How to get rich, p.3
How to Get Rich, page 3
So that’s where we’re aiming. For starters, anyway.
At the top end of that range, you might (just might, mind!) creep into the last few places on the Sunday Times Rich List, compiled annually by Philip Beresford and his team of researchers. The STRL is the gold standard of league tables of the wealthy in Britain.
Your rank then would be around “999 equal” of the top 1,000 richest individuals and families in the UK. As far as the USA is concerned, your $80 million would place you nowhere on any major list, except, perhaps, somewhat high in the kind of esteem I described earlier among family, friends, partners, gold-diggers, stockbrokers, bankers and estate agents. Well, I did say that $30 million- $80 million was only a start!
Of course, all measurements are arbitrary. They are just an attempt by humans to make some kind of order out of a chaotic universe. In and of themselves, they are meaningless.
Quite as valid a measurement of money as asset value or cash in the bank might be “Availability on Request” or “Lifetime Spending Totals.” If you had no money yourself, but a fairy godmother gave you exactly what you needed whenever you requested it, you would never make the Sunday Times Rich List, but you would be the richest person in the world, even if you gave everything away each night.
And as for Lifetime Spending Totals (LSTs) as a measurement, I would love to know how much various people have spent in the course of their life—including me. Sadly, I know I am never going to be able to figure it out, except for the certainty that I have spent hundreds of millions of dollars. My LST will have been eye-watering.
I also know that because nearly all old money has to be protected from any one generation’s carelessness, their family wealth— especially property—is tied up in trust funds and entailments. In effect, many of the children born into this “old money” are as poor as church mice, simply because they cannot get their hands on the loot. They would have surprisingly low LSTs. Clean fingernails and good manners, certainly; but low lifetime spending totals.
Now, enough waffling about definitions. Let’s get down to making some dough.
Let’s get rich!
PART ONE
REASONS NOT TO GET RICH
1
Pole Positions
No task is a long one but the task on which one dare not start. It becomes a nightmare.
—CHARLES BAUDELAIRE, MY HEART LAID BARE
Ladies and Gentlemen, Start Your Engines...
For a great many people, getting started on the road to wealth is the most difficult part. Or so they believe. The nuances of each individual case need not concern us, but the difficulties, as stated by virtually every wannabe I ever listened to on the subject, usually fall into one of three broad categories—often age related.
If young and relatively penniless, many will argue their lack of experience and capital (especially capital!) dooms them to decades of wage slavery.
If slightly better off and on the way up with a halfway decent job and perhaps the probability of further advancement, the problem is often considered to be the loss of what they have already achieved. Plus the lack of capital.
By the time one is a senior manager or professional, probably with a decent house, a mortgage and children, it is the risk to the security and happiness of the latter (and maybe to a spouse), plus the usual lack of capital, which are most often cited as insuperable difficulties to taking the plunge.
All such objections to becoming rich are spurious, no matter how sincerely held. But before dealing with each in turn, let me digress for a moment regarding upbringing, race, color, educational qualifications and gender.
I am doing so here because I do not wish to waste anybody’s time. We will be touching on some of the circumstances described above shortly, but, in a nutshell, my experience has been that money is color-blind, race-blind, sex-blind, degree-blind and couldn’t care less who brought you up or in what circumstances.
Money is one of the most neutral substances on earth. Others may conspire against you obtaining it through bigotry or prejudice. But they can only succeed if you permit them to.
The object of your goal, in and of itself, is non-sentient. If you truly believe that your race, sex or upbringing can keep you from becoming rich, then you had best give up here. Either return this book to the shelf or, if you have already bought it, return it to the bookstore for a refund or give it to a friend. You may obtain the refund or please your friend.
But you will never get rich.
Young, Penniless and Inexperienced?
Excellent. You stand by far the best chance of becoming as rich as you please. You have an advantage that neither education nor upbringing, nor even money, can buy—you have almost nothing. And therefore you have almost nothing to lose.
Yes, yes, I know you’ve heard all that before. But consider for a moment: nearly all the great fortunes acquired by entrepreneurs arose because they had nothing to lose. Nobody had bothered to tell them that such and such a thing could not be done or would be likely to fail. Or if they had been told, then they weren’t listening. They were too busy proving those around them wrong—without even meaning to.
Not knowing that something cannot be done, you are likely to waltz into uncharted minefields where angels before you have feared to dance. Astonishingly, you may be fortunate enough to succeed, to some degree or another. Conventional wisdom will then be revised by those around you and the next generation will be taught that what you did can always or often be done—only to discover, when they attempt it themselves, that in reality you missed every land mine by pure, dumb luck.
Never trust the vast mountain of conventional wisdom. It contains great nuggets of wisdom, it is true. But they lie alongside rivers of fool’s gold. Conventional wisdom daunts initiative and offers far too many convenient reasons for inaction, especially for those with a great deal to lose. Fortunately for you, you do not have anything to lose and can afford to ignore the “jobsworths” and Jeremiahs who have lived upon the mountain for so long that they have come to worship it.
