The Ten Roads to Riches

by Ken Fisher

  Lucas created Yoda, the Death Star, and the Wookiee—but also something more valuable: movie merchandising. The toys, lunchboxes, action figures, and gimmicky tie-ins were small change before Lucas and Star Wars. Lucas (with buddy Steven Spielberg, net worth $3.7 billion) saw how to monetize characters no one fathomed before. They realized kids would want to reenact their movies with 4-inch plastic dolls and their very own plastic lightsabers. This is the essence of what income inventors do. It’s what Rowling and King do, it’s what Popeil did, what Denise Rich did—they create an experience folks will pay to own a piece of. If you’re creative, you can do this. Just figure what you can monetize that hasn’t been yet.

  You can go the conventional routes of inventing, songwriting, or book writing for movies. You do what many have done before, just slightly differently, and make sure you keep all future rights. James Dyson ($4.9 billion) was always more of a tinkerer than an inventor, and savvy enough to make everything in-house and own all the rights.13 Brains and business smarts built an empire of vacuums, fans, dog grooming tools, and now hand and hair dryers. Or you can go nonconventional and do what hasn’t been done before like Lucas did, maybe on the Internet, cell phone, or next platform we haven’t fathomed. That’s for you to figure, not me.

  The possibilities are endless. My advice: Aim for as broad an audience as possible—as wide an adaptation as possible. If not that, then something unique but vital to something else widely and broadly needed or desired. The narrower your scope, the narrower your road, and the smaller your riches.

  POLITICAL PENSIONS—AND GOOD NEWS

  Want a really wide audience? And invented income without any economic linkage? Try politics! Run this fork well and taxpayers hand you wealth . . . for nothing! Fact: In aggregate, politicians show no ability or competency for actually contributing to our economy. With the obvious exception of Donald Trump, most have never taken any road to riches (except marrying for money, and a few as pirates). Few have built, invented, created, led, generated, managed, improved, or innovated. Yet most end up wealthy—invented income.

  I don’t expect you to become president, but take the Clintons. I want you to see how it worked for them. They were flat broke leaving the White House but are now worth $110 million.14 How? Their life pre–White House wasn’t very lucrative. Bill never did anything economically remarkable. Hillary was a modestly successful backwater lawyer whose career was intermittent, tied to Bill’s campaign schedule and cut short by the White House. Her final law year saw income of only $200,000.15 Bill’s governor salary was just $35,000.16 If they saved half their pretax income (a stretch) and invested wisely, at best they’d have had only about $3.6 million entering the White House.

  To invent huge bucks, figure out what you can monetize that no one else has yet.

  As president, Bill got $200,000 a year, plus benefits.17 But they had legal fees stemming from Clinton’s impeachment battle, his ongoing female troubles, the botched Whitewater land deal, Hillary’s suspiciously profitable foray into cattle futures, Travelgate, Filegate, and about 127.72 other “gates.” They left office with about $12 million in unpaid legal fees.18 If they saved half Bill’s salary and invested wisely, adding that to our previous stretch assumptions, at the very best, after their legal bills, they’d still be over $3 million in the hole!19

  The answer is obvious—they saved some of the $153 million they earned on books and speaking fees since 2000.20 There are few careers more profitable than “past president.” You get paid $150,000 a pop just to talk!21 And taxpayers load you up.

  Presidential Income—Follow the Money!

  Congress passed the Former Presidents Act (FPA) in 1958, giving past presidents an inflation-adjusted lifetime pension—currently $205,700 annually—tax free!22 Tax-adjusted, that’s $391,000. To generate that, you need a well-managed portfolio close to $10 million. Then they get “protection” and lifetime “office allowances”—a staff and “suitable” space (i.e., posh). That’s cash. For 2015, it was $3.2 million to cover all FPA-related costs.23 Said otherwise, our then-four former presidents were paid $800,000 each! Tax free!!! That’s over $1.5 million tax-adjusted, requiring a well-managed portfolio over $37 million—each!

