One Thing & Another

Word for the Wise

Spavined (SPAV-ind) – swollen, decrepit and broken down. Example as used by Lester Chadwick in the 1913 children’s book Baseball Joe at Yale: I can size a player up as quick as a horse buyer can a spavined nag.”

 Did You Know?

If you keep a goldfish in a dark room, it will eventually turn white.

 Principles of Wealth: #14 of 61

Income is an important factor in the acquisition of wealth, but it is not a measure of it. Nor are expensive possessions. The only measure of financial wealth is net investible worth.

It had a pool in the back and automatic doors on the garage in front. It was the nicest house I had ever lived in and our first home. Three bedrooms. Two baths. Friendly neighborhood. $170,000.

“Do you think I’m being foolish?” I asked. “Spending so much on a home?”

Eddie looked at me as if I was crazy. “Your income last year was more than double the cost of the house,” he said. “And your income this year is higher still.”


“I close hundreds of houses a year in this area,” he said. About a third of them are for homes that cost more than a half a million. And they are bought by doctors and lawyers that make no more than you do.


“They drive Mercedes. You drive Hondas. They drink Dom Perignon. You drink Proseco. They all look rich, but most of them are in debt. They spend their money faster than they make it.”


“How much did you have in savings last year?”

“About $175,000.”

“And this year?”
“About $250,000.”

“That’s what I thought. You are worried about buying a home that cost you about six or seven months of salary. That alone tells me you are an extremely conservative spender.

“More importantly, you’ve made this promise to yourself to increase not only your income but your savings every year. And you’ve been doing that for years.

The doctors and lawyers I know are spending two to five times their yearly salaries on their houses. These guys have great incomes but they also have great debt. Debt that is often greater than their assets. They are buying prestige and keeping their fingers crossed that their financial situation will always be strong. They have zero savings and no net worth.”

“That net worth thing. It’s always troubled me. How can I count my house or my cars? I’m always going to need them. I don’t want to be forced to sell them.”

“Okay, then don’t count them. Count only the net worth you have after subtracting them. Call it something…”

Years later, when I wrote about it, I called it net investible wealth.

 How to Fix Your Business in Seven Days

Your business is stuck. Or maybe it’s you. It needs something to get out of its rut and on to another level.

What to do? How about a 7-day Gordon Ramsey redo?

Have you seen his show? He spends a week in a so-so restaurant, assesses its weaknesses, and then radically revamps the place in that time. He hires people, fires people, changes the menu, changes procedures, and sets new standards for customer service, quality, etc.

It’s very hard to make these sorts of tough decisions when you are looking at your business from the inside. So maybe you want to hire someone you trust to come in and tell you what needs to be done. You already know what needs to be done. You just don’t want to do it. But when you see the recommendations in print, maybe you’ll gather up the courage and get that shit done!

Confession: I need to do this with at least one of the businesses I own. Maybe I’ll take my own advice. I’ll let you know.

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