By Don McNay
Register Columnist
RICHMOND —
I was talking to a person in the medical profession who said, "It seems like some patients are looking for a magic pill that will solve all their problems."
I said, "Welcome to my business," because the same analogy holds true in finance.
People want one simple idea that will make them rich. Preferably while they are lying on the couch watching television.
I've tried losing weight while lying on the couch, munching on potato chips.
I can tell you that it absolutely doesn't work.
If you read “The Millionaire Next Door” or any book that studies how people become financially independent, they all basically say the same thing.
Spend less than you make. Don't get into needless debt. Make a budget. Have a long term goal and be prepared to take years to get there.
The same thing holds true in living a healthy life. Eat less than you burn up. Count your calories and measure your progress. Plan to live to an old age and stay healthy until you get there.
The key in both health and money is focusing on the long run. There is no "magic pill."
The reason that Wall Street collapsed is that too many companies were looking for their own "magic pill." They were focused on piling up short-term profits, so they could get their multi-million dollar bonuses and didn't care about the long term.
Turns out that Wall Street had a magic pill. It was called the bailout.
Thanks to their friends and lobbyists in Washington, Wall Street was able to screw up and have someone else clean up the mess.
It doesn't work that way for the rest of us. With your health, to coin an old song, "If you play around, you lose your life." Same thing holds true with money.
The recent events at JP Morgan Chase show that Wall Street is still looking for a magic pill. It didn't work.
It doesn't work on Main Street either.
