Saturday, May 14, 2011

A Gift to My Children: A Father’s Lessons for Life and Investing

A Gift to My Children: A Father’s Lessons for Life and Investing

By Jim Rogers
ISBN: 978-0-470-74268-6
Paperback; 106 pp.
US$16.00/S$26.70 including GST;

Available at all major bookstores

What makes for a successful investor? And more importantly, what makes for a happy and meaningful life? According to legendary investor Jim Rogers, the road to financial success and the road to happiness are one and the same.

Rogers co-founded the phenomenally successful Quantum Fund, which in ten years delivered a return of 4200 percent. He retired from Wall Street at the age of thirty-seven, and continued to manage and invest his own funds with great success.

A Gift to My Children marks his effort to share his wisdom and insights about finance, investing, and life in general with his two young children. It is anchored by the two basic rules Rogers invests and lives by:

The first is that you have to see the world up close if you're going to understand how it works.

Rogers begins with exhortations to work hard, think critically, trust your own judgment, and work to identify your passions and dreams beyond simply making money.

The second is that you must always question conventional wisdom, as many of his most successful investment strategies and ideas have resulted from swimming upstream.

Rogers is also a big proponent of the idea that it's essential for young people to study history and to experience world's culture first-hand through travel.

Rogers reveals how to learn from his triumphs and mistakes in order to achieve a prosperity:

(1) Trust your own judgment

(2) Focus on what you like

(3) Be persistent

(4) See the world

In December 2007 Jim Rogers and his wife Paige Parker and their two daughters, 7-year-old Hilton Augusta, nicknamed Happy,and 3-year-old Beeland Anderson, sold their New York mansion for USD16 million and moved to Singapore so that Happy can learn Chinese in a Mandarin-speaking environment.

Jim is quoted as saying: "If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia." In a CNBC interview with Maria Bartiromo broadcast on May 5, 2008, Rogers said that people in China are extremely motivated and driven, and he wants to be in that type of environment, so his daughters are motivated and driven. He also stated that this is how America and Europe used to be. He chose not to move to Chinese cities like Hong Kong or Shanghai due to the high levels of pollution causing potential health problems for his family; hence, he chose Singapore.

Rogers, who co-founded the Quantum Fund with legendary investor George Soros in the 1970s, has repeatedly said he believes China will be the next great country in the world.

"The best gift we can give our children is to let them learn Chinese and prepare them for the future," he tells The Straits Times, while carrying the baby in his arms.

Soon after Happy was born in 2003, they hired a mainland Chinese nanny in New York to teach her Mandarin. They also have a live-in nanny from Ningxia province here in Singapore.

This explains why the little girl is able to speak the language fluently, without the jarring accent that many non-native speakers have.

In fact, she is so confident in the language that she sang a Chinese song for the reporter and recited the national pledge in Mandarin, stumbling only towards the end as she forgot some parts of it.

"I like both Chinese and English lessons, but I like Chinese more," she says in Mandarin.

Her baby sister is also having an early start in learning the language--the nanny plays her Mandarin songs every day.

In the past few years, they have visited Beijing, Shanghai and Hong Kong many times to look for the perfect school for Happy, before deciding on Singapore.

"As much as we want to be in mainland China, the pollution there that you read about is real," says Parker.

"Singapore doesn't have that. It also has an extraordinary health-care system and great schools, and it's a wonderful place for a family."

Rogers says many people felt they were making a big mistake when they announced that they were uprooting to Asia.

"They thought we were crazy, because we were doing it voluntarily. Many people thought we moved to China. They don't know that Singapore is not China," he says.

"Some people told me I was smart to do it for my children, but they couldn't do it themselves."

Their plan is to "stay here forever, unless something else happens", he says, adding that he hopes to travel around China one day with his daughters as his interpreters.

When asked what his net worth is--believed to be billions of dollars--he replied: "I'm sorry, but I can't answer that."

After a pause, he adds, tenderly: "My net worth should not be measured in monetary terms, but it should be measured in how good a father I can be."


