Experience is the worst teacher. It gives the test before giving the lesson.

—Jim Paul

Back in my college days, my friends and I would go on an annual canoe trip down the Manistee River every spring in the middle of nowhere in Northern Michigan. It was something of a last hurrah before school was out for the summer. During my final trip down the river before graduating we were picked up and driven back to our campsite by the owners of the canoe rental shop after a long day in the sun. A group of us began to wax philosophical with the canoe rental owner, a guy in his mid-to-late 30s.

He shared with us what it was like living in a rural area with his wife and young child. It was a simple, minimalist lifestyle. They lived in a small, beat-up trailer, didn’t have many material possessions, and didn’t make a lot of money from the canoe rental business. They both had to pick up odd jobs in the winter to stay afloat.

This was during the tail end of my college experience when my peers and I were looking for our first jobs. We were all worried about how much money we were going to make and the status of the jobs we would land. I remember being struck by this guy and his wife, living a very simple life in the middle of nowhere, but being completely satisfied with what they had. They got to work outside during the summer and be on the water all day. Their work schedules were flexible, and they were their own bosses. They worked together and got to spend quality time with each other every day. They didn’t have much in the way of material possessions, but they didn’t want for much either. Their story has always stuck with me because it showed success and happiness in life don’t always follow the same exact path for everyone.

Having a rich life means different things to different people. There are a multitude of ways to find happiness at different income levels or standards of living. But one sure way to ensure you’ll never be totally satisfied with your life or your financial situation is if you’re constantly caught up in the allure of more. Financial writer Nick Murray once wrote, “No matter how much money you have, if you’re still worried, you aren’t wealthy.”^[1]

Having a high net worth and living a rich life are two completely different things. A survey of people with a net worth of at least $25 million (excluding their primary residence) found almost one-quarter of this group said they worry “constantly” about their financial situation.^[2] Happiness researcher Michael Norton interviewed more than 2,000 people who have a net worth of $1 million or more to ask them how happy they were on a scale of 1 to 10. He then asked how much more money it would take to get them to go from their current level to a 10. Norton said, “All the way up the income-wealth spectrum basically everyone says [they’d need] two or three times as much” to be perfectly happy. ^[3]

In some ways this says a lot about the human desire for progress and the will to improve your place in life. But there’s also something to be said for contentment and the ability to appreciate what you have, especially when you’ve already achieved some level of success in your life, financial or otherwise. The problem is there will always be someone wealthier or more successful than you, so the comparisons will never stop if you allow them to take over how you view your standing in life. This allure of more can become a never-ending phenomenon, even for the most successful among us.

Defeated by Decency

Ulysses S. Grant is one of the great war strategists in history. Military historian John Keegan said of Grant, he “was the greatest general of war, one who would have excelled at any time in any army.”^[4] His time just so happened to coincide with a major turning point in American history, the Civil War. Grant was the architect of the North’s victory. After Lincoln’s assassination, he held the country together and made sure the 15^th amendment was upheld so African Americans would have the right to vote. Grant finished Lincoln’s mission to keep slavery illegal. Famous wordsmith Walt Whitman once wrote, “Out of all the hubbub of the war, Lincoln and Grant emerge, the towering majestic figures.”^[5]

Grant’s honor served him well on the battlefield, but it likely worked against him as a politician and businessman once his military days were over, leading the great general to be far too trusting of speculators and charlatans. While in office as president, Grant succumbed to Jay Gould’s scheming ways. Gould was a ruthless businessman and speculator who tried to take advantage of Grant to earn a profit. “The people had desired money,” before Gould, Mark Twain observed, “but he taught them to fall down and worship it.”^[6] Gould drummed up a scheme to corner the market in gold in 1869 by driving up its price through actions by the Treasury. Gould had been secretly stockpiling the yellow metal for months before convincing Grant it made fiscal sense for the US to avoid selling its gold reserves. With the Treasury out of the way as the biggest seller in the market, speculators could drive up the price, which is exactly what they did. Grant finally caught on and when the Treasury flooded the market by selling, prices crashed. The stock market also fell 20%, ruining many a financial institution and even impacting the economy.^[7]

Grant was not a wealthy man going into the White House, nor was he a wealthy man coming out of the White House, but he was certainly better off than most. After serving two terms as president from 1869–1877, he was unable to fund his own retirement, mostly because he sacrificed his military pension to run for office. A group of bankers on Wall Street set up a $250,000 fund to give him enough money for a retirement fitting a former president and one of the most decorated war generals in history. Donors even gave him $100,000 to buy a house on Fifth Avenue in NYC. This probably should have been enough, but Grant wanted more.

