A few weeks ago I was contacted by someone respresenting the authors of the book Get Rich, Stay Rich, Pass it On. I was offered a chance to write about their book on my blog so I requested a copy. Coincidentally, I was just sent another book to review which I am currently reading. I hope the trend continues and that book reviews will come a regular in this blog.
Book Review of: Get Rich, Stay Rich, Pass it On by Catherine S. McBreen and George H. Walper, Jr.
I knew nothing about this book when I received it. I must admit that books with words like Get Rich in the title don’t give me a great feeling when I first open it. I have read many how to get rich books and none of them have been worth much in my opinion.
With that said, this book is not about how to get rich. This book reminded me of the book, The Millionaire Next Door, which surveyed millionaires to find out what they had in common. The Millionaire Next Door was centered around millionaires’ habits and spending. For example, it would state that 30% of millionaires never paid more than $40 for a watch.
Get Rich, Stay Rich, Pass it On also surveyed millionaires to find out what they had in common. However, the data that were collecting was about how millionaires became millionaires and what they invested in. That made for a much more interesting book. The average person does not really benefit from knowing that millionaires don’t buy $1,000 watches. But they could really benefit from learning how millionaires made their money.
When you cut through all the data, the book basically concludes that there are two secrets to perpetual wealth:
#1 – Own income producing real estate
#2 – Investing or owning continually innovative enterprises
If you’ve been reading my blog, you know all about secret #1. I certainly agree that owning real estate that produces passive income is a way to perpetuate wealth.
Secret #2 may seem new to some, but it’s really just saying that you should invest in or own businesses that will continue to grow. In fact, I agree with secret #2 100%.
What is a continually innovative enterprise? It’s a business that continues to grow and change with the times. For example, if you had a company that manufactured VHS tapes, if may have been a great business in the 80’s and early 90’s. But today, you would be out of business if you did not innovate or expand. You cannot create perpetual wealth with a business that does not innovate. You’re business may have made $200,000 a year in the 1980’s, but what’s it making in 2008?
So let’s say you got that out of the way. Now you have a business that will continually make $200,000 every year for the next 40-50 years because as CEO you will keep it up with the times. The next step is to use that $200,000 and invest it into income producing real estate. Many people who own businesses will reinvest their business earnings or use business expenses to purchase real estate. Secret #2 perpetuates secret #1.
If you owned a retail shop that has been successful in a strip mall. A logical next step would be to try to purchase the strip mall. Why continue paying rent when you can be using those rent payments to build equity and gain a real estate investment. This is one way that you can use secret #2 to accomplish secret #1.
I hope that someday my ebusinesses will require me to move into an office and hire employees. When that time comes, I will definitely be looking into purchasing, not renting an office building.
This book is about perpetual wealth. It focuses on how to pass wealth through generations. I agree 100% with the authors in that the only way to really do this is through business and real estate. I felt that Get Rich, Stay Rich, Pass it On is decent book. To me there was nothing that was eye opening to me, but then again I pretty much agreed with it 100% so I guess I already knew the secrets.