"The Best Personal Finance Tips from Evil Millionaires" by @lifehacker
Just because someone’s evil doesn’t mean they can’t teach us something worthwhile, and the millionaires of the world are no different. Even though you may consider some of them evil, there’s no doubting that they know how to amass a fortune. With that in mind, here are just a few of the most applicable tips from evil millionaires (money laundering not included).
We're not trying to pass judgement on anyone here, and the subjectivity of the word "evil" is certainly up for debate. Regardless, there's no denying that the people below have a ton of money and most have done something to don the evil cap at some point in their filthy rich lives, so let's give them our ears and take a bit of their advice.
It's Just as Important to BE Something as It Is to DO Something
Like an evil dictator, becoming a millionaire isn't just about the process of amassing a fortune. "Fake it till you make it" is necessary, and you'll need to pretend to be successful even if you've only got a couple thousand in the bank. At least, that's the advice we can take from real estate developer and mogul Donald Trump.
The basic idea here is that it's as important (if not more) to "be something" as it is to do something. Financial success isn't that complicated, but you have to believe you can do it. After all, personal finance is mostly about thinking toward the future, not pinching pennies. Once you're well known, respected, and trusted, you can amass that fortune a lot easier. Author Steve Siebold lays it out over at Business Insider:
"That's why people like Donald Trump go from millionaire to nine billion dollars in debt and come back richer than ever," he writes."While the masses are fixated on the doing and the immediate results of their actions, the great ones are learning and growing from every experience, whether it's a success or a failure, knowing their true reward is becoming a human success machine that eventually produces outstanding results."
Trump himself has said this many times over, and often stresses that getting rich and being successful go hand-in-hand because it's about mindset. Once you have one financial success, it's easier to get more. For someone like Trump, that means real estate and passive income, but you can make it whatever you want it to be. Just make sure you don't get too upset over your failures.
Put Money Into an Index Fund
Unless they're busy writing books, most of the evilest millionaires don't really have the time to dig into the specifics of personal finance. Bernie Madoff has plenty of time these days though, and after being convicted of one of the biggest financial frauds in history, he's happy to dole out advice to anyone who will listen. Surprisingly, Madoff's investment advice given to MarketWatch is actually solid:
The best chance for the average investor is to put money in an index fund. There are lower commission rates and more professional management with these types of firms. It’s the safest and least likely place to get scammed.
If anyone knows scamming investors, it's Madoff, so it's worth paying attention to his advice here. We've heard before that index funds are a good place to start investing and it's because they don't require a lot of startup funds to get going. Bloomberg breaks down why index funds work well:
Madoff's an unlikely messenger with the right message for the vast majority of investors. Index mutual funds and exchange-traded funds are subject to much more rigorous oversight by the Securities and Exchange Commission than are hedge funds. Index funds also have a much better record on insider trading and fraud...
Index mutual funds and ETFs are regulated, diversified, low-cost and better performers than their actively managed peers. So bottom line investing in an index mutual fund or ETF is the safest way to invest for the average investor. As one person posting on the online Bogleheads.org forum put it: "When the academics and the crooks both agree, you are probably onto something good."
If you're interested in getting started with investing, we've covered a ton of different ways to dip your toes in without much risk. If you want to take Madoff's advice and go for index funds in particular, Forbes has a write-up of the pros and cons. To pick the best index funds, MSN Money has a few suggestions that deals with each of the various types of funds.
Sign a Prenuptial Agreement Before Marriage
Media mogul Rupert Murdoch has seen his fair share of controversy over the years and regardless of where your opinion lands about his politics, it's hard to like the guy. The international phone hacking scandal is reason enough to distrust him, but he's not exactly the most philanthropic or empathetic guy out there either. All that said, the man knows how to handle his money, and one thing he's learned through three marriages is the importance of the prenuptial agreement (which our readers tend to agree with).
Murdoch's estate is (probably) a lot bigger than yours, and his prenuptial agreements are likely far more complicated than yours would ever need to be, but just because Murdoch has more than you it doesn't mean it's not worth taking the same steps before your own marriage.