Eager to find his place in the business world, Grant entered into a partnership with 29-year-old Ferdinand Ward. Their financial company would be called Grant and Ward. Ward was called the “Young Napoleon of Finance.” Grant assumed it wouldn’t be long until he was a millionaire based strictly on Ward’s mind for business and finance. To get the venture off the ground, Grant put up $50,000. Ward and another banker were supposed to put up their own seed capital as well, but it turned out Grant was the only founder who actually ponied up any cash. The partnership was off to an ominous start, but little did Grant know it was about to get a whole lot worse.^[8]

The biggest problem with the business plan for Grant and Ward was that there was no business plan. Ward promised to deliver early investors 15–20% returns a month in profits. To put this into perspective, that’s an annualized return of 400–800% a year! Yet few of the investors bothered to question how they could earn such juicy returns. And when investors did ask how he made such enormous profits, Ward would tell them he had large government contracts for commodities which Grant worked out in secret. These contracts, of course, did not exist in the slightest.

Grant was more or less a figurehead for the company. He didn’t have any real-world business experience, so his sole job was to bring in more investors. Union veterans poured money into the fund based on Grant’s name alone. Ward had unlimited power in running the firm, signing the checks and running the books himself, a common theme that runs through many financial scams. Grant never reviewed any of the transactions or hired a lawyer to look at the business agreement. He often signed letters written by Ward without bothering to read them first. The former president never looked at the books, just the monthly statements produced by Ward, which he assumed were satisfactory. Grant boasted about the returns to others but never had an inkling as to how they were made. He told his wife not to worry about setting aside money for their children’s future. “Ward is making us all rich – them as well as ourselves.” When asked how business was going, Grant replied, “I think we have made more money during the past year than any other house in Wall Street.” He sang Ward’s praises calling him the “ablest young businessman he ever saw.” Ward was showered with gifts from the famous general including leopard skins, Japanese swords, and hand-painted bamboo screens, all from Grant’s tours around the globe. Grant even kept a pair of his family’s horses at Ward’s stables.^[9]

Little did he know, behind his back Ward called Grant a “child in business matters” and figured he would never be able to uncover the fraud Ward was quietly performing. Ward was described as having a “psychopath’s ability to counterfeit sincerity and present the exact image other people wanted to see.” After he was warned by a friend about suspect profits in the business, Grant replied, “These are able and experienced businessmen who are engaged with Ward. They would not be likely to take part in any foolish scheme.”^[10]

Yogi Berra once said, “I don’t want to belong to any club that would accept me as a member.” That should have been Grant’s rule of thumb when looking at the world of business deals. Ward began piling up enormous debts by using the same securities as collateral for multiple loans and he alone had access to those securities. While Grant was living it up spending money like it was going out of business, Ward was literally making sure they would go out of business. Ward was constantly running around town using Grant’s name to open doors to lock up new bank loans to prop up his scheme. William Vanderbilt, son of Cornelius Vanderbilt, and the world’s richest person at the time, loaned Grant $150,000 to help keep the company afloat. The next day Ward tried to get another $500,000 from Vanderbilt but this time was rebuffed.^[11]

Grant thought all was well while this unfolded, until he approached his office one day and was met by an angry mob of investors demanding their money back. They informed the former president the bank that bared his name had failed. This was a stunning development and completely out of left field to the man who assumed he was succeeding wildly in his business affairs. Grant told a friend that day, “When I went downtown this morning I thought I was worth a great deal of money, now I don’t know that I have $1; and probably my sons, too, have lost everything.” His life savings were gone. Instead of being the millionaire he assumed was on paper, Grant and his wife were worth a total of around $210, combined.^[12]

