Rob Long
A very rich investor once told me the secret to becoming a very rich investor. In my experience, very rich people are more than willing to hold forth on their theories and systems for getting – and keeping – their riches. You don’t even have to ask them. Just glance casually in their direction and you’ll find yourself cornered and then treated to a play-by-play account of every smart financial move they ever made.
That’s the very rich for you. The very very rich, on the other hand, tend to keep to themselves. Ask a very very rich person for financial advice and you’ll probably get zero in the way of actionable information. Maybe, if you’re a close friend or family member, you’ll catch a few vague axioms – “Try to buy low”, perhaps, or “Stay diversified” – but that’s about it. The richer you are, the more parsimonious with useful information.
My merely rich friend, though, had one interesting insight. Always invest, he told me, in a product or service that assumes that people are, deep down, extremely lazy. Never, in other words, put your money into something that makes people work harder.
His example was the kettle bell, which is a diabolically simple piece of fitness equipment. If you’ve never seen one – and you have my sincerest wish that you haven’t, because if you have you’re spending too much time at the gym – it’s a heavy round metal ball, about the size of a decent melon, with a tea-kettle-like handle attached to it. You’re supposed to grasp it by its handle and then do a series of movements – snatching it from the floor, swinging it up and down, lifting it with your arms – until you’re so exhausted that the people around you are in physical danger of having the thing slip from your grasp and smash into their skulls.
The kettle bell, fitness experts tell us, is the most efficient and cost effective way to get and stay fit and trim. Used properly, it’s the only equipment you’ll ever need.
It’s also one of the cheapest. Kettle bells have no technology, no buzzers or bells. Kettle bells cannot report to your Apple Watch or Bluetooth their information to your computer. They’re just a drab piece of heavy iron, no fun whatsoever.
The elliptical machine, on the other hand, is a complicated and expensive appliance and with its twin brother, the treadmill, it basically takes up all of the floor space at every gym and fitness club around the world. Neither one is as effective as the kettle bell, but unlike that unforgiving and nasty lump of misery, each can be set to the lowest and most relaxing setting, allowing the user to saunter along at a civilised pace while still pretending to be getting a workout.
The machines are much better investments than the kettle bell. The margins are fatter, the price is higher, the upside is almost limitless. You can get rich making and selling those machines, and investing in the companies that do. It’s hard, though, to get rich selling blobs of iron. The rule here is clear: put your money where people can express their deep and inherent laziness and watch the cash roll in.
Years ago, the music business learnt this lesson the hard way. Buying, storing and listening to music at home was a painful ordeal. (It wasn’t really, but in retrospect, it certainly seems that way.) Recorded music came in unwieldy packages and odd shapes. Vinyl LPs were wide and flat and given to warping and scratching. Stacked like books, it was almost impossible to sort through them because the spines of the cardboard sleeves were too narrow. Compact discs, which came later, were impossible to open without slicing the tender skin under the thumbnail. And if you owned more than 30 of them, they were a pain in the neck to store – little bits of plastic were always breaking off the cases and, like LPs, they were hard to sort.
Back then, no one really bothered to sift though their music collection to find something to listen to. What they did was buy new music, which sat out for a few weeks in continuous play, was put on the shelf, forgotten about, and replaced by new stuff. All of this was terrific for the music industry until some evil mastermind invented the MP3 player, and then the smartphone, which suddenly made storing, choosing, and listening to music effortless. No tiresome walks across the room to the record collection. No squinting at CD racks. No sliced-up thumbs. The Lazy Index held true: 20 years ago, if you had invested pots of money into smartphone technology, you’d be rich. If you had invested the same amount in the music industry you’d be reusing tea bags.
Applied to almost any other industry – fast food (think Starbucks), motor cars (think self-driving vehicles), movies (think Netflix and streaming services) – the Lazy Index holds up. The growth areas are almost always those that allow us to sit longer on the sofa, avoid breaking a sweat and maybe squeeze in a nap. I plan to take my very rich friend’s advice, just as soon as someone starts a stock fund with this focus. I’m sure I could put together one of my own, but that seems like a lot of work.
Rob Long is a writer and producer in Hollywood
On Twitter: @rcbl
