The Money Is In The Money
By Gideon Chukwuemeka Ogbonna
The Money is in the Money. An odd statement. But the story of Jeff Bezos gives insight into its meaning.
It was 1995. The internet was not an integral part of human life as it is today, but it was growing rapidly. Bezos saw the statistics and knew he had to be part of the internet revolution. He quit his job as Vice President of the hedge fund company where he worked, and from his garage in Seattle, he launched the online bookstore, Amazon.com.
Today, Bezos is the richest man on earth with a net worth of about $187 billion. But this climax is not the interesting part of Bezos’s story. The interesting part is this: Bezos’s wealth is not due to Amazon alone; he owns up to 15 other companies across different industries. He owns Blue Origin, a rocket company; Elemental Tech, a software firm; Whole Foods, a grocery company; Washington Post, a newspaper; and Kiva Systems, a robotic company. He also owns Goodreads, IMDb, and Alexa.
Bezos understands one of the simplest principles of wealth creation: The money is in the money. It is a principle with just two components: trend and diversification.
Trend: To create wealth, you have to know where the next line of wealth is. Between the 17th and 19th centuries, it was agriculture. The oil boom of the 20th century saw the emergence of wealthy individuals and nations. Then came the advent of the internet.
Spotting the trend requires sensitivity and foresight. Sensitivity — because old tools for wealth do not fade in the presence of the new and may get you distracted. Foresight — because to fully take advantage of the trend, you would need to see and trust its potentials even when you have no reason to.
Bezos had these two qualities. He was working as a hedge fund manager. He saw people make money from the investment sector. He could have stayed in this sector. But he shut out the noise. He had read that although the internet was new, web visits were growing at 2,300 percent every year. It was an innovation with huge potential. One he had to be part of.
It’s 2021. What innovation do you need to be part of? What trend do you need to key into? The money has shifted from oil and stocks to emerging technologies such as blockchain, artificial intelligence, robotics, cloud computing, nanotechnology, and so on. The money is also shifting to traditional industries evolving through the internet. Online learning is taking over traditional education. Drones are replacing delivery services. Streaming media is overthrowing cable television.
If you want to create wealth, align yourself with the trend. And when you do, diversify.
Diversification: Don’t just stop at the trend, widen your reach. Here, the money is in the money means that your next line of wealth lies in the wealth you already possess. Use the money you’ve made from the trend to make more money.
Bezos did not stop at Amazon. Despite the success of the company, he explored other income streams, other industries. When diversifying, you may not necessarily explore industries in the trend. You could diversify into old, yet relevant industries. Bezos owns a grocery company, an entertainment firm, a newspaper, a footwear company, and an online fashion store. These are clever investments even though these companies aren’t in the trend. People will always eat and may see movies while they do. They will also dress in smart clothes and footwear to go for a meeting, and as they wait for their meeting, they will likely read a reputable newspaper to keep themselves informed about world events.
All wealthy men diversify their income. Warren Buffet owns over 65 companies. Mark Zuckerberg owns over 5. Same with Jack Ma.
So what about you? How would you diversify your wealth? How would you apply this golden principle of the money is in the money?