  Then, past presidents get “transition” expenses to ease reentry to “real” life. How much? In 2001, Congress approved $1.83 million (TAX FREE) on top of their usual haul for the Clintons.24

  But former presidents have other income sources. You can be on paid boards of directors—as many that want you. Gerald Ford was huge at doing these (as well as paid speeches—it’s amazing how someone who was voted out of office and no one much wanted to hear as president is suddenly in demand after). You can be a paid adviser with consulting contracts, as Clinton did with billionaire Ron Burkle (net worth $1.5 billion).25 Hiring a past president is a thinly veiled attempt to pay for lobbying links. No one has better connections than a past president. Let me summarize. The Clintons went from being at least $3 million (and probably more) in the hole in 2001 to being worth $110 million 15 years later. (But maybe be careful if your spouse wants to run for president later on, and make sure your post-presidency connections withstand scrutiny.)

  IF YOU CAN’T BE PRESIDENT . . .

  But few have the chops to run for president and win. Still, you aren’t precluded from a lifetime of invented political income—become a member of Congress! Starting pay is $174,000 a year (as of 2015).26 Not huge, but you’re in America’s 90th percentile while building your real wealth.27 And you don’t need to do anything in Congress. Of course, for bigger bucks you hustle. Get a leadership role and income bumps to $193,400. The Speaker of the House collects $223,500.28 Nice for Paul Ryan! Also, they get an annual cost-of-living adjustment. And they receive health benefits and a rich retirement plan that currently you’d need at least $1.5 million to equal—to which they’re entitled after only serving five years (just three elections).29

  For fun, you can review any congressperson’s financial disclosures at the Senate Appropriations Committee website (http://appropriations.senate.gov/senators.cfm). It’s a hoot. They must only report “ranges.” Some disclosures run 300-plus pages as they excuse and offload wealth to spouses, presumably to seem more populist. Why can’t they own up and not make wealth seem unseemly? To avoid mind-numbing obfuscation, visit another gem of a website,OpenSecrets.org. To see who’s funding whom and who gets money where, this website follows the money for you. It summarizes personal financial disclosure forms for these politicians, along with other titillating details.

  Inexplicable Political Wealth

  One ever-nagging question lingers—how did they get their money? Many never had any job outside politics, yet they amass fortunes. Most never directly contributed to GDP, but they’re rich. There are exceptions. Take former Senator Herb Kohl (D-Wisconsin), worth about $630 million.30 His came largely from Kohl grocery and department stores—businesses he helped build. Or Mitt Romney, with $230 million.31 He started and sold a successful consulting firm. Darrell Issa, currently the richest congressperson, made most of his $254 million from his consumer electronics business, which brought us everyone’s favorite cheesy auto-theft deterrent, The Viper (it even talked to would-be thieves in Issa’s voice).32 We know how Secretary of State John Kerry got money. He married it—twice! It’s common for them to marry wealth. Former House member Jane Harman (D-California, worth up to $450 million)33 also took the married-well road, as did John McCain.

  But most are career politicians or former lawyers. Example: Former Senator Jeff Bingaman (D-New Mexico, net worth $10.8 million upon his retirement)34 was a lawyer before becoming senator in 1983. It’s unlikely he could have socked away much of that from his short legal career. He graduated Stanford Law in 1968. Ten years later he became New Mexico’s attorney general—been in politics ever since.

  Former GOP presidential hopeful Rudy Giuliani spent most of his adult life as a government employee. He had a brief career as a prosecutor before being appointed to the US
Attorney’s office at 26, and eventually Associate Attorney General—the number three spot in the US Department of Justice. He then became a US Attorney for New York’s Southern District and, of course, New York City mayor—with a salary of $195,000. Nice, but Manhattan’s cost of living is killer. How on earth did he get a net worth of $45 million?35 (Go reread the previous again and believe it.)

