field or a not-so-relevant one. You can pick an established leader to start your ride or an entirely new venture – both have pros and cons. Pick the right horse (CEO), though! In pages 51-52, Ken Fisher provides several tips on this. Be loyal, but give feedback honestly. This is more and more valuable because it has become scarcer. Be flexible – you need to know every aspect of the company business model. Have a “will do” attitude, not a “can do” attitude: if you’re told you’re going to a new place you really don’t know and to do something totally new, you say “Yes, great, I will do that.”. Ken Fisher provides an example of a wealthy ride-along at his own firm: Jeff Silk, who is worth >$150m. Finally, the chapter closes with a guide to Ride Along, which summarizes the information above.

Chapter 4: Rich and Famous

Ken Fisher starts off by identifying the 2 key components of this road: talent and mogul. While talent is rare, media mogul is easier to attain. The problem of talent is that even very talented people started off really young. Take Tigger Woods, who started to play golf at 2. Ken Fisher stresses that starting young is crucial, but it is not impossible if you start later, as he exemplifies. You need to sell yourself. Don’t say no to gigs. Find an agent, but watch out for scams. Play for free in the beginning, if you’re a musician. Build a list of followers. The Sporting life is also a possibility, although a hard one. In page 65, Ken Fisher provides the recipe to become a pro athlete. Sometimes, persistence has nothing to do with financial success. The numbers are shocking when comparing the number of acting jobs and the number of actors. Even at some point very famous actors flamed out at some point and ended up working as bartenders. And the same goes for musicians and athletes. Even super known actors don’t accumulate astronomical wealth. Brad Pitt made $35m in 2006 and that is about as big as you get. Don’t forget the no-privacy point. Ken Fisher says that becoming a media mogul is a more reliable way to wealth and celebrity, plus they are far richer. Fisher provides many examples, from Michael Bloomberg, Bloomberg founder worth $11.5b, to Steven Spielberg, worth $3b. Fisher also points out that there is only one major mistake on the road to Mogul-ness: not diversifying. In particular, Fisher points out that newspapers are hot once, but may themselves flame out too. A notable example of a well-diversified is that of Jay-Z. In page 75, at the end of the chapter, Ken Fisher sums it all up and provides the recipe to be a rich talent: 1) start early, 2) have responsible parents and/or management, 3) be responsible, 4) understand how much you’ll need, 5) get a big contract and 6) repeat on and on. As to be a big mogul: 1) understand the market, 2) buy low and sell high, 3) diversify and 4) buy a sports team (Fisher has no idea why this is important, but seems to be a unifying factor for moguls).

Chapter 5: Marry Well, Really Well

Ken Fisher points out that marrying for money is not new. He points to a case in his own family to illustrate his point. After that, he teaches how to marry a billionaire. Rule number one: location, as in real estate. Fisher provides an extensive toolbox if you want to go down this path. First, guided by population density, he explains what is the best place to find a billionaire, and where not to go if this is your goal. Keep an eye on the community property vs a common law state: the first means that all the income and assets acquired during marriage are split among the spouses. A common law is based on an “equitable distribution”, which, according to Fisher, raises too much uncertainty. Then, Fisher tells you specifically where to go to meet up with a billionaire, from party activities to free investment seminars. As for the later, Fisher tells a story of a young lady who was on the Mr.Right-hunting business for a while, through seminars. In general, you should aim at a more mature audience, as those are more likely to have a look at you. Fisher also spends some ink on detailing how much money people got out of divorcing some rich people. Man can play this game too, as illustrated with some examples. In page 93 Fisher provides, as in every other Chapter, the guide to Marrying Well: 1) be at the right place, at the right time, 2) be where they are, 3) age matters, 4) get a prenup agreement and 5) don’t do anything stupid.

Chapter 6: Steal it like a pirate, but legally

This chapter is mainly about plaintiff’s lawyers (PL)s. If you are not familiar with these, they are lawyers who represent individuals who have been harmed physically or financially. They typically fight for someone who is not powerful, against big institutions, such as corporations or insurance companies. Ken Fisher says that “most plaintiffs’ law is a perfectly legal twist of thievery and thuggery”. Fisher starts out by separating crusaders from pirates in this context. According to Fisher, PLs want to bring an action and settle out of court. He says that this is a road to riches; being a normal lawyer, on the contrary, is a good way to earn a nice income, but not necessarily a road to riches. The market for PLs, who deal only with civil cases or the tort system, is huge. In particular, tort costs totaled $247 billion in 2007 – 2 percent of US GDP. Fisher then explains how to get this road down perfectly: what case to pick (sick kids are great) and use the media in your favor are two killers. Also according to Fisher, a confusing subject and a sympathetic client are halfway to the goal. For instance, Fisher mentions the movie where PG&E paid $333 million to have plaintiff’s lawers to go away, and connected it to reality. Fisher himself paid twice to have PLs going away, totaling 5 million. He says his firm did nothing wrong, but the cases do not justify a trial defense. Then, Fisher points out to great targets, such as Pharma and Tobacco. In pages 114-115, Fisher points to legal reading and provides the recipe to steal legally: 1) be the right kind, 2) think client and target, 3) for the biggest bucks, focus on class-action lawsuits and 4) get a dog (it can be lonely and some people may dislike you if you follow this road).

