Why the Mega-Rich Get Richer

University of Nebraska-Lincoln, hardly an Ivy League name.

But all three are serious learners, studying business opportunities and absorbing everything they can about their fields. Charlie Munger, Vice-Chairman of Berkshire Hathaway, says Buffett spends most of his time “just sitting on his ass and reading.”

Studying for Success

There are worse ways to spend your days than studying how to advance in your field. However, these are not just thinkers, but men of action. Their 11-figure net worths are a reminder that the super-rich don’t get there by toiling for long hours and socking their savings into safe investments.

They achieved great wealth by starting and running profitable companies.

Millions of Americans don’t have that opportunity, of course. Many lack the time, money and expertise necessary to start their own businesses.

But that’s where the stock market shines, offering the average Joe (or Jane) the ability to take an ownership stake in many of the world’s best businesses including, of course, Microsoft Corporation(NASDAQ:MSFT), Oracle Corporation(NYSE:ORCL) and Berkshire Hathaway Inc.(NYSE:BRK.B).

It takes only a small amount of money to get started. It’s simple and easy to diversify. Trading costs have never been lower. And the returns from the stock market over the last five, 10 and 20 years have been exceptional, just as they have for most of the past 200 years.

In short, the mega-rich got richer over the past year not thanks to an improving real estate market, or the appreciation of Old Masters, or the beauty and durability of gold, but because they have substantial ownership stakes in well-run, publicly traded companies.

That’s how most of the mega-rich get that way. And it’s how the rest of us can build, enhance and protect our fortunes too.

Good investing,

by Alexander Green, Chief Investment Strategist, The Oxford Club

Investment U provides cutting-edge research and strategic financial recommendations for all levels of investors through its morning publication Investment U Daily and its related publications.

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