When it comes to a lot of things, I’m above average.

Handsomeness, for instance. I’m mucho good at that, just ask my girlfriend:

I have no comment at this time.

Well. Never mind.

At the risk of tooting my own horn excessively, I’d say I’m above average at accumulating capital. Part of that is because I’m a cheap bastard. I went to a baseball game last night and sat in the cheap seats, instead of blowing my cash on nicer tickets. I regularly stay in 2 star hotels, because I am the opposite of a hotel snob. There are a million other examples, but you get the picture. I’ve worked hard to get to a position of financial security, and I’m not about to waste it on nice hotel rooms and alcohol.

But as we all know, frugality is never going to get you rich. Sure, it’s an important element to anyone’s financial picture — after all, it’s tough to get rich when you’re spending it as fast as it comes in — but being cheap will only get you so far. If you’ll allow me, let’s compare it to baseball.

HEY. I HEARD THOSE EXASPERATED SIGHS. But from even the fellas? Come on.

So far in 2014, the two teams with the lowest ERA are the Seattle Mariners and the San Diego Padres. The Padres are nine games below .500, because their offense is 14 different kinds of terrible. Seattle at a more respectable five games above .500, but are still in 3rd place in their own division. Without a half decent offense (Seattle is 26th out of 30 teams in runs scored), they’re not really too successful.

These teams have great defense, but they still aren’t that successful. Compare this to Oakland, which has the best offense in the league and the 4th best pitching staff. Is it that surprising that they’re atop the standings? They have a terrific defense and fantastic offense.

You need to be Oakland. Not the city, cause it’s a dump. The baseball team.

Frugality is important, but so is earning more, as we’ve discussed more than a few times. But how do you guys go about it?

I won’t spend any time on it, since I’d just rehash stuff. I think that, providing the deals are good, you should buy real estate. You should look at college critically. You should focus on big wins when investing. And, when responsible, you should use leverage. And so on. You get the point by now.

Let’s instead on what you shouldn’t do, and that’s indexing. 

For most investors, indexing in fine. They don’t know much about investing, or the market, and don’t want to put in the work to learn about it. Sticking cash into a series of low cost index funds (like four, don’t go nuts) is a good enough solution to folks who want to put in 40 years and then put their feet up at 64 years old.

But around here, we’re more aggressive than that. We want to shrug off the working world for retirement at 63, dammit! Or maybe even sooner. Hey, whatever floats your boat. But you know what won’t get you to early retirement? Average returns.

Okay, that’s not entirely true. If you save 70% of your income and index, you’ll do fine. But how many of you are going to do that? I can, but that’s because I squat in my girlfriend’s Korean apartment for free. Besides, giving advice to people who save 70% of their income is dumb. If you’re making enough that you can save 70% of it and still have a reasonable existence, you’ll get rich despite yourself.

I don’t care what your method is, but for most of you, getting rich requires smart investing. Whether it’s real estate, or starting your own business, or even stocks, investing well trumps frugality every time. I had a lot of success investing in private mortgages (which I’m almost out of now, for obvious real estate bubble related reasons). I borrowed at 4%, lent out at 12%, and pocketed the difference. Sure, there’s an element of risk, which is why I limited my business to my (former) small town.

Anyway, indexing is fine if that’s what your goals are. Most people should be okay with it. But if you want more? You have to be prepared to put more in. And the biggest part of that is investing smart. Figure that out, and actually implement it, and you’ll do fine.

Tell everyone, yo!