  Former Senator Olympia Snowe (R-Maine, net worth $14.6 million)36 entered public office at age 26. Not only did she make an inexplicable fortune, but she married a fellow politician . . . twice! Or former Senator Bob Graham (D-Florida)—in public office since 1966. First, the House of Representatives, state senator, governor, US senator, then US presidential candidate (failed). Never, ever contributed to GDP—yet his worth is $8 million.37 Senator Richard Shelby (R-Alabama, net worth $10.9 million)38 entered politics in 1963 and hasn’t worked an honest day since. Congressman Rodney Frelinghuysen (R-New Jersey, net worth $24.7 million)39 comes from a long line of folks slopping off the public trough. Most mind-boggling is former vice president Al Gore. He reportedly left office with $2 million. Somehow, between 2001 and 2008, he made enough to invest $35 million—liquid—in various hedge funds and other private investments. He’s worth a reported $200 million!40 He’s got the Clintons beat!

  I begrudge no one money. By now you’ve figured I’m no fan of politicians of either party. My 2007 book went over why, so I needn’t retread that turf. I’ve known hundreds of congressmen and governors. They do well for themselves.

  I couldn’t have built or run my firm if it weren’t for capitalists like Bob Noyce and his creation of the integrated circuit or Bill Gates with Windows—or so many more. Even Jack Kahl with Duck Tape! But I can’t think of any subset of the politicians I’ve known or read about in my lifetime that I couldn’t have done without. They only foil each other in aggregate and suck off the public trough. It is truly amazing that politicians can win plaudits for vilifying CEOs as rent-seekers (jargon for “overpaid economic leeches”).

  Even though it’s lucrative, think carefully before becoming a politician.

  How to Succeed in Politics

  But it is a lucrative road—no matter how inexplicable their wealth is. Beware: The key skill is lying well—to yourself and others. (It’s easy to tell when politicians lie—any time their mouths move. I wish that were a joke.)

  So how to get elected? Like other roads, start small. Locate an area where political turnover is high. Move to a medium-sized city there—small enough not to be a backwater and big enough that most people don’t know everyone else there. It’s good if their senior politicians are old or if term limits are imposed. Study what they espouse and what the citizenry believes. It’s easier in an area that leans heavily toward one party—doesn’t matter which. Hence, you need memorize and regurgitate only one set of lies at first. It helps to study what the opposition party says so you can tell lies that ridicule them, too. Your voters will love that.

  Get your lies down cold, then run for city council. Tell them what they want to hear. Blame the opposition party for everything evil. Claim you are the future—that you can see the future. Claim you did something important where you came from that you didn’t do, but they can’t prove it. At this level of politics, the people you run against aren’t skilled. They probably mean well and have their community’s interests at heart. So it helps that you don’t. In this book, it is only here where dishonesty pays.

  Three years later, run for county supervisor. Same game, same idiots, more incompetence, bigger venue. Six years later, run for Congress. The whole time you’re working off memorized lines based on what you know they want to hear. This is far easier than succeeding as a legitimate actor because the audiences aren’t as discerning. And they must elect someone. You may not believe this, but basically it’s right. Follow these steps, and you don’t have to do a useful thing the rest of your life. It is invented income and beats robbing banks!

  THINK TANKS RUN AMOK—A SHAM-SCAM

  An offshoot of political income is starting a think tank. It’s a different way to invent income politically. Think tanks are those not-for-profit organizations starring one or two charismatic individuals—championing some “cause.” The think tank takes “nonprofit” donations so the leader (or leaders) can think and write noble thoughts about their chosen crusade, and pay themselves huge salaries. Maybe they do “research,” which consists of questioning other like-minded people about their views, and then concluding the think tankers were right all along. The key: It’s a nonprofit but pays a future revenue stream—to you.

  The think tank’s purpose is to institutionalize a cause by like-minded people and build credibility by creating a corporate-like structure around it. Those funding think tanks think they’re contributing to some greater cause—that their think tank will make a difference with pondering, research, and publishing. But really, they create an annuity for think-tank founders and selected partners.