Financial experts and lawyers fall on both sides on the importance of a prenuptial agreement. The main goal of a prenuptial agreement isn't just to make sure people get what they're owed, it's to make the usually chaotic and all around awful experience of handling money in a divorce easier. Speaking with personal finance expert Mellody Hobson, ABC News explains why prenuptial agreements are growing in popularity:
Hobson said there were several reasons for the increase. For one, the divorce rate is 50 percent. Many people enter marriage with some debt, and their partners may want to protect themselves from those financial problems if the marriage ends. Also, there are more women and in the workforce now and they may want to protect their assets, she added.
Prenups aren't always about money, Hobson said. They can cover everything from a guaranteed "date night" during the marriage to custody of the pets if there's a divorce. It can also contain provisions about how to handle your affairs upon your death, she noted.
Hobson said she believed having a prenup was a good idea for most people. She cited a recent Harris Interactive poll in which 44 percent of singles and 49 percent of divorced people said they thought having a prenup was a good idea. Fifteen percent of divorced people said they regretted not having one.
Of course, something like a prenuptial agreement is up to you and really varies from person to person, but the point is that your don't have to have a Murdoch amount of wealth to justify having one.
Take Your Time with Financial Decisions
Business magnate, investor, and CEO of the Blackstone Group Stephen Schwarzman is worth somewhere around $6.5 billion. He was also described by the New Yorker as a villain, he once likened raising taxes on the rich to Hitler's invasion of Poland, and he's well known for spending absurd amounts of money on his own goofy antics. All that said, Schwarzman's far from the evilest on this list, but he has a ton of money that he knows how to handle it. His advice? Chill out, and postpone decisions when you can:
Today, whenever I’m under pressure to make a decision on a transaction but I don’t know what the right one is, I try desperately to postpone it. I’ll insist on more information—on doing extra laps around the intellectual parking lot—before committing. I take the same approach with people, too. For example, when we were looking for a manager to start up our long-short hedge fund, we interviewed for a year and a half. The timing was ripe for that asset class, and if you weren’t doing something with it, you were losing out. It took a huge amount of time and effort for Blackstone, but we found a young money manager we were comfortable with, and he’s become an enormous asset.
Every year I speak to our new associates and give them this advice, although in my own words. This isn’t like school, I tell them, where you want to get your hand in the air and give an answer quickly. The only grade here is 100. Deadlines are important, but at Blackstone you can always get help in meeting them. As a firm, we can always figure out how to do another lap around the parking lot. Because what’s true when running track is true when doing deals: The person who’s the most ready for game day will be the one who wins.
We've talked about plenty of ways to improve your decision making skills because it's often a lot harder than you'd think. In the case of Schwarzman's advice, those decisions can have serious impacts on your wealth, so it's worth spending the time to really consider them in every way. Likewise, it's about giving yourself time to overcome the stupid biases that often lead to poor financial decisions.
You Have to Work for It
Silvio Berlusconi has not only owned a few sports teams, media outlets, and more—he's also been the Prime Minister of Italy, the subject of countless scandals, and been convicted of tax fraud. None of that has kept him off of Forbes lists of the richest people in the world though, and the former Prime Minister has done countless interviews over the years offering financial advice.
All his advice typically boils down to one thing. Don't be lazy:
"The answer of Berlusconi the businessman is: `Try to earn more by getting on with things.'"
That response certainly has its share of critics, but it's not actually that unheard of. We've talked before about how it's often better to focus on earning more rather than spending less, how easy it is to earn passive income, and how getting started is everything. Berlusconi's rather flippant, awkwardly worded advice is essentially the same thing. Increasing your wealth isn't about just idling by and waiting for it to happen: it's about working for it no matter what it takes (although we'd suggest staying away from tax fraud).
When all is said and done, evil millionaires tend to make their money the same way as the rest of them. Investments, hard work, ingenuity, and risks. A little tax fraud might help now and again, but it's by no means required.
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