Keep Your Integrity at All Times and Regardless of the CostMaking money does not make you more valuable than someone else. It does not even necessarily make you smarter or wiser. The acquisition of capital at all costs is a poor bargain. Never, under any conditions, sell your integrity, or violate your ethics, to make a few extra dollars (or even a few extra billion).
The best test I’ve ever heard about how to follow this rule was prescribed by Warren Buffett. He said that each of us should live our lives as if the following day, all of our actions would be on the front page of our hometown newspaper, to be read by our friends, peers, colleagues, pastor, school teachers, parents, siblings, et cetera, with the story written by a critical, but fair, impartial reporter. That will change the way you conduct yourself.
Buy Assets that Generate Cash or Retain ValueFinally, if you are going to spend money, do so on the things that will generate the most cash or that will, at the very least, retain their value. In my own case, I’ve been building a Carl Barks and Scrooge McDuck art collection that will, someday, be substantial. I have rare books, a collection of fine writing instruments, and extraordinarily nice furniture.
This theme was illustrated in the bestselling books The Millionaire Next Door and The Millionaire Mind, which showed people that the average American multi-millionaire often drove an older car but had the best furniture. That’s because people that want to build their net worth focus on something called life cycle cost. If you buy a piece of cheaper furniture that is going to get ruined when you spill a cup of coffee on it, or a pair of $200 tennis shoes that will fall apart in a year, they are going to cost more per use than a comparable table or pair of shoes that costs five times as much. This is counterintuitive.
To be like Scrooge, don’t squander your money on things that will lose value. Find a mix of items that you will enjoy, provide you with utility, and will appreciate at a rate higher than inflation. In the end, you’ll get the satisfaction of spending and the benefits of investing. It can be done with diligent study, patient acquisition, and disciplined execution.