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How to Get Rich by Felix Dennis

How to Get Rich by Felix Dennis

by Parker · 460 things on Twos

Intro
Good fortune? The fact is The more that you practise, The harder you sweat, The luckier you get.
Ideas? We've had'em Since Eve deceived Adam, But take it from me Execution's the key.
The money? Just pester A likely Investor. To get what you need You toady to greed.
The talent? Go sign it. But first, wine and dine it. It's tedious work With a talented jerk.
Good timing? To win it You gotta be in it. Just never be late To quit or cut bait.
Expansion? It's vanity! Profit is sanity. Overhead begs To walk on two legs.
The first step? Just do it And bluff your way through it. Remember to duck! God speed ... and Good Luck!
Preface - Can this book really make me rich?
Money is power. Power is an aphrodisiac. It even says so in the Bible: 'Wine maketh merry: but money answereth all things' (Ec. 9:10). Money did not make me happy. But it quite definitely improved my sex life.
Knowledge learned the hard way combined with the avoidance of error, whenever and wherever possible, is the soundest basis for success in any endeavor.
You can get it if you really want but only if you really do want. And only if 'you try ... try and try ... and try again ...
If it flies, floats or fornicates, always rent it - it's cheaper in the long run.
Whatever qualities the rich may have, they can be acquired by anyone with the tenacity to become rich. The key, I think, is confidence. Confidence and an unshakeable belief it can be done and that you are the one to do it.
Tunnel vision helps. Being a bit of a shit helps. A thick skin helps. Stamina is crucial, as is a capacity to work so hard that your best friends mock you, your lovers despair and the rest of your acquaintances watch furtively from the sidelines, half in awe and half in contempt. Luck helps - but only if you don't seek it.
The vast majority of the self-made rich worked, secretly or openly, like billy-o to acquire their wealth.
The follow-through, the execution, is a thousand times more important than a 'great idea'.
If you think that it can't be done and dwell on that thought too long, then you are likely to remain poor.
Time is the most precious thing in life that riches can supply. To make the money to do what the hell you want.
Introduction - How rich?
The richer you are and the more financial advisors you employ, the less likelihood there is that you can ever discover what you are really worth.
'If you can actually count your money, you are not really a rich man.' - John Paul Getty
Riches do not confer happiness!
Part one - Reasons not to get rich
Chapter 1 - Pole positions
“No task is a long one but the task on which one dare not start. It becomes a nightmare.” - Charles Baudelaire
Money is colour-blind, race-blind, sex-blind, degree-blind and couldn't care less who brought you up or in what circumstances.
Anyone not busy learning is busy dying.
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.
They fear losing what they have already gained - challenging work, congenial colleagues, a certain status and the promise of promotion and pay rises. Fear holds them back, with the exception of those rare individuals who are content with their lot.
“Whatever you can do, or dream you can, begin it! Boldness has genius, power and magic in it.” - Goethe
You enjoy much greater leverage than you might believe. But you will never find that out until you go for it.
My earnest advice is to get yourself a young and fearless partner with tons of stamina. Choose him or her with care. It's your best chance to get rich.
Chapter 2 - A million to one
People in poor health usually find it difficult, no matter how clever they are, to muster the stamina that becoming rich demands.
If I had my time again, knowing what I know today, I would dedicate myself to making just enough to live comfortably (say £30 or £40 million), as quickly as I could - hopefully by the time I was thirty-five years old. I would then cash out immediately and retire to write poetry and plant trees.
It's no excuse, but making money is a drug. Not the money itself. The making of the money.
Whoever dies with the most toys doesn't win. Real winners are people who know their limits and respect them.
Part two - Getting started
Chapter 3 - Harnessing the fear of failure
Knowing that fear of failure is holding you back is a step in the right direction. But it isn't enough, because knowing isn't doing.
If you wish to be rich, you must grow a carapace. A mental armour. Not so thick as to blind you to well-constructed criticism and advice, especially from those you trust. Nor so thick as to cut you off from friends and family. But thick enough to shrug off the inevitable sniggering and malicious mockery that will follow your inevitable failures. Not to mention the poorly hidden envy that will accompany your eventual success. Few things in life are certain except death and being taxed. But sniggering and mockery prior to any attempt to better yourself financially, followed by envy later, or gloating during your initial failures - these are three certainties in life.
The Germans have a superb word for the (secret) pleasure humans obtain from the misfortunes of others. It is Schadenfreude.
The truth is that getting rich means sacrifice. And the worst of it is, it isn't always you that's doing the sacrificing.
Fear of failing in the eyes of the world is the single biggest impediment to amassing wealth.
Chapter 4 - The search
We do get to choose, if we are determined enough, what it is we want to do for a living.
If you feel absolutely moved towards a particular vocation, then that's exactly where you should head. But be aware that if you want to make huge sums of money, then earning a living by slowly swarming up the greasy pole is rarely the way to do it.
You should have no long-term, or even medium-term, requirements of the first two or three companies you work for. Promotion is always welcome and brings with it the opportunity to learn more, but you are there to ensure that you take every opportunity to suck out the marrow of what you need to know, to understand it and place it within a greater context for a future purpose. The purpose of getting rich.
Those who can never be rich may not want you to become rich.
