"To you it has been given to know the secrets of the kingdom of heaven, but to them it has not been given. For to him who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away.”
The Mathew Effect
After I left the Special Forces I got together with a friend and we plotted on how to build a brewery in Ogden, Utah. I didn’t know much at this time, so I decided to take a road trip to Colorado and explore as many breweries as I could. Colorado’s beer drinking culture is huge and every small town has a local brewery. I wanted to learn how each of them could stay in business.
One night, as I was sitting at the bar of a brewery in Breckenridge, I met a man who was a law professor at the University of Colorado. I was talking to this man about college and the costs of tuition and the job market. He argued that the college structure was great and that it is helping people out of poverty and giving millions of humans a new life. I argued that college is a business and that the tens of thousands, sometimes hundreds of thousands, of student debt was creating indentured servitude among my generation with no real jobs available at the rate necessary to be able to pay off the loans which kids were receiving to gain the “education.” As our conversation went on, he finally asked “what else should people be doing instead of going to college?” I responded that they should learn how to start a business and learn how money works.
This was my epiphany. I didn’t fundamentally understand how money works either.
My quest to learn the money game has been long and torturous. But I learned a few things.
First, America is the centerpiece of the global economy. American capital markets are, by far, the least discriminatory institutions in the history of the world. It doesn’t matter what race, sex, gender, religion, creed or even nationality that you are. If you have US dollars, you can play the game (the only exclusions are terrorists and money launderers). America’s capital markets are exceptional because of stable political transitions of power, established property rights with a durable legal system that protects individuals and investors, and because the US dollar has been used as the world’s reserve currency since the end of WWII.
The second thing that I learned was from my father, uncles and brothers. And then, through my own personal experience. The emotion of losing money will ALWAYS outweigh the emotion of making money. Watching money grow in accounts, your business or in real estate is something like the feeling of expecting it to do that. Satisfied, but not necessarily euphoric. It’s work, and it’s hard work.
Watching your money disappear because of bad decisions, bad investments, bad luck, or bad timing… this creates a negative feedback loop which can cause heart palpitations and sleepless nights. Especially when it’s money you were counting on to pay the bills.
The lesson learned is DON’T LOSE MONEY.
The third and final major lesson for this post is called the Mathew Effect. The rich get richer, and the poor get poorer. It takes money, to make money. This is a principle of every successful society and is displayed in history over and over again. Its truth can be declared because every society that employs it, can live it. Those who don’t, fall apart.
My favorite billionaire, Elon Musk, said it perfectly on a recent Joe Rogan podcast. Wealth is becoming a pejorative concept in recent years. In reality, the ability to start a company and organize humans to create something that is better and more efficient provides the owners of that wealth more capital to allocate to businesses, inventions or ideas; ostensibly making the world a better place along the way.
In order to have “stuff,” someone must do the real work and make that stuff. It must be transported and sold. And consumers need to identify which stuff is better than the other stuff. And those who sell more goods and services will be rewarded.
It’s not like there is a cave with a finite amount of gold and the richest folks are taking more than their share. Capitalism is a force multiplying system. The system, the government, and the people all want you to succeed. They need you to succeed. But there are rules to the game. And if you learn the rules, and play the game, then you have been given the keys to the kingdom of heaven. There won’t be anyone for you to point your finger at and say “I am suffering and you are the one who did this to me.”
I never did get around to building that brewery in Ogden. But someone did. And at the exact same location that I had wanted to build it. Part of being involved in marketplaces is identifying opportunities before others do. The other part is knowing how to take advantage and executing the plan. The road can be bumpy, and long and very hard. For anyone willing to take up the quest, the reward is immense and will provide many blessings for you and for those around you.