10 Roads to Riches by Ken Fisher, A Book Review

Introduction

The financial advice book “10 Roads to Riches” identifies ten paths to becoming wealthy. The author gives advice on how to achieve all of them and warnings of what to avoid in each.

What are the ten roads to riches, and what are the pros and cons of this author’s advice?

Starting a business from the nuts and bolts is the surest way to own it and profit from it when it succeeds.
Starting a business from the nuts and bolts is the surest way to own it and profit from it when it succeeds. | Source

Road One: Start a Successful Business

While a small minority of the workforce are small business owners (and even fewer are more than someone who simply owns their job), they make up a bare majority of millionaires, according to “The Millionaire Next Door”. The book by Ken Fisher recommends how to get experience in the business instead of rushing out to start one. It doesn’t spend enough time talking about why most businesses fail – insufficient cash flow due to debt load and not handling taxes properly. Nor does he discuss the fact that most millionaires have dull-normal businesses like auctioneering services, doctors’ offices, pest control and trailer parks.

This book has good advice on how to pick a business, but industry specific guides are the next step on how to implement path one to wealth.

Road Two: Becoming a CEO.

To this road, I would add becoming a C-level employee of any business, not just CEO. This route is easier than starting your own business, and you can work on becoming wealthy via road 10 while trying to achieve road 2.

The book Ten Roads to Riches tells you to get wealthy milking the benefits, but there is less stockholder and public approval today of CEOs for lavish parties, massive compensation packages and wasteful perks.

Road Three: Be a Sidekick

This road to wealth relies on becoming a key supporter early in a business and getting rewarded well for it when the business grows. For example, the early investors in Facebook became wealthy for relatively small investments. Or take the janitors and secretaries who were among the first to work for Microsoft and got paid stock when the firm was tight on cash, becoming millionaires when it went public.

This method of becoming wealthy is what everyone who goes to work at a start up hopes to achieve. It is more practical for many with less personal ambition but practical skills, such as accountants, office managers and legal advisers. The side note of this rule is that you can use "Road 3" to become wealthy supporting those who are on Road 1.

Road Four: Turn Celebrity Into Wealth and Wealth Into Celebrity

The Kardashians are the example of Road 4 to wealth, becoming celebrities and then becoming even more wealthy through advertising gigs and hawking products. Paris Hilton has followed this path, becoming a celebrity through reality shows and a party-girl image careful crafted over the years. The end result is that she’s paid a million dollars to DJ a party and worth a hundred million dollars via the line of stores that sell only Paris Hilton branded products.

This route is arguably what many people with Youtube channels hope to achieve, paid for their celebrity via Google ads and receiving payment for referrals and in-video shout-outs if they have enough viewers.

Marrying well for wealth is unlikely, since most millionaires marry once for life and well before they are wealthy - and divorce destroys wealth quickly.
Marrying well for wealth is unlikely, since most millionaires marry once for life and well before they are wealthy - and divorce destroys wealth quickly. | Source

Road Five: Marry Well.

This chapter is written in a serious vein, but it is hard to take seriously. The author neglects a number of facts that make this very unlikely. First, most high earners do not have a high net worth, so the women who want to marry a man with a lot of money are likely to find an upper middle class man who is really big hat, no cattle. Women who want to become rich by marrying a rich man will find most suitors wearing a fancy suit he paid for on credit and an imported luxury car he is leasing, but pitifully little real wealth left over from his spending, and pretty much none if she spends as much as him.

Second, the book also ignores the fact that most millionaires built their wealth over time and the vast majority of them are married to the same spouse all of that time. Third, most millionaires made their money on paths one and two worked hard and long to get to wealth, and thus little tolerance for a woman who wants to spend readily what he worked so hard to get.

If you want to try to implement this advice, look for guys early or midway on the way to wealth via roads 1, 2 or 3. Once he’s high up that mountain, your odds are far lower because his selection is so much greater.

