Jul 31 2008
Buying diamonds from camel dealers
Twenty years ago, I was in my first professional job. To my chagrin, even though I was finally making a decent living, I was still always broke.
After thinking about it, I thought about my father. He was never broke. Ever. Money was never a struggle. I called him from Texas and after the usual fond greetings, I asked him about how he managed to always have money.
“Meet us in Vegas and we’ll talk about it,” he said.
Two weeks later we sat visiting. With his help, I began down a path of understanding investing, and money management.
One of the first books he told me to read was The Richest Man in Babylon. To this day, if I mentor someone, it’s the first book I recommend. There are many key concepts in there, such as “Pay yourself first.” But the one that also stays in my forethoughts is to never buy diamonds from a camel dealer.
This would have been good concept for those investors who got tangled up in a bank near my church: First Intergrity of Staples, MN. In this instance, First Integrity began investing in Florida real estate. During the real estate downturn, First Integrity’s deals dried up, and investors were left in the cold. The Feds moved in and sold out the bank.
The lesson here reminds me of doing diamond business with camel traders. In the past twenty years that I’ve been involved with investing, there have been many incidents of such dealings. Remember the mechanics who suddenly turned day trader back in the mid 1990s? And what about the barbers that suddenly began flipping houses a few years ago? Do you think the house flippers got caught when the bottom dropped out of the market? Many did.
The moral of the story is this: when doing business of any kind, do it with a person who has experience in that area. Don’t try to be something you are not. Never trust a person who doesn’t mind losing your money.
And if you never have read it before or if it’s been a while, pick up and enjoy The Richest Man in Babylon. You might find quite a few lessons that are much needed in your life.