Nor is a propensity for risk-taking your only advantage. You have stamina far, far beyond those who are twenty or thirty years older— the stamina necessary for long, grinding hours of labor in the cause of getting rich. Stamina enough to party all night and go straight back to work for a twelve- or sixteen-hour day. I remember such stamina fondly.
You have no idea how much the stamina of the young is envied by the rest of us. Along with a degree of callousness and enviable powers of speedy recuperation from reverses, stamina is your secret weapon. Its attributes will see you through a raft of catastrophes that would virtually annihilate older men and women.
In addition, your instinctive knowledge of modern technology gives you another edge. (All those hours spent playing computer or video games might not have been such a waste after all.) At least you know the difference between an iPod and a JPEG. And knowledge is power, at whatever age, whether earned by blood and tears or imbibed at a mother’s breast.
Treasure that instinctive knowledge. I still own half of the personal computing magazines in Britain—PC Pro, Computer Shopper, Computer Buyer, MacUser, Custom PC —in part because of an early addiction to pinball and electronic arcade games. While I knew nothing of computing (and still do not), the instincts honed by countless hours of shoving money into slots forewarned me of their potential. The first few million pounds I ever trousered were a direct result of trusting instincts entirely at odds with conventional wisdom of any sort.
Two immediate examples leap to mind. As we will see in more detail later, I published a series of eight-page full-color, folded posters (with headlines and articles printed on the back) and charged the same cover price as magazines with ten times that number of pages. The result was dubbed a “poster-magazine” and sold millions of copies around the world. Nobody had told me it couldn’t be done because nobody had done it before.
Similarly, as previously noted, I launched half a dozen magazines about a new fad called “personal computing” back in the 1980s, even though British magazine retailers and wholesalers at the time were unanimous in their belief that “nobody will ever buy them.” Those magazines have earned me tens of millions of pounds in the last twenty-five years and are still earning me money today. Conventional wisdom is usually right. But when it is wrong, it can offer quite extraordinary opportunities for those too stubborn or inexperienced to pay attention to well-meaning naysayers.
Perhaps most important of all, as a young and penniless and inexperienced person, you are not an “expert.” Thus you are more willing to learn than those in their thirties, forties or fifties. You are not afraid of making mistakes, admitting them when you do and getting right back on track. (Speaking of tracks, you have no track record to defend, either.)
Here is a pearl beyond price and—Glory Hallelujah!—it cost you nothing to obtain. Anyone not busy learning is busy dying. For as long as you foster a willingness to learn, you will ward off sclerosis of the brain and hardening of the mental arteries. Curiosity has led many a man and women into the valley of serious wealth.
Ambition, fearlessness, self-belief, stamina, a degree of callousness, a willingness to learn. These are your advantages over the middle-aged and the old. “Gather ye rosebuds while ye may!” Could you turn the clock back for me by forty years, I would willingly swap you every penny and every possession I own in return. And I would have the better of the bargain, too!
So what does the future hold for a young man or woman determined to become far wealthier than their parents? Here is how I see it:
The way will most likely be hard, your failures many. It will be fun and it will get a little hairy, even scary, at times. But the earlier you start and the more risks you are prepared to run, tempered by listening hard and choosing the right mountain (we’ll come to that later), the more certain it is that, sooner or later, you will find yourself with a small success on your hands.
And one success, with luck, will lead to another.
If there is a single category of person for whom this book should prove the most useful, it is you: the young, penniless and inexperienced. I know. I’ve been there.
And if I was lucky enough to find a way through, then so can you.
Stick with me, young brother or sister. You are suffering from nothing more than excusable confusion and a lack of experience, conditions that will pass with time, and whose passing can be expedited by fierce determination and application.
Believe it or not, I envy each and every one of you.
Slightly Better Off and On the Way Up?
This is the point at which many people vaguely wonder about starting their own business, either on their own or with a partner or two. They have enough experience to know how the companies they work for function. Perhaps even how their industry functions. And they see a niche—as yet imperfectly filled. They have “an idea.” (See Chapter 5: The Fallacy of the Great Idea.)
Yet they hesitate. They fear losing what they have already achieved more than they desire to enrich themselves. Personally, I am on more than familiar terms with this syndrome. I meet it every day, because it affects (or afflicts) a great many of the fine men and women who run my own companies. Perhaps even a majority of them.
I employ a great many people smarter than I am. That’s not false modesty, that’s a stone-cold fact. The only two reasons such geniuses continue to work for me and put money into my pocket are that, on the positive side, they enjoy their work, and on the negative side, they fear losing what they have already gained—challenging work, congenial colleagues, a certain status and the promise of promotion and pay raises.
They know this as well as I do. (They are far from fools, otherwise I would hardly employ them.) But fear holds them back, with the exception of those rare individuals who are content with their lot.
