An ordinary working person's fastest route to wealth

In his final article for interactive investor, former lawyer and City money man Peter Alcaraz describes the prize and the paradox that runs through the wealth game.

Peter Alcaraz read law and economics at Durham University and spent 24 years advising small and mid-sized companies on mergers, acquisitions, IPO's and fund raisings, first as a lawyer and for the last 20 years in corporate finance. At the age of 46 after reaching 'O' he left city life to write, study, travel and spend more time with his wife and two daughters. His first book, The Wealth Game - an ordinary person's companion was published in 2016 and has become a staple among wealth managers, business schools and private individuals wishing to develop their personal finance skills.

It has been said that 'to travel hopefully is better than to arrive.' I disagree. Future hopes and dreams undoubtedly comfort in the warm, fuzzy way of fantasy escapism and may inspire and motivate but they provide precious little preparation or assistance. 'Hopefully' implies uncertainty and doubt whilst journeying with it suggests that we lay ourselves open to chance in a kind of blind bet that everything will turn out all right.

The suggestion that this state is better than the target destination implies an extremely stupid or naïve traveller who has failed to think through the purpose of their journey. Is it possible that the destination was never considered or defined or, if it was, not properly evaluated? Or perhaps the prize was misrepresented and if so, by whom?

Better is to travel surefooted, knowing that the target is worth all your effort and sacrifice to reach it and with an unshakable belief that you will get there.

How can you achieve this? To replace hope with conviction demands an understanding of the underlying principles and rules (in this case, the rules of finance and human nature) and certain knowledge that you can play the game. The commonest failure arises from an inability to grasp basic financial concepts and / or a fatalistic view that one is lesser through circumstances or design and has somehow been singled out to fall short. For example, thoughts like: 'I am pathologically disposed or forced by circumstances to addiction, dependency, ignorance, laziness, greed, overspending, poverty, and so on' or 'I have no chance compared with others.'

To be certain that the prize is worth the effort, examine it, visualise it and meditate on it. Interrogate and challenge every hope, dream and preconception and take nothing at face value. Seek out others, old or young, who are financially independent and observe them, listen to their stories and note their suffering. Adopt wise and compassionate role models and learn from them. You may need to travel to find such people but they do exist and can be found. Your open mindedness and persistent investigation can reveal the true nature of the prize.

Now decide if it is worth the effort. If the answer is yes and you set out to win it, the trip itself becomes immensely enjoyable and continually satisfying. Of course, it is tough in parts but players understand that achieving any worthwhile goal requires effort and dedication through adversity. Certain times will be painful but they are painful for a purpose, a grand design and this knowledge sustains. As you develop mastery of your needs together with associated resourcefulness and creativity, the journey begins to deliver quality and richness at every level. Wonderful though it is to travel, arrival at O still beats it hands down.

In the wealth game, the prize is set at the outset and no number of winners will dilute it. Every player is allocated one prize of equal value. It is not transferable between players and there are no rollovers so any prize not won or claimed is cancelled. Prize details and related information including implications of being a winner are fully available.

So what's in the box?

You Win...

Every child's fantasy is to conjure up a genie who grants three wishes. Let's say that this particular genie, being wise and knowing the human condition, offers three baskets of wishes and allows the child to pick one from each. A wish must relate directly to the child or someone close rather than anonymous beneficiaries so it can't include things like 'end poverty' or 'world peace,' nor can it be a wish for more wishes.

The first basket contains tangibles—anything material that can be touched. The picker might opt for unlimited sweets, chocolate, ice cream, gold, diamonds, supercars, jets, boats, a farm, a castle, an island and so on.

The second basket contains personal qualities, so it might include such rewards as a perfect physique, beauty, superhuman strength, eternal youth, immortality, a cloak of invisibility, the ability to fly or time travel, x-ray vision, or the power to read others' minds.

The final basket contains outcomes​.​Examples are good health, loving relationships, happy and successful children, fame, power, and status.

In the wealth game the prize is a hamper bulging with items that are all available to winners. Like the genie's offering, these fall into the same three groups: tangibles, personal qualities, and outcomes. The inventory sounds a bit like a box of fortune cookies, although less abstract.

The tangible prize

You win a money pot ​​that yields cash year round sufficient to meet your needs as long as you live. This organic marvel is low maintenance and self-sustaining if treated with care and respect.

As a virtual pot it is fully portable and divisible and can be protected from theft or damage. It is your own private resource to be utilised.

The personal quality prize

You win a selection of exceptional, life-enhancing personal attributes each with a free upgrade should you desire it. Several (marked with *) are major qualities with greater-than-average upgrade potential.

The ability to control all your non subsistence needs​.* You have learned restraint andself-discipline. Upgrade allows complete mastery of all sense related pleasures and displeasures. With this, you can appreciate and enjoy the sight of natural and human beauty and man's creations, sounds, smells, tastes, and touches, but without craving them or needing to utilise, possess, or cling to them.

