The first step to getting the things you want out of life is this: Decide what you want. – Ben Stein
Ben Stein is an economist and actor, who wrote a book in 2017, called The Capitalist Code: It Can Save Your Life and Make You Very Rich. He has an estimated net worth of over $5 million. So, I thought I would check his book out.
On my quest to follow the money, I have discovered lots of books, blogs, and information about money.
I have been told I am seriously into all things money. Friends sometimes call me “the money lady.” That’s fine with me. I take that as a compliment. There are much worse things to be called than that.
But, I get it. I do have a laser-like focus when it comes to getting things done. I can be a task-master. It comes naturally to me. I just can’t help it because I believe in finishing what I start.
I learned that lesson from one of my favorite childhood books Where the Red Fern Grows.
You could say I’m a bit obsessed with learning about money. However, it has served me well to know about personal finance. I have a six-figure retirement and save over 40 percent of my income. All that came from reading finance books!
That is how I came to find this book. It is a quick read as the book is on the small side at 146 pages in length. I knew the name Ben Stein, but I wanted to find out What is The Capitalist Code?
But first…
WHO IS BEN STEIN?
“I’m an economist by training. I don’t really work as an economist. I only worked briefly as an economist.”
There is a short bio description of him online at goodreads which states:
Jewish-American economic and political commentator, writer, actor and attorney. He gained early success as a speechwriter for American presidents Richard Nixon and Gerald Ford. Later he entered the entertainment field and became an Emmy Award-winning actor, comedian, and game show host. He is famous for his monotonous yet humorous voice in acting.
For those who may not be that familiar with the name you may remember him from his self-titled television show, “Win Ben Stein’s Money” or from the film, Ferris Bueller’s Day Off.
“As to a media personality, well that just happened in large measure because people found me amusing, and I did lots and lots of T.V. news interview shows.”
“It’s a great stretch for me to do my game show. It’s very hard. It’s not me at all. The only part that’s me is sort of when I’m sitting in the booth looking tormented. That’s the only part that’s the real me.”
In Ferris Bueller, he is actually discussing a real topic of the era. During the 1980’s, Reaganomics was also referred to as voodoo economics or trickle-down economics. I’ll give you more on this topic later, in a future post. 😉
Ben has written for publication’s such as Barron’s, The New York Times, Fortune, and the Wall Street Journal. And numerous financial books including this one.
WHAT IS CAPITALISM?
By definition, an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. You will often hear it referred to as a free market or free enterprise.
Simply put, capitalism is a system of investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained by individuals and corporations instead of by state-owned means. Participants privately own capital.
Ben says, “Free market capitalism is a fantastic wealth-producing system and allows individuals to amass wealth.”
In addition, “There is no freer, more diverse, and more equal opportunity employer than capitalism. . . If you can produce a large amount of excess over your costs, you get well paid. And if you produce very much more than you cost, you get rich.”
A free market of competition, not a central government or regulating body, dictates production levels and prices. True capitalism needs a competitive market because without competition, monopolies exist.
See my post in which I discuss monopolies for more information
WHAT IS BEN’S ADVICE ON CAPITALISM?
“If there’s a recession, I’d buy stocks. That’s when you make money: when markets are spooked.”
His primary objection of this book, is to get people off the sidelines and into the market.
“The sad fact is that spending rises every year, no matter what people want or say they want.”
This book gives you the #1 simple thing you can start doing today to grow your wealth — thanks to this “rigged” system known as capitalism.
Anyone can do it. You don’t need to have a Harvard or Economics degree or be a financial expert.
Basically, he wants you to do this: Invest in the stock market.
It’s a way to own a tiny piece of a big business and minimize your risk. Your piece of the American financial pie.
More specifically: invest in an index fund of the S&P 500.
You’ll own a tiny piece of a bunch of businesses and you’ll have more money when it’s time to retire.
That is also Warren Buffet’s advice among others.
See my post below on stock ownership
BEN ON WALL STREET
“Trying to pick individual stocks is a trap. I can’t do it. Warren Buffett can, but hardly anyone else can beat the indexes over a long period of time.”