  Think tanks champion an infinite variety of causes like free markets or helping the oppressed, but at the root they’re similar. Take, for example, Reverend Jesse Jackson. Though Jackson once claimed an annual income of $430,000,41 he keeps his financial status a closely guarded secret. Part of his mystery is because several of his nonprofit organizations are religious, so they don’t file tax returns. It’s his prerogative to be secretive—it’s nobody’s business! (Well, perhaps the IRS thinks it is.) But why should people be ashamed of big income?

  Jackson’s nonprofits include People United to Serve Humanity (PUSH) and the Citizenship Education Fund (CEF). And in 1996, he founded Rainbow/Push as a for-profit.42 His foundations are meant to attract corporate capital for minority- and women-owned businesses as well as provide various other services. Over the years, various groups (including the Department of Education) have griped that Jackson’s groups are lax in reporting how their funds are spent. Jackson’s been in and out of legal strife on tax reporting.43 The think tank structure, no matter how lofty its cause, is about money—inventing an income stream.

  Nonprofits and think tanks come in all stripes. On the liberal side is John Podesta, former Bill Clinton chief of staff, and his Center for American Progress. Another Clinton staffer, Bob Reich, cofounded the Economic Policy Institute. Both promote a “progressive” agenda and “shared prosperity.” Conservative, but similar, are William Bennett and the late Jack Kemp who, through their Empower America, long paid themselves more than a million a year each. The list is long. Jim DeMint, famously the Senate’s fourth-poorest member when he resigned in 2012, massively upped his payday at the Heritage Foundation.44 You can find all the think tanks you want on Google. You can tell I don’t like this approach, but it makes money.

  In closing, let me say my editor didn’t think I should write about politicians because many readers have ones they love and hate and I’d likely offend some of you. Fact is: This book is about getting rich, not about what doesn’t offend you. I admit political creation of future income streams isn’t quite like the others in this chapter. But it can and does guarantee a lifetime of sometimes huge income for those willing and appropriately constructed to go after it. I had to put these guys somewhere, and the only other place I could think where they should go was to hell. So here they are.

  So if you want to invent income while contributing to the world, invent a new vaccine for a disease, a new marketing phenomenon, or even write songs or books for movies. If you just want to suck the public trough, politics is always waiting for you. Either way, keep all the rights.

  MONETIZED READING

  To set it and forget it—like Ron Popeil—and get guaranteed future income, do a bit of homework first. These books can help you build your own annuitized stream of forever money.

  Patent It Yourself by David Pressman. If you have a surefire idea that could provide income the rest of your life, make sure no one steals it from you by reading this book and then getting patents.

  The Complete Guide to Direct Marketing by C
het Meisner. A good how-to primer on how to be like Ron Popeil and take your message straight to the masses more cheaply and efficiently. This book shows you direct-marketing means and methods.

  If you want to write, read The Screenwriter’s Bible by David Trottier. Books are fine, but the money’s in lunchboxes and action figures. So write or adapt your own movie script, then sell it. This book shows you how.

  For political bucks, you must be able to convincingly lie. For that, read How to Lie with Statistics by Darrell Huff. A gem—it shows how easily statistics can be manipulated. Then take otherwise unalarming stats on the economy, for example, and twist them for your own perverted gain.

  The Guide to Inventing Income

  The way to make a million dollars on this road is to start with a million-dollar idea. This is all about imagination turned into growing a future revenue stream.

  Pick a talent and stick with it. If you can’t sing, you likely won’t be a Beatle. If you suffer intense writer’s block, you probably won’t be the next JK Rowling. And if you have a shred of decency, you won’t end up a rich senator. That’s how it is. Getting rich on this road is as simple as getting one super cool, patentable idea. More likely, you’ll have to keep at your craft for years before the big licensing fees kick in.