While a few women may marry rock stars, hedge fund managers, million dollar a year sales people and real estate moguls, the odds of this are even lower than the stats the author gives in his book, because so many are already happily married by the time a gold digger is interested in him.

Road Six: Steal It Legally

This is one of the few books I’ve read where the path many lawyers seek to take is honestly discussed. Become a lawyer, find the cases with the potential of million dollar settlements and payouts, and then sue. The public is familiar with the hundred million dollar class medical injury cases, billion dollar class action lawsuits and half million dollar requests for minor injuries that ambulance chasers file. The public isn’t familiar with the contingency fee system that allows many lawyers to get a third to half of those settlements, in lieu of up front payment.

I agree that this is a legal way to garner a lot of money, if you literally find the right case and win the lottery. The ethics, though, are a whole other matter.

Road Seven: Capitalize on Other People’s Money

This road to wealth is one of the most widely available, and it is the route many business majors and MBA’s are trying to follow. Become a money manager, private equity firm employee, banker, stock broker, insurance agent or other money management firm. Get paid to give financial advice, sell financial products or manage financial assets. In short, you’re paid to manage other people’s money. This route requires learning how to sell and joining a firm where you can actually make money doing this. The author does warn to stay within the law when following this route.

Arguably, Suze Orman followed this route before she became a TV show host and author, which led to “Road 8” and 20 million dollar net worth in the early 2010s.

One way of becoming rich is designing a product and selling a lot of them, or selling the license to make it and living off the royalties.
One way of becoming rich is designing a product and selling a lot of them, or selling the license to make it and living off the royalties. | Source

Road Eight: Invent an Endless Stream of Money

This road relies on developing an intellectual asset you can monetize. It can take the form of inventing a product and licensing its manufacture or developing a product and letting another company sell it. This route is at the heart of “The Four Hour Workweek”.

Other options described in “10 Roads to Riches” include creating online content or writing books and hoping to live off the royalties. The author talks about song writers actually having it better than the singers, because the song writer makes money even when the song is redone by another artist.

I agree with the author that if you’re on this path of monetizing intellectual capital for long term income, the book “Guerrilla Marketing” is a good starting place.

Road Nine: Real Estate Investments

This is the classic route of buying real estate and renting it out. Road nine to wealth is the route touted by Lifestyles Unlimited, Robert Kiyosaki of “Rich Dad, Poor Dad” fame and many others.

The author does warn against flipping, where you buy the house, pay a lot to fix it up or improve it, and then try to sell it at a profit. This is high risk because you may not sell it for enough to cover the purchase price plus repairs, and the danger of losing money goes up with each month it sits on the market because you have to pay interest on the hard money loans and real estate taxes while waiting to recoup your money. Then there’s the hassle factor of having to constantly find and flip properties to keep making money.

The safer option is buying property, making basic repairs or modest upgrades in alignment with the market, and then renting it out. Rental income is a reliable income source.

A mistake the author makes is not addressing the risk of lien investing, touted on many midnight infomercials but even more financial risk than flipping houses.

The author discusses a specific strategy of redevelopment, but this road to wealth is much broader and has many more opportunities than finding inner city gentrifying neighborhoods and fixing the condos and houses up for rent. Real estate investing can range from owning a retail strip mall to buying real estate investment trust shares to owning a percentage of a multifamily apartment complex.

You can't build wealth if you pay 20% of the bank on credit card debt.
You can't build wealth if you pay 20% of the bank on credit card debt. | Source

Road Ten: The Road More Travelled

This is the route of living on less than you make, diligently saving your money and investing over the long term. This is the road to wealth that those following Dave Ramsey’s plan achieve, the route Suze Orman suggests and is covered by some degree in “The Richest Man in Babylon”. It is the route open to anyone and everyone, if you have control over your spending, the diligence to save the difference and patience to see it through.

Kenneth L. Fisher neglects talking about Suze Orman and Dave Ramsey, opting instead to list a number of sales books and career books assuming that this route relies on raising your income first and foremost. He recommends books like “What Color Is Your Parachute” instead.

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