You’ve probably seen the “get rich quick” schemes offering you “rags to riches” in just days — “no work required.” Scammers often try to sell “fully-automated systems” that will allow you to rake in “millions.” Literally hundreds of thousands of people try them out, thinking that they can build wealth without using their backs or their brains.
Of course, almost all the offers are scams and you’ll be lucky to break even – if that. Most lose their money, feel foolish and walk away without learning an infinitely valuable lesson about finance, business and just money in general. That’s what this article is about: the financial planning lesson that is hidden in the obvious scams.
There is a system to everything, and success requires understanding and mastering those systems. This is one of the forgotten principles of, well, everything. If you want to pay off debt, actually join the rich class and live with financial security, then you have to go back to the basics: understand how systems work.
A World of Systems
Ever wondered why the scammers always argue that a system can be the cause of your wealth? All the spam seems to claim to have found “the” system or “the” method that will generate great wealth. There’s a reason they make that claim: they know that everyone subconsciously believes that there are “systems” to everything. They’re playing mind games.
The entire universe operates on the basis of systems – everything works a “certain way.” For example, we have solar systems, economic systems, financial systems, budget systems, and that’s just the beginning. This is why logical thought is so important; logic is a coherent system of thinking.
This isn’t exactly breaking news because most people know it’s true on some level. Science is the field of figuring out the way things really work. How do they know what works? They master the “scientific method,” or a system of thought that allows us to know what is true and what isn’t true.
Science isn’t the only field that is guided by systems. “Education” is the system of learning. “Business” is the system of making money. “Philosophy” is the system of thinking. We organize everything into specific systems, because that’s how the universe works.
The human mind is wired to look for systems, patterns and “ways things work.” This is why little children constantly ask questions. They want to learn about the systems that surround them – they are hardwired to believe that they are surrounded by systems. It’s not a choice, it’s a fact.
Understanding how systems work is essential to financial planning – or any planning, for that manner. Figure out how systems work, and you’re on a path to success. You have to understand the system before you can play or beat the system. The more systems you master, the more likely you’ll succeed.
Say Hello to Your New Uncle
If you haven’t read any of the Uncle Eric book series, you should – it will change your life. The Uncle Eric series is a collection of non-fiction books by renowned economist, investor, philosopher, teacher and author Richard Maybury. Giving a title to Richard Maybury is next to impossible – any one label simply doesn’t do him justice. He has mastered the systems of political theory, history, economics and finance, and explains the entire systems in every book in the series.
The first several chapters of each book goes through what he calls the “Uncle Eric Model.” It’s his theory of how systems work. He takes the basic idea a step further. Everyone has a “model”, or a system of thought. Basically, a model is our theory for how the systems operate. It’s our system for thinking about other systems! Once you understand it, you’ll never be the same.
In every book he literally ignores the topic of the book for a few chapters and launches into am explanationn of his philosophy on how the world works from the ground up – he explains his model for the benefit of the writer and reader. He starts right at the start and moves from there.
I was amazed, shocked and … confused. What on earth was he talking about? Why was he explaining how he thought about everything when I just wanted to read a book about World War II? He answers it in every book:
“Models are how we think, they are how we understand how the world works. As we go through life we build these very complex pictures in our minds of how the world works, and we’re constantly referring back to them — matching incoming data against our models That’s how we make sense of things.”
I was impressed. “Models” are pretty important to this guy. I started reading a lot of books, and became incredibly fascinated with the content. He literally just started blank-slate at the first of the book, and built his case point-by-point.
The last thing I’ve read by Maybury was his financial planning book. He spent the entire first half of the book — no exaggeration — explaining “models” again. I thought this was overkill, so I skipped some of it. The second half of the book was just as amazing as his other books, so I was happy. A few months ago, I went back and read the rest. I was amazed. If you haven’t read the book, I’d suggest doing so as soon as you possibly can.
The System for Success?
There’s a system of governing principles for everything, including business and finance. Everyone’s mind subconsciously is always trying to make sense of the world. We try to fit everything we see into our own models for how things work. Our brains collect data and organize it. We think that things just have to make sense, that principles are valid, and that there is some “method to the madness”.
This is a simple concept. It won’t take thousands of pages and dusty volumes to explain it. Reality functions in terms of methods, models and systems.
This means that there’s a system for success. It might not be “one-size fits all”, and it might be fuzzy sometimes, but there are general themes of the formulas that we can always see. We just have to take a second to lean back, analyze and try to connect the dots.
There are two ways of getting what you want done:
1. Work the system
2. Beat the system
There’s no way beyond these two principles. You have to have your own model for success, your own system for making money. It’s just that simple. Of course, this begs the question: How do you know a good system when you see one? That’s easy…it has to work. If it works, you’ve found a system and you can replicated it, doubling your money over and over. This is how the rich make money. This is obviously a simplified understanding, and we’ll certainly be talking about it more in the future.
So if you ever read about someone offering a system that makes money, always ask for proof that it works. Not just a couple of examples, but statistics showing that it actually works overall. If they can do this, you’ve found a system worth trying out. You’ve found your system.
Summary of Systems and Models
Reality works with systems. There are systems to everything – business, finance, sports, math, science, etc. If you want to do something well, you need to master the system. The more systems you understand, the more likely you’ll succeed.
I’ll be basing the rest of the financial planning articles on the idea of systems and models, so make sure to subscribe – I’ll make sure you get the updates without having to constantly check for them yourself.