Three Things Investors Can Learn From The TV Show Gold Rush Alaska

by Hank Coleman

Gold Rush television show logoThere is a new television show on the Discovery Channel called Gold Rush Alaska that is just fascinating to watch. A group of six men who have been down on their luck try their hands at mining for gold in Alaska in the hopes of striking it rich. The reality show follows their exploits through the entire summer as they try and find gold on a gold mine they leased. The television show has proved to be incredibly popular. It series premiere was the number one cable program on television during primetime on Fridays among key demographics such as households, people age 25-54, and people age 18-49. It has been watched by an average of 3.3 million viewers over the course of its season. But, despite the show’s popularity, there are several lessons that investors can take away from these minors’ exploits.

Avoid Quick Rich Schemes

Gold Rush Alaska on Discover ChannelGold Rush Alaska features six men who have been down on their luck because of the recent American recession. So, they sold most of their possessions and racked up over a quarter of a million dollars in debt to stake their claim on an old gold mine on the Alaskan frontier. Unfortunately, most of the men featured on the show have had unrealistic expectations of the returns they would see. The leader of the group persuaded many of the others to come to Alaska with the expectation of finding over $1 million worth of gold. After months of digging, equipment breakdowns, and cash flow shortages, the crew ended up with only a few thousand dollars of gold. While there are two more episodes of the first season left to air, there is little time for the men to find more gold before the Alaskan winter starts to set in, freezing the ground, and making digging impossible.

Don’t Investing In Things You Do Not Understand

The six miners have spent months digging for gold with very little results while burning through what little working capital they had saved up or borrowed before the expedition. Several episodes of Gold Rush Alaska focus on the men setting up their mining equipment only to find out that they did things wrong and having to make modifications or start over. They did not fully understand what they were getting into before they started. Warren Buffett, the world’s greatest and most famous investor, often says that investors should only invest in what they know. Whether it is stocks, mutual funds, or gold mines, staking your financial future and livelihood on ventures you do not understand is foolish and can have dire consequences.

Having A Good Team In Place Is Very Important

To say that the gentlemen on the Alaska Gold Rush team do not always get alone would be an understatement. Many of the early episodes focus on infighting amongst the group as frustration builds over not finding much gold. The end of the season focuses the fights on the gold claim owner’s inside man who has finally been brought in to protect the claim owners 20% ownership stake in the gold profits and lessen the crew’s learning curve. For every investor, it is important to have a good team. No man is an island. Investors should have a good accountant or financial planner if needed. Picking the right personnel for any team can be the difference between winning or losing, or in this case, it can be the difference between profit or utter financial despair.

There is no getting around that Gold Rush Alaska is a very entertaining television show, but it is almost a tragedy instead. It is almost like a car wreck that you cannot turn away from. These six men have risked it all for a quick win without realizing just how hard mining for gold in Alaska can be. There are many correlations that investors can find between the show and investing in stocks, bonds, or mutual funds. There are no quick gains or get rich quick schemes that will work. Investing, and gold mining, is long hard work, but it can be done profitably. The secret is knowing what you are doing in the first place and having the right team in place to make whatever venture you undertake a success.

Photo provided by and used with permission of the Discovery Channel.

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{ 6 comments… read them below or add one }

Ron February 11, 2011 at 7:36 am

I watch the show but it drives me up the walls. Every week *something* goes wrong. These guys are in perpetual crisis mode and the solution — “Call a meeting.” Sheesh, these guys have as many meetings as I do and I work in an office!

I wonder how much The Discovery Channel is paying them because this has been a major income producer for the network. Given the success of the show (primarily because of its get-rich-in-four-months slant), I’d be willing to wager they earn more from the show than from gold mining and it comes back next season.

rj Livingood February 21, 2011 at 10:38 pm

IT CAN BE DONE>

1.personenl. It only takes a 4-6 man team to retreive gold.
men should be single or has a wife willing to work as much as the men. they aes self sustaing they take care of there own food and lodging what ever they pay for themselves is up to them and has nothing to do division of the gold

2, equipment, do you really think it takes a $100,000.00 of high tech equipment to bring $1000,000.00 of gold to the surface. most of it is alredy right therein front you just do a few pans and look into the black sand. I you have a bad day which you will, just light a bon fire that night and blow some steam off, but stll be in shape to work te next day,

3. think like the military, have a clear plan on what do, be able to adjust to unforseen cercumstances.

4, It doesn’t take a brain scientist to locate gold geography 101)

5. Id likkto talk about it more but its dinner time. Chow for now

Matt February 27, 2011 at 10:01 am

One thing this article fails to mention is that this is a reality show. We may never know the money they made as a show alone. Not only are we unsure of that we don’t know how much the influence of being paid to be on TV influenced how they were portrayed. The show isn’t a good example of the great points you make based on that alone. I would agree you make valid points to anything else besides a tv show. The ratings alone probably helped them get their money back and for the next season get the right experience and investors on the sole idea of a tv show. Once again let me reiterate you’re points are perfect had this not been a reality series that fame and glory without actually making a penny in gold could be far more worth it to them than gold itself

Matt February 27, 2011 at 10:05 am

Based on the how alone and then popularity I’d invest a ton of money into the show franchise whether or not they see an ounce or not. I strongly believe the reality show was a palm B backup for the funding and next season they will mAke a killing!

ross May 18, 2011 at 6:16 pm

that is a great show (very entertaining), but the guys were so far in over their heads it wasn’t even funny. But they were persistent, and almost had it figured out by the end. I’ve heard that they are going to do a second season, and now that they have the process down, hopefully they will make some money this time.

Now that the show is popular, i bet the discovery channel will kick in some cash for round 2 😉

Jay January 26, 2016 at 3:42 pm

It was never about the physical gold. It was about marketable content and the connected merchandising opportunity. That is the pot of gold.

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