The financials showed the bank owed investors nearly $17 million against assets on the books worth just $69,000. It turns out Ward was simply cashing every investor check for his own personal use. Once he was in custody, Ward later admitted, “He [Grant] knew nothing. He took my word. He had the same information the customer had – and he had the same happiness, while it lasted.” Ward claimed not a single victim of his scam ever bothered asking to see the government contracts he touted to investors. He gloated: “The were so pleased with the show of big profits that they were only too glad to have their apparent winnings pyramided.” The stock market tanked in the aftermath of this calamity. Two other banks were forced to shut down, along with seven brokerages, from the collateral damage.^[13]

Grant even lost the entire quarter of a million-dollar trust fund that had been set up for him when he left office. Ward used the money to invest in the bonds of a company that defaulted on their loans. The Grants were forced to scrounge for the basic necessities of life in old age. They accepted charity from friends. There was an immense outpouring of sympathy for the Civil War hero who remained America’s most famous man. Grant was totally and utterly humiliated, admitting at the time, “I don’t see how I can ever trust any human being again.” Grant was so destitute that citizens began sending him money just so he could pay his bills. William Tecumseh Sherman, another architect of the Union’s victory in the war, said his friend had “lost everything, and more in reputation.”^[14]

Less than a year later, Grant contracted a deadly form of throat cancer. The general had put off writing a book for many years but knew his days were numbered and wanted to leave his family some money before he was gone. So he finally took up writing a memoir, to be published by Mark Twain’s publishing house. Grant finished his memoirs just one week before he died in 1885. The cancer in his throat was so painful he was forced to dictate much of the book to his wife in his final months. The Personal Memoirs of U.S. Grant is widely considered a masterpiece and one of the foremost military memoirs ever published. The book sold more than 300,000 copies of a two-volume set. It sold more copies in such a short period of time as any book up until that point in history. Grant’s wife received almost half a million dollars from the book sales.

Grant was a man of honor. He refused to write about his own accomplishments, instead letting his actions speak for themselves in his memoir. Mark Twain was instrumental in getting the book published. Twain, who himself made a string of terrible investments over the course of his lifetime, later said, “It was the unimpeachable credit and respectability of Grant’s name that enabled Fish and Ward to swindle the public. They could not have done it on their own reputations.” Grant biographer Ron Chernow claims Grant was defeated in this endeavor by “his own fundamental decency.” Grant was never a scammer himself, just supremely naive in his business dealings and his desire to get rich.

Don’t Try to Get Rich Twice

The value of Ulysses S. Grant’s trust fund ($250,000) and home in New York City ($100,000) when he got out of office would be the equivalent of millions of dollars today. While Grant never considered himself a wealthy man or a success in business, he was set up with a sizable stipend for his years after being in the top office in the land. His problem was he tried to take that money and multiply it. There’s nothing wrong with investing, of course. In fact, most retirees need to continue investing their capital for growth in their later years because life spans continue to rise, meaning your money may need to last many decades into retirement. But there is a difference between prudent investing and speculation. Fred Schwed Jr., author of the wonderfully titled book Where Are the Customers’ Yachts wrote, “Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little.”^[15] Grant tried to get rich twice and lost everything.

Warren Buffett once gave a talk to a group of MBA students at the University of Maryland. One student asked the Oracle of Omaha to name some common errors successful people make with their money. Buffett told the class, “Anyone who has become rich twice is dumb. Why would you risk what you need and have for what you don’t need? If you are already rich, there is no upside to taking on a lot more risk, but there is disgrace on the downside.”^[16] Obviously, being rich is a good problem to have, but there are a host of lessons we can learn from the myriad of successful people who have struck out in their financial lives or gotten caught up in a fraud of epic proportions. Most of the people who lose big or get scammed out of their money tend to blame extenuating circumstances. Grant was a man of honor and never blamed anyone but himself, but he failed to realize how a single mistake can destroy your wealth if it’s a big enough miscalculation. Just one wrong move and, poof, it’s all gone.

