(Reprinted to Blog from email list of 6/25/05)

*** Bob’s Insider’s Message ***

I have exercised a staggering amount of power in my life. None of it fit any of the macho clichés.

If you want to know exactly how to handle huge amounts of money, you can get endless amounts of advice in your local bar. Find a guy who can’t afford a drink and buy him one. He will give all the advice you ever wanted to hear about how to make and use money.

People who have never actually handled large amounts of money can tell you exactly how you can make money grow and where it should be put.

Ask a real self-made multimillionaire exactly what you should do with large amounts of money and he will probably give you no answer at all. If he does give you advice, it will very cautious and lengthy and, above all, it will not be anywhere near as interesting as what you will hear in the bar from the guy whose drink you had to pay for.

The person who has never been responsible for large sums of money can tell you all about it.

Exactly the same rule applies when it comes to power.

At a recent convention a nice old guy was marching around telling everybody, “Mao Tse Tung said that power comes from the barrel of a gun.” This gentleman, of course, had never had any power at all, so he knew all about it.

The fact is that no war hero ever made any difference in real history. People worship war heroes and despise the guys in the suits. But the fact is that the reason thousands or millions of guys are out there dying in their uniforms is because a few guys in the suits PUT them there.

Much more common is another piece of Wisdom people who have never had any power or money love to repeat:

“Power is all about money.”

The wonderful thing about this piece of Wisdom is that it sounds so good. It is just the sort of thing a person who has never had either power or money loves to say, because it shows he knows all about both power AND money.

Boy, that sounds not only Practical and Wise, it sounds MACHO:

“Power is all about money.”

It reminds me of a poor little very rich guy named George Soros. Soros has billions of dollars and hates George Bush with an obsessive passion. He spent $27 million in the 2004 election and had not the slightest impact on the results.

It would have been less embarrassing for Soros if he had accidentally HELPED Bush by his efforts. What was really embarrassing was that he had not the slightest impact at whatsoever.

Money is exactly like water. As Rudyard said in his poem “Gunga Din,”

You may talk o’ gin and beer
When you’re quartered safe out ‘ere,
An’ you’re sent to penny-fights an’ Aldershot it;
But when it comes to slaughter
You will do your work on water,
An’ you’ll lick the bloomin’ boots of ‘im that’s got it.

When you don’t have water, water is everything. When you don’t have air, air is all that matters. When you don’t have money, money is all that matters. But if you DO have water, you may talk of gin and beer and despise water. When you have no trouble breathing, you use the expression, “It’s as easy as breathing.” When you’re broke, like the guy in the bar, money is everything.

Let me explain a simple rule to you about power and, separately, about money. Many, many times the Wall Street Journal has reported the results of actual experiments comparing highly paid financial experts with monkeys.

In every case, the monkey spins a wheel or throws an object and the investment is made on the basis of what the monkey hit on. Those results are then compared to a wide range of — let me repeat this –- advice given by highly paid financial consultants.

In every case, the results are dead even. But real people with real money still hired those same financial consultants and paid them the big bucks. These tests were scientifically conducted, but no one pays them any attention.

It just FEELS better to lose your money on the advice of big-time consultant than on the basis of a dart-throwing monkey. Everybody would consider you a complete idiot to bank on the monkey, and everybody, including you, would not feel bad about banking on the same consultant all the other moneyed people bank on.

In the real world, the fact that it amounts to exactly the same thing means nothing to you or to others.

Exactly the same thing is true of highly-paid political consultants. Once you are a name in the business of political consulting, you will always be a big name in the field of political consulting.

This is because of Whitaker’s Rule of Political Consulting. Two kinds of people hire big-time political consultants. One is the guy who has a lot of money and suddenly decides he wants to be a senator or at least a congressman. He hires a big name.

When he fails, nobody blames the consultant. It was silly, everybody says, for the rich guy to have thought he could buy that office in the first place.

The few times such a rich guy wins, all the credit goes to the political genius, and he charges more next time.

Have you ever noticed that, after a presidential campaign, you hear all about the geniuses who guided the winning campaign and you never see a word about the big-time campaign managers who LOST?

Losers are not news. You only hear about them when they win.

Whitaker’s Law of Political Consulting says that once a man attains the status of political genius, you will only hear about him when he wins. For that reason, once you become a big-money political consultant, you will always be a big-time political consultant.

The same is true of financial consulting. Nobody wants to hear about the losers. So they only hear about a financial genius when he wins.

So the guy in the bar actually believes that all a man needs to make his money grow is one of the financial geniuses only rich people can afford. That, he tells you wisely, is the only reason rich people make money and he needs you to buy him a drink.

I never had the heart to ask such a person if he ever heard of rich people who LOST money.

I never had the heart to ask that same man if he ever heard about it when a big-time political consultant LOST an election.

The whole point of buying the guy a drink is to relax and listen to his nonsense. It’s all for fun.

But out in the real world where real power and real lives and real money are at stake, this macho crap is much, much less amusing.

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Bob