The Real Secret to Becoming Rich as a King
By Len Penzo
I’ve always loved chess; I started playing the game at the tender age of seven and quickly fell in love with its intoxicating combination of tactics and strategy. Although I don’t play chess as much as I’d like today, whenever I have the opportunity I break out my oversized hand-carved wooden chess set that I bought in Tijuana many years ago as a ten-year-old for $10.
Last year I shared my love of chess with veteran financial planner Doug Goldstein while he was interviewing me for his Goldstein on Gelt podcast. So you can probably imagine my unbridled enthusiasm after Doug asked me a short time later to review Rich as a King, a book he co-authored with World Champion Grandmaster Susan Polgar that uses some of the most-seductive — yet very basic — strategies and tactics of chess as an eye-opening, easy-to-read guide for effective personal finance management.
The book’s concept is brilliant.
Rich as a King is based on the premise that people should design their financial goals with the same objectives that grandmasters do when preparing to play a game of chess. Then, once the overall strategy is in place, it comes down to developing and implementing a plan to carry it out.
The authors make a convincing case, covering everything from the importance of understanding risk tolerance and diversification, to the benefits — and limitations — of budgeting, as well as a thorough investment primer on stocks, bonds and mutual funds.
My favorite part of the book is the fast-moving final chapter, which describes 64 chess strategies to help you become “rich as a king.” Here is one example that compares poor chess-piece development to the danger of leaving all of your money in the bank:
If you keep each of your chess pieces neatly protected in your back row, you’ll lose rather quickly. Instead, activate your team by positioning each member where it can have a hold over the most turf. Likewise, if you only keep your money in low-yielding checking accounts … you will miss the opportunities for it to become more powerful. Doing nothing, eventually to become the target of attack, (is) like believing money in the bank will always maintain its value. Eventually, inflation will clobber it.
The book then builds on that example by concisely explaining in simple terms three ways to keep your cash working for you.