It’s easy to think of big business as morally bankrupt, but it isn’t, really. Business leadership can make poor/unethical decisions, but being big doesn’t make them inherently wicked, and being a small business doesn’t make it inherently virtuous.
“I agree that there are some bad apples on Wall Street. I spent about ten years exposing corporate and financial fraud for ‘Barron’s’ magazine and I found a lot to write about.”
If you want to know more about stocks, you can read numerous books and magazines on the topic such as Value Line, The Intelligent Investor, and anything by Jack Bogle.
The key point is this: Free market capitalism is an incredible machine for making wealth. Corporations “rain money” year after year. If you don’t participate, you are making a huge blunder. It doesn’t take a genius, but it does take a plan—a “little bit of knowledge and an even smaller amount of action.”
SCARY STATISTICS
“The education system should teach us about money; it’s an incredibly big subject. I run into people all the time that don’t have the first clue of what they should do about money.”
Ben states the following about personal finance in America:
- Most Americans have not inherited wealth or a successful business that could set them up for life
- 80% of millennial’s have no plan whatsoever for retirement savings
- Many Americans are saving NOTHING
- The average person says they need about $50,000 per year for retirement; but only has savings to achieve 20% of that number
- We live in a country where more than half the people couldn’t come up with $500 in cash today if they had a family emergency
Source: GoBanking
WHAT YOU NEED TO DO
According to Ben, you need to save first, and then spend— automatically.
That’s similar advice that Shark Tank’s Kevin O’Leary says: “Don’t spend too much. Mostly save. Always invest.”
Barnes and Noble provides this overview of the book: harness the incredible power of the U.S. economy for enjoyment and security by being owners of profitable businesses-by consistent, conservative investment starting as young as possible in a diversified port- folio of stocks. Anyone can be a capitalist—and should be. All it takes is a little bit of knowledge and an even smaller amount of action. All it takes is The Capitalist Code.
BEN ON EDUCATION
“There is a clear, unequivocal, if generalized, connection between the amount of education that a man or woman achieves and the amount he or she earns.”
In the book, he shows what women can earn with a degree…
And men.
Agreed. I notice that the more education you have, the more informed decisions people tend to make.
Although, in my opinion, education is not an equalizer it does; however, provide you with increased opportunity, knowledge and exposure to scholarly information.
For most folks, a bachelor’s degree is enough. Particularly, from a reputable in-state public or private accredited institution.
I will never forget when I was reading Arnold Schwarzenegger’s biography when he saw a PhD professor driving up in an old, beat up car and he said to himself that if that is what an advanced degree gets you, then that guy was in the wrong career.
BEN ON SPENDING
“You must arrange your life from the very get-go so that you are spending less than you earn.”
Yep. I have learned it is not what you make, but what you spend.
You can totally blow through $200,000 USD a year after taxes! Just keep buying big homes and expensive cars.
BEN ON PICKING STOCKS
How should you invest?
“You don’t need to “play the market” and try to pick stocks. Just buying and holding index funds is a simple, effective method that beats money managers most of the time.”
How long should I hold onto stocks?
“Hold onto these funds as long as possible.”
Should I sell as soon as I get a sizable gain?
“Take advantage of huge tax subsidies for deferring investment gains.”
BEN ON WEALTH
“A highly disproportionate amount of the good things in life accrue to those who have financial capital. The easiest way is to own index funds.”
He states you must acquire wealth.
I too have read you must pursue wealth. You may not want to chase money, but sitting on your laurels won’t attract money and abundance to you. Wealth is something that is attracted to those that have beat inertia and exhibit exertion.
Well, there you have it.
Straight from the guy who is pretty focused on one-task himself as he continued to utter that famous line, Bueller? Bueller? Bueller? Bueller?
Just like someone had pity on him and answered him in the movie, Mr. Stein has answered a lot of your money answers in his book. The code is capitalist. He has given you the key to unlock the secrets on how to build wealth. So, use his key. Because guess what? The secret is out!
However, whether or not you FIRE, you can help others. It can be done with money or time. Either way, with financial independence comes the ability to choose what you do, as you become the master of your time when you no longer have to punch a clock.