And what is fear? “Fear is the little death, death by a thousand cuts,” goes the ancient Japanese saying. Nifty, but ultimately unhelpful. Similar to Shakespeare’s “Cowards die many times before their deaths: / The valiant never taste of death but once.”
But is fear really the father of cowardice? Let’s leave that to the philosophers. In business, in the accumulation of wealth, it is an impediment, for sure. But then, so is recklessness. No, I believe that it is the fear of failure which looms largest here. And fear of failure is definitely something that can be dealt with, and will be dealt with at length in this book. (See Chapter 3: Harnessing the Fear of Failure.)
Outsiders are sometimes surprised at my reaction when people in this category, the Slightly Better Off and On the Way Up, decide to leave one of my own companies and set up on their own. I always wish them well. Not only outwardly, but in my heart, too. Often I throw a party for them. Or write glowing testimonials. Once or twice I have even underwritten their office lease or introduced them to a banker or a lawyer I trust. Why do I react that way?
Three reasons. Firstly, I’m proud of them. Proud that those who work for me are brave enough, motivated enough and trained sufficiently well to go for it on their own. Boldness attracts applause, as the writer and philosopher Goethe once remarked in doggerel:
Whatever you can do, or dream you can, begin it!
Boldness has genius, power and magic in it.
Secondly, it’s win-win. If they fail, they may well return to our company, especially if they remember that my senior colleagues and I sincerely wished them success in their new venture. Thus, if they fail, the company will be enhanced by their return. While if they should succeed—then we will be all richer for having an old alumnus as a friendly rival in the industry, rather than having created an enemy who wishes us anything but well.
Lastly, it’s because I fear them. I fear they may have spotted something we have missed, some gap in the market. I fear we may have failed to listen to them. I fear that their new venture will grow at our expense while it poaches our personnel and our market share. And the only way to deal with fear is to cozy up to it. To look it in the eye and pump its hand. To translate its negative energy into adrenaline. To harness it. To laugh with it, rather than at it.
Perhaps this could be you giving your current boss the scare of his or her life? At the very least, providing your idea or venture has serious merit, any sensible company would attempt to buy you off. If they do not, then perhaps they are not a company that deserves to benefit from your talents? It’s a thought, isn’t it?
As one who has been “the boss” for longer than many of you have been alive, I can assure you that you enjoy much greater leverage than you might believe. But you will never find that out until you go for it.
For the Slightly Better Off and On the Way Up, now is the time to consider whether or not you intend to continue making me (and people like me) even richer, or whether you wish to become rich yourself. You have little time left in which to make up your mind. Your youth and stamina are ebbing away. You are getting too comfortable.
It is not a course for everyone. But I think you can guess what my advice to you would be.
What the hell. Go for it!
Senior Manager or Professional?
Welcome! I’m surprised you could bring yourself to read such a book. It’s a good sign. It shows you’re still curious. Still hungry. Not as hungry as the penniless lad or lass at the beginning of this chapter, of course. But then youth is wasted on the young—and they have so much learning to do, do they not?
You, on the other hand, have learned much. There is little about your company you do not understand. Little, too, about your industry that has escaped you. You have seen a great many fools take the plunge into freelance work or set up in business on their own with such high hopes. And watched nearly all of them come crashing down in flames or creep through the bankruptcy courts hoping nobody would notice.
But I bet you noticed. I’d bet my bottom dollar that you noticed.
Still, there have been one or two who made it, haven’t there? One who even suggested you take the plunge with her and take a piece of the action? Was that the one you turned down? The woman who waves when she passes you in her Mercedes-Benz SLR convertible on her way to a golf club you cannot afford to join? From a house on the water with its own dock, apparently. The one who is now far richer than she deserves to be? The one who got lucky? Let’s face it, you were, and are, smarter than she is. Or ever will be.
Annoying, isn’t it?
But you don’t have to give up hope. With luck you’ll make the board in four or five years, if you haven’t already. So much easier to strike out on your own from such a position, rather than acting precipitately, non? The banks will listen more closely to a board director, after all.
And it’s true you have responsibilities. The mortgage has some years to go, although the house increases in value every year. The kids aren’t through college yet, but they soon will be. It’s just a question of waiting. Of recognizing “the realities of the present tempered by the necessities of the past and the possibilities of the future,” as the author R. G. Collingwood put it. But then, he was writing about history.
If you detect a trace of cynicism in the above description, then you are correct to do so. And for a simple reason. In nearly forty years of doing business, I know of only six senior managers or professionals between forty and fifty who struck out on their own. And two of those were lawyers.
One did very well indeed with his own law firm. Two of them did fairly well. One went belly up and never recovered financially. One threw in the towel and owns a tiny bar on an island in Croatia. (I suspect he is the happiest of the lot.) The remaining one shot himself when his venture collapsed. None of them became really rich.
Yet you picked up this book. You’re still curious. You’re still hungry. Read on, my learned friend. How to Get Rich may subvert you yet, though I very much doubt it.