Patience.​ Through saving, compounding and living within financial laws you have developedpatience and seen its rewards. This will only grow over time.

Mental endurance.*​ The marathon that is the wealth game leaves you highly toned andpossessing considerable stamina. This mind training however has been a by-product rather than the main event. The free time and space afforded by O allows you the option to switch focus and develop mindfulness and concentration as a priority and to enjoy the insights and equanimity that these deliver.

Detachment.* ​You have learned to be dispassionate, recognising that everything isimpermanent and subject to change. The higher level award offers a deeper understanding of this and promotes objectivity and perspective. You become aware that cravings, aversions and clinging cause suffering.

Resourcefulness and creativity.​ These have been precious commodities during the gameand now flow naturally, allowing you to add colour and vitality to all activities. No thing or action, however mundane or thankless it might appear, is beyond your power to rekindle as interesting and rewarding.

Energy.​ Your training has created a well of energy that, although depleted, is deep and refillsnaturally. The game has forced you through a kind of physical and mental boot camp. The call to action is now deeply ingrained and won't leave you. This feeds effort and endeavour. Your energy will not be sapped by the now unnecessary mental and physical efforts of providing financially; it can be spent carefully and economically to maximum effect elsewhere.

Finance skills. ​An ability to grow wealth and use money to make more is now second nature.Technical knowledge has combined with experience and learning from mistakes to create a powerful platform for continued wealth creation. You can choose whether to continue to engage and take this further or to adopt a passive approach. Finance is fun, as is making money and just because your needs are now satisfied it doesn't mean that it can't be pursued as an intellectual and practical hobby. A surplus of money after reaching O is not a problem as there is always a good home for it.

Commercial nous.​ This is now ingrained. Its effect is to simplify and reduce, to direct you tosound decisions quickly and efficiently without fuss or waste. In the distilled, potent world beyond O your commercial skill sits comfortably. Further practice and application sharpens it.

Self-sufficiency.* ​Not only do you understand this, but you have also lived it. You are nowfully aware that from birth we have no innate rights or entitlements that all we want must be acquired or developed and that very little in this world is given up for nothing. You have also observed that inequality isn't solved by people being dependent.

Confidence.​This flows from your success in reaching O and every other achievement alongthe way. It dispels doubt, promotes modest self-assuredness and has universal application.

Humility. ​Reaching O by your own efforts has taught you how difficult a challenge it is forthe ordinary person. Further time spent in the field only serves to broaden this sentiment.

Compassion.* ​Arising from humility, your own suffering and the practice of detachment andobjective insight, you now have a more than adequate grounding from which to exercise this quality if desired. It feeds numerous virtues and promotes actions and results that lead directly into contentment.

The outcome prize

You win one guaranteed outcome: the freedom to stop paid work. If you choose to take up this option, you win a great deal of additional spare time. Based on 48 five-day weeks, this amounts to 240 free days every year. In addition, the remainder, which was supposedly free before you stopped work, also expands. Your newfound space is also free from thoughts and worries about the job, the commute, the people, and the money.

Further outcomes, good and bad are discussed in my book.

The Paradox

O marks the end of the wealth game. You cross the finish line and enter a new place, a vibrant ecosystem brimming with opportunity and deep sustainable rewards. I think of it as a kind of paradise.

Reaching this goal with life to spare is the financial equivalent of climbing Everest unaided; it's an extraordinary feat. But here, unlike at the mountain summit, the air is rich and easy tobreathe and the routes ahead are not all downhill. It marks the end of the beginning and the start of a life potentially richer in every department. You have won the freedom to choose how to spend your time—on grand schemes, idleness, or both. The prize is there to be enjoyed. Why not claim it?

But a primary motivator has gone. In reaching O you accept that you don't need to work for money again so whatever your reasons are for carrying on work, they don't include that one. I believe that a human's drive for financial self-sufficiency is primordial, a modern-day version of the quest for shelter, food, clothing, warmth, and safety. In today's survival stakes, it ranks second only to personal security. If this is right, achievement of such a fundamental goal leaves a gap and raises the obvious question: What do I replace it with?

It is easy to underestimate the effects of such a powerful motivator on our actions and thoughts and, therefore, the consequences of losing it. I have seen people in the run-up to O deliberately create new needs ​​or effectively raise their target NAN ratios​​ to delay arrival at this position. The extra house, extension, car or cash safety buffer may be necessary for you to reach O but it may not be and where do you draw the line? By exercising this kind of self-trickery it's possible to stave off reaching O indefinitely.

The mind is too smart to be completely fooled by this. Somewhere deep within is the knowledge that the delay is contrived and that your precious primary motivator, once pure and authentic, is now manufactured and artificial. Its real purpose is missing; the whole exercise becomes hollow. Doubt creeps in, as do the questions of why you are still doing what you're doing. What was once simple to answer is no longer, and change is upon you.