You only have to invest all your money in something you don’t understand ONCE to see it all vanish. You only have to turn your life savings over to a charlatan or huckster ONCE to see them bleed you dry. You only have to become overconfident in your investment skills ONCE to see a concentrated position completely go against you. You only have to place your trust in the wrong individual or organization ONCE to ruin your financial future.

But the flipside of this is true as well.

You only have to learn how to manage your money ONCE to preserve your hard-earned savings. You only have to come up with a solid business idea ONCE to create a powerful stream of income. You only have to get lucky ONCE to see your career, earnings, or business opportunities take off. You only have to get your financial affairs in order ONCE to begin seeing meaningful results.

Most people will never become a household name, create a sustainable business venture, or strike it rich on a transformative business idea. But everyone can control their own personal finances by making intelligent spending and saving decisions with their money. If you never learn the ins and outs of money management and financial decision-making it doesn’t matter how many times you get lucky. Eventually your luck will run out. There are a million and one ways to become wealthy but only a few simple ways to stay wealthy. And because wealth is always relative to your past situation, these ideas hold no matter how much money you have. Most people don’t become rich even ONCE but that doesn’t mean you can’t improve your lot in life by creating an intelligent financial plan and making better money decisions. Here are some ways to do this, regardless of your level of success in the political or business arenas:

• Diversify your money and your life. There’s an old saying that you should concentrate your investments to get rich but diversify to stay rich. This may be true for the most successful of businesspeople and investors, but the statement also reeks of survivorship bias.

  Nearly every success story is accompanied by a lucky break. Apple got bailed out by a loan from Microsoft in the late 1990s. Without it they may not have become one of the largest publicly traded companies in the world. Coca-Cola was created when someone accidentally added carbonation to medicinal syrup. Play Doh was originally supposed to be a wallpaper cleaner. Toothpaste didn’t take off as a regularly used product until someone added bubbles so people could get the sensation that it was actually doing something to their mouth.

  Diversification is important for people at any level of wealth. Peter Bernstein once said, “Diversification is the only rational deployment of our ignorance.” That includes investments as well as your career path. If you put all your human capital into one venture it can leave you exposed to the vagaries of consumer tastes, the economy, bad timing, or simply bad luck. It’s not just financial frauds that can take you down when you fail to diversify your money and business interests.

• Figure out your level of enough. After leaving office, Grant felt he deserved to become a millionaire to have his money match his status in the pecking order. The crazy thing is Grant had something money can’t buy – the respect of the country and the world at large. Every business owner and investor on the planet craved the respect and admiration Grant had received from the public but he just didn’t know when to say enough is enough when it came to his finances. The Chronicle of Philanthropy performed a study where they asked people who inherited money, “What amount of money would you need to feel totally secure?” No matter how much they inherited or how much they already had, the number people named was always roughly twice what they inherited.^[17]

  Berkshire Hathaway Vice Chairman Charlie Munger once said, “There’s an old saying, ‘What good is envy? It’s the one sin you can’t have any fun at.’ It’s 100% destructive. Resentment is crazy. Revenge is crazy. Envy is crazy. If you get those things out of your life early, life works a lot better.” Unfortunately, there will always be someone making more money or receiving more accolades or earning a better job title or wielding more power than you. You don’t have to look very hard to feel insignificant these days, what with the advent of humble-bragging and fake lives on social media platforms and the like.

  There’s nothing wrong with looking to better yourself in life. One of the biggest reasons we’ve experienced so much progress over the past few hundred years is that it’s part of the human condition to wake up in the morning and want to better your position in life. But people who don’t know when enough is enough can find themselves in trouble when trying to keep up with the Joneses. In the race of life, you’re not competing with your peers, co-workers, friends, or social media stars. You’re competing with yourself, or better yet, prior versions of yourself. This is especially true when it comes to finding contentment in money matters. Richard Carlson (no relation) once wrote, “It’s not that having a lot of things is bad, wrong, or harmful in and of itself, only that the desire to have more and more and more is insatiable. As long as you think more is better, you’ll never be satisfied.”^[18]

  When you have no idea how much money is enough for you, the simple answer will always be in search of more.