Episode 8: Skills Are Investment Assets

Let’s talk about skills as investment assets.

Consider these facts:

1. No wealthy person I know depends on a paycheck to live the life they live. They own assets, stocks, real estate, businesses that work for them while they sleep or play. 

2. A quality investment can last a lifetime, and beyond. A job is only as good as yesterday’s paycheck.

Most of the World’s wealthy people, particularly in the US, did not start out with a lot of investment assets. They first developed skills that had value and then converted those skills into assets.  Every single one of the young billionaires you see in the news got that way by trading his or her skills for ownership in a company they created or helped to create.

Let me share a personal example of how these factors can work.  Early in my career, I developed some good skills in the area of finance.  As a result, I got a job with a promising company in the real estate business.  One day, I was offered a chance, along with other executives and junior executives of the company to purchase an interest in a real estate project being developed by the company in conjunction with a major insurance company.  

I didn’t really have enough money to be able to make the investment comfortably—it involved foregoing some things I would have preferred to do with what little money I had—but I studied the investment until I understood it well.  I was pretty sure I was right, and when I learned that the CEO and President of the company were also investing their own money, I decided to take the risk. For several years I got nothing back on my money while the project was being completed.  

Then something wonderful happened.  One of the two apartment developments that made about half of the total project was sold and my share was over 30 times what I had invested.  The other half that was not sold has been providing me annual income for the last 35 years that is 4 times my original investment—each and every year! 

You could say I was just lucky, but consider these things:

I would never have had the opportunity if I had not developed skills that put me in position to be offered a share in the project.

I was willing to use some of the very limited amounts of money that I had to take a calculated risk on something that might move me up the economic pyramid. Notice that I did not take a Las Vegas type risk.  I wasn’t gambling. There was ample evidence from the actions of the more senior executives and my own research that this was probably a good investment. It was not a sure thing; nothing is; but the ratio of risk to reward was in my favor.

What I didn’t know then, but have learned later, is that this kind of opportunity happens far more often than most people realize. I even made an investment a few years ago that returned 100 times my original capital.  It was not without risk, but I had developed over time the ability and confidence to think that by using wisely the skills and capital I had, I had a much better chance of winning than losing and that the profits from my winners would far outweigh any losses on my mistakes.  That is the formula for wealth.

Above all, it started with my developing skills that other people wanted and needed, not just having a job.  In fact, the skills that led to that investment were developed through 4 different jobs that I held until I had learned all that I thought I could from them.  Then I moved on and added more skills.  Skills are assets and are worth more—and are many times more secure—than any actual job you will ever have.