From the moment you enter the no-man's-land between thinking you are at O and knowing you are there, change begins to arrive, imperceptibly at first. More of a general feeling than describable or tangible elements, it gathers speed as you accept your position, eliminate doubts and celebrate your arrival. In a short time the welter of changes become tangible and starts to flood like a tsunami. I have seen talented, successful players swept off their feet and washed into a maelstrom of swirling emotions, self-doubt, and restlessness—at least five high-achieving friends of mine are taking antidepressants and having counselling. Some have yet to reach O, but all are firmly in the grip of personal crises of confidence, feeling anxious, overwhelmed, and unable to see clear, positive outcomes.

The problem has been described by one friend as a perfect storm, where a small number of changes (or a single change) could be managed but because these are compounded simultaneously with so many others, the situation becomes chaotic and untenable, like a violent weather system combining with a seabed earthquake, a continental shelf and the meeting of opposing ocean currents at a headland. In my friend's case the difficulty is exacerbated by high intellect and a brain that operates unusually fast but has no 'off' switch. High-speed processing and analysis generates multiple options and solutions that themselvesare dissected and evaluated taking him to a point far from the original question and unable to retrace all the steps. The same exercise is replicated for other changes, problems and questions.

Of course, for anyone who reaches O, life is as simple or as complicated as you make it. Long ago the underlying causes of suffering were prescribed by the Buddha: craving, aversion, and attachment. Deal with these, and you minimize suffering.

In conversation with Anathapindika, a great banker of his time, the sage also described four kinds of happiness for the layman who leads an ordinary family life: first, enjoy economic security or sufficient wealth acquired by just and righteous means; second, spend that wealth liberally on yourself, your family, your friends, your relatives and meritorious deeds; third, be free from debts; and fourth, live a faultless and pure life without committing evil in thought, word, or deed. Buddha reminded the banker that the first three are economic and that material happiness is 'not worth one-sixteenth part' of the spiritual happiness arising out of a faultless and good life.​*

*Walpola Sri Rahula, ​What the Buddha Taught​ (Gordon Fraser, 1978). Derived from Anguttara Nikaya II.

I intend to grab my freedom with both hands, do my best to upgrade every item in the personal-qualities prize and pursue a range of 'spending suggestions'. Here are my top 10:

1. Develop greater loving kindness, compassion, altruistic joy and equanimity - actions as well as words
2. Tend to my body - healthy eating, exercise, and sleep
3. Purify and train my mind - virtue, mindfulness, inquiry, and meditation
4. Investigate and learn - study and practice to improve knowledge and capabilities
5. Socialise - physically connect person to person and with the community
6. Play - games, sports and other activities and generally rediscover being a child
7. Travel - independently explore the globe and meet its inhabitants
8. Build or make something (anything) creative - a book, garden, orchard, bee area, house, boat, wine cellar, or business
9. Idle and contemplate - savour the moment, enjoy space and let time pass without anxiety (this is a hard one!) 
10. Give away - the acid test of letting go is releasing time, effort, money, and possessions.

Just writing this is sobering as each activity is a multi-layered world in itself. None of them is new yet they look new. They have been released from the shadows of the previous number one on the list: 'provide for the family' which dominated for so long. The mountain has gone and the occupants of the valley can at last see the sun, the sky, and an endless horizon.

This brings me to the end which is where I began. The original title for my book was Travelling Light ​and my intent was to extol and flesh out the benefits of unencumbrance. Itsoon became clear that this appealing philosophy didn't answer the bigger questions of how to become financially self-sufficient and know whether you've arrived.

The book runs two seemingly opposing themes: the first is an ordinary working person's fastest route to wealth; the second is the weight of wealth and materialism and the imperative to detach from them. Surprisingly, the two coexist perfectly: acknowledging the second helps you achieve the first, which in turn helps you understand the second better still and so on. They are linked. It's a game.

Herein lies the paradox. Self-sufficiency requires financial independence which requires wealth generation which requires saving and investing which requires working for money and not wasting what you earn. You work better and save more when travelling light, consuming and accumulating less. The lighter you are, the faster and farther you travel.

You generate more wealth the less you need and less wealth the more you need

By definition, any need counts against net worth so a player will be wealthier by having needs of £1 compared with needs of £2. Neediness erodes wealth.

And what of contentment? It has been said that adults are ready to marry only when they realise they can live a fulfilling life on their own. Subsistence requirements aside, I would argue the same for wealth—that you are best suited to money when you clearly see its challenges and limitations but can be detached from it without suffering. In other words, when you realise that you don't need it to be happy.

By learning to live with less than you thought you needed or wanted and discovering that instead of being dreadful, life offers an inexhaustible supply of pleasures, small and large, you can hone your ability to find contentment. Perhaps even this goal can blur and lose significance. What value is happiness tethered to suffering compared with wisdom, compassion and equanimity born of detachment? The scope to discover such a prize is tantalising.

The End

Peter Alcaraz is a freelance contributor and not a direct employee of interactive investor.