Chapter 7: OPM – not opium: where most of the richest are

This road is paved with fees from Other People’s Money (OPM) – such as money management and private equity. You do not need a PhD to go down this road. The ability to sell is crucial. Fisher considers it the most important OPM skill. Fisher actually says that you should find the right firm and learn how to sell. If you want books to learn how to sell, Ken Fisher recommends some in page 120, including How to Win Friends & Influence People (Affiliate link). You’ll be expected to bring in a given amount per month. If you fail to do so, you’re history. Fisher then details the two different types of OPMs: those that are commission- and those that are fee-based. He argues that with fee-based systems, more people made it to the Forbes 400 list. In page 137, Fisher provides the guide to Other People’s Money: 1) love capitalism and free markets, 2) get the client, 3) keep the client, 4) don’t break the law and 5) focus on core competencies.

Chapter 8: Inventing income

This is your road if you can invent an endless stream of future income. Just inventing is not enough though. Ken Fisher cites the example of the guys that invested Post-its. They worked for 3M, so even thought they may have collected a nice bonus check, they did not continued to make money on that. Regarding the question of inventing vs marketing, Ken Fisher says “do both!”. Marketing your product is vital. Fisher cites Ron Popeil – currently worth $100m – who haunts late-night TV, pitching products energetically for insomniac audiences, as Fisher says. Pages 142-143 are spent with Popeil’s story and virtues. The next invention is writing. Fisher says that most successful writers do not get rich and while you can make some monies with it, chances are it will not lead you to Riches. The following invention is writing songs, which beats performing. Fisher cites examples e.g. Whitney Houston (performer) vs Denise Rich (songwriter). The following subsection has to do with Politics. Ken Fisher mentions many examples of ex-politicians who became rich after office, he gives a few tips if you can go down this road (and succeed) and mentions examples of inexplicable political wealth. In page 157, Fisher provides the guide to inventing income: 1) pick a talent and stick with it, 2) make sure it endures, 3) monetize it, 4) patent it or otherwise protect it, 5) market and merchandise it and 6) plan for the future.

Chapter 9: Trumping the land barons

America is a land of real estate moguls, as homeownership is about 70%. The chapter starts off with this claim and saying that not only this road is not easy, the truth is that returns are not great (5.8% since 1964). The most wealthy in this road have a trick, though: they borrow. If you are debt-averse, do not consider this road. Leverage can juice profit. Done wrong, losses are massive. The key is finding a good value you can monetize that others don’t want. Ken Fisher introduces his wife as the family land baron and tells the story of how she bought a building that Fisher filled up with his company employees, bought for $18m, but used to pull $25m (net $7m). Folks fool themselves and cannot evaluate market’s ups and downs properly. Ken Fisher argues that flipping a property is for friggin’ losers. Real barons don’t flip, as transaction costs are simply too high. Timothy Bliseth flipped his first property successfully, but it was flippin’ lucky. Start small and unsexy. Buy a duplex, live in one unit, rent the other unit out. Buy software to build a pro forma; this is a bumpy, complex road without it. Regarding building new Real Estate, be advised that there is a lot in terms of building codes. It is not trivial. Fisher goes on to describe the best states to go in terms of net inflow and says that California is currently losing population and wealthy / high-income individuals, plus it suffers America’s most complex and often contradictory local regulations, according to Fisher. In pages 174-175, Ken Fisher presents the guide to being a land baron: 1) learn to love leverage, 2) monetize it, 3) don’t fool yourself, 4) don’t be a flipper, 5) find a vibrant market, 6) create a pro forma, 7) know the code.

Chapter 10: The Road more traveled

The least sensational but the most reliable road, according to Ken Fisher, is to save and invest wisely. Not needed to have phenomenal investments, OK investments will do the trick. Income matters. The more you earn, the faster you will get there. Do what you love, but choose a job that pays well. Sell yourself at interviews; you are selling a product… yourself. Pick a retirement age and calculate how much you will need, inflation-adjusted, Fisher provides you with the formulas. Ken Fisher also uses the 4 percent rule: after retirement you should live off 4% of your portfolio. Then, Ken Fisher preaches that we should own stocks (pretty much always) as for the investment part. Another major problem of those who take the road is to set the goal. You should either choose growth, income or a mix of these. As for the right strategy, Ken Fisher argues that cash and bonds when you need an all-equity benchmark is about as risky as it can be. Investing smarter by investing globally: Ken Fisher argues that you should cover the entire world, otherwise you may miss opportunities and a chance to reduce volatility. As for a passive vs active, with $200k go passive with a combination of ETFs that match the weights of the world. If you have more than $500k you should go with individual stocks. Bonds are riskier than stocks. At the end of the chapter, Fisher tells the story of Hetty, a woman who died with a net worth of $100m but could not pay for the doctor when her son injured his leg. The chapter finishes, in pages 200-201, with the guide to saving and investing: 1) get a decent job paying a good wage, 2) figure out how much you want/need, 3) calculate what you need to save each month, 4) save and 5) make your money work.