What skills do you need to be rich?

It might be obvious, but you should have some math skills. First of all you should know the for basic operations and how to deal with the percentages. Of course, you need to know to read and write. "Hey, I am not a moron!" you probably think, but having this skills is a must. Why? Look at this situation: you want to buy XY-Cola and you find that you can get A) one pack with six cans for 10$ or B) one pack with 8 cans for 12$. Which one should you buy? The point here is to determine how much a single can costs. For A) that is 10$/6 and for B) it is 12$/8. And what now? You should compare the numbers 10/6 and 12/8 with some help of calculator you can find that in the first case the cost of a single can is 1.66$ and in the second case it is 1.5$. That means that the second offer is better.

What does it have in common with being rich? First of all, in order to be rich you must live frugally, therefore you should buy only products with the best price available. To do this you should deal with the process of comparison on the fly. Do you go to shopping with paper, pen and calculator? Probably not. Although it might not looks like that, the same process and skill are used in the process of investing. You should invest only in the best opportunities, or to say it the terms of price you should buy only the best investment opportunities.

The next step is to compare two investment opportunities (or more of them). There are basically several parameters involved. The main parameter is Return rate and it means how much return will I get after certain period of time (usually after one year). It is usually calculated as a percentage of the invested amount. The greater percentage means better results. For example, Return rate of 10% means that if you invest 1000$, after one year you will have 1000$+1000$*10%=1100$. It is also important to know how risky is a certain investment. This parameter can be also calculated an is usually called the risk (quite obvious, isn't it). Risk or volatility is calculated as a Standard deviation of Price history. Standard deviation is a measure of how far are the members of the sample from the average of the sample. More about Standard deviation you can find on http://en.wikipedia.org/wiki/Standard_deviation. It might look horrible, but you can calculate it quickly using some spreadsheet program. We can look at this four samples {0,0,10,10}, {9,9,1,1}, {6,4,4,6} and {5,5,5,5}. The average for all of them is 5. Standard deviations are
5.77, 4.62, 1.15 and 0. We can see that in the first sample value can change a lot and that it carries the highest risk. The fourth sample doesn't carry any risk (value is always 5). Therefore the smaller Standard deviation the better. There is a theory that helps us to create the most efficient portfolio (meaning the best return rate and minimal risk). For now we can say that if we have have to choose between two investment opportunities with the same return rate, we will select the one with smaller risk (i.e. Standard deviation)

It is mentioned above that using a spreadsheet program can help a lot. That means that some kind of Computer skills are necessary. It is not necessary to be a programmer in NASA. Basic level of computer knowledge is enough with some knowledge about spreadsheet programs (MS Excel, Open office Calc, or some something else).

Also you will need and access to the Internet, and have some Internet skills. Expert knowledge is not required, just surfing and searching the net.

An that would be all for the beginning.