Jim Rogers: I said before that one of the bubbles I see in the world is tertiary education in the United States. It’s bankrupt financially and probably other ways besides financially. Business school is basically a waste of time. Most of what you learn is inaccurate and incorrect. Learning things like efficient market theory and some of the other gibberish that they keep putting out and Black Scholes…

All that stuff is totally wrong.

Those poor kids who’ve spent a couple hundred thousand dollars going to business school – not only have they spent a lot of money, but the stuff they learned was wrong. It was inaccurate. Yes, it’s got to change. It’s got to change dramatically.

I certainly was telling students not to go to business school. If you want to spend a couple hundred thousand dollars, I would urge you to go down and short soybeans one day or start your own business. I tell you, you short soybeans a couple of times, you’ll learn more doing that than you could in 10 years at business school.

If you spend your time and money in the real world, you’re probably going to learn a whole lot more than what you would at business school, most of which is wrong.

To give you an idea, in 1958 America graduated 5,000 MBAs a year. In 1958, America was the richest, most powerful country in the world. There wasn’t a number two. Now we produce over 200,000 MBAs per year, and that doesn’t include all the MBAs in other countries. There are tens of thousands in other countries. Everybody else has jumped on this MBA bandwagon.

So MBAs are a dime a dozen at a time when finance is coming under more and more pressure from governments economically, financially and every other way. So MBAs are a terrible waste of time, energy and money. You should take your couple hundred grand and start a business. You’ll learn a whole lot more even if you go bankrupt and lose everything, then you will at business school.

I tell people frequently not to get an MBA but to become a farmer or a miner or whatever. I’m dead serious about it. People have no concept of history. Nobody bothers with history. Everybody thinks history started the day that they could start watching television or read the newspapers, but that’s not the way the world has ever worked. So finance is under great bubbles. There are great places to avoid going forward. The United States is certainly in decline. The U.K. is going into decline. European countries are in trouble.

Some of the little anecdotes:

"Always eat something before you go shopping in order to prevent yourself from purchasing things that you don’t want or just to satisfy particular cravings that you have at the time."

I would say one lesson we all need to learn is that after you’ve had a great success, you really should be very worried. Let’s say you sell and say you’ve made 10 times on your money. You should be extremely worried. You should close the curtains, not read, look at the TV, or anything because that’s when you’re full of hubris, arrogance, confidence. You think, “God, this is something easy,” and you’re desperate to jump around to something new. You should do your very best to avoid making another play until you’ve calmed down a lot. Just wait. It’s a very dangerous time.

You have to figure out a way to control your emotions and deal with your emotions if you’re going to survive.

The problem is we all think we need to jump around all the time and be jumping in and out.

Patience is what most investors need to learn. You don’t have to be doing things all the time. Most of the time the best thing is to do nothing. You just sit with what you have as an investment and let it ride or sit and wait until you see someone sitting in the corner.

One of the best things a person can study is history. Everybody – I tell students all the time what should be studied and I tell them to study history and philosophy, which they of course hate. They say, “Oh no, I want to be rich.” I say, “If you want to be rich you should study philosophy because history will teach you that everything is constantly changing.” No matter what it is you know today, it’s going to be totally different in 10 years whether it’s your life, your friend’s, your job – who knows?

One needs to understand this about everything one is looking at today in your business, in your personal life, in your professional life. That’s one of the most important lessons that people have to learn because the world – and life – is very unstable, even though we all think we have a stable life.

Everything changes. It has changed and will continue to. The way you become successful is to understand that and capitalize on it.


William said...

Will get this book and learn more bout it. Seem interesting n fruitful book.


Maverick SM said...


Ya, you should read it; but read it philosophically such that you will discover the profound knowledge that would help guide your life and vision.

William said...

Bought the book and Finish the book, most of it already thought by you. Simple yet realistic approach to be successful. Save, save and invest to ensure we never have to worry about financial drain every morning. Thanks sharing a good book.