Few inventors or 'creative types' make very good managers or businessmen.
Ownership is power.
Your inclinations really do count. You have to pay attention to them.
“Luck is preparation multiplied by opportunity.” - Seneca
“The harder I practised, the luckier I got.” - Gary Player
“Luck is a dividend of sweat.” - Ray Kroc
Fortune favours not just the brave but the bold. Boldness has a kind of genius in it.
All around us, every day, opportunities to get rich are popping up. The more alert you are, the more chance you have of spotting them. The more preparation you have done, the more chance you have of succeeding. The more bold you are, the better chance you have of getting in on the ground floor and confounding the odds. The more self-belief you can muster, the more certain will be your aim and your timing. And the less you care what the neighbours think, the more likely you are to take the plunge and exploit an opportunity.
Whatever your inclinations, your aptitude, your abilities or your preferences, never shrink when opportunities arrive. If you have weighed the odds and find yourself convinced, ignore the protestations of sensible people and their conventional caution.
Chapter 5 - The fallacy of the great idea
You cannot patent an idea. You can only patent your own method for implementing an idea.
Having a great idea is simply not enough. The eventual goal is vastly more important than any idea. It is how ideas are implemented that counts in the long run.
The original is not the greatest. Not always. If you want to be rich, then watch your rivals closely and never be ashamed to emulate a winning strategy.
Ideas don't make you rich. The correct execution of ideas does.
Chapter 6 - Obtaining capital
There are only six ways of obtaining capital. You can be given or inherit it; you can steal it; you can win it; you can marry it; you can earn it; you can borrow it.
Gambling, even for those at near genius level, is time-consuming and totally exhausting.
“Suspicion always haunts the guilty mind; The thief doth fear each bush an officer.” - William Shakespeare
Venture capitalist short-termism, with its eye firmly glued to the sale of an enterprise within three or four years, is the hallmark of nearly all venture capital activity.
Should you decide to approach venture capitalists, and by some miracle should they agree to back you, then I urge you to seek the finest legal advice that your money can buy for the ensuing negotiations. Just one sentence, even a phrase, within the initial contract can make all the difference in the world to the outcome a few years down the road.
Persistence is a powerful tool in the hands of a hungry young hustler on the make.
Human nature does not change and, at bottom, we are cooperative animals.
Nothing is more humiliating or debilitating than trudging the rounds with your hand out, no matter how good your project or fierce your determination. Everyone has to do it and everyone hates it. For a self-made man or woman there is no avoiding it.
“When going through hell, keep going.” - Winston Churchill
Chapter 7 - Never give in
“Never give in! Never give in! Never, never, never, never - in nothing great or small., large or petty. Never give in, except to convictions of honour and good sense.” - Winston Churchill
If you want to be rich, then you must walk a narrow, lonely road to get the capital to make it so.
'I cannot help it that my pictures do not sell. Nevertheless, the time will come when people will see that they are worth more than the price of the paint.' - Vincent van Gogh
Why bother to punish yourself in such a way? Nobody else does it - why should you? Go on, make everyone around you happy.
Why not give in? If you are merely a wannabe, then the siren voices will prevail, and they will be right to prevail. If you are a gonnabe, then they will not prevail. Like Odysseus you will stop your ears with wax or bind yourself to the mast. You will learn to walk your narrow, lonely road - and to hell with the siren voices. You will not give in. And you will be rich.
Chapter 8 - The five most common start-up errors
Mistaking desire for compulsion
All error springs from flawed assumptions. If there are no assumptions, there can be no error.
Consider very carefully whether you are truly driven by inner demons to be rich. If you are not, then my earnest and heartfelt advice to you is: do not on any account make the attempt. What are riches anyway, compared to health or the peace of mind that even a modicum of contentment brings in its wake? In and of itself, great wealth very rarely, if ever, breeds contentment.
Do not mistake desire for compulsion. Only you can know the song of your inner demons. Only yon can know if you are willing to tread the narrow, lonely road to riches. No one else can know. No one else can tell you either to do it or to refrain from the attempt.
When the going gets tough, when all seems lost, when partners and luck desert you, when bankruptcy and failure are staring you in the face, all that can sustain you is a fierce compulsion to succeed at any price.
Better to have chosen a different life, a quite different path, than have placed yourself and those you love in harm's way when early reflection and thought could have advised you differently. I repeat: do not mistake desire for compulsion. Those that do nearly always fail, at great cost to themselves and those around them.
Overoptimism concerning cash flow
Cash flow is the heartbeat of your company. If cash flow is good, then no matter how badly run or poorly managed a company is, there is always a decent chance of turning its fortunes around.
You can delegate many tasks when creating a new business, but monitoring and forecasting cash flow is not one of them. It's your responsibility and your task. Nobody else's.
Keep payroll down to an absolute minimum. Overhead walks on two legs.
Never sign long-term rent agreements or take upmarket office space.
Never indulge in fancy office or reception furniture, unless your particular business demands that you make such an impression on clients.
Never buy a business meal if the other side offers to. You can show off later.
Pay yourself just enough to eat.
Do not be shy to call customers who owe you money personally. It works.
In a city, walk everywhere you can. It's healthy and sets a good example.
Check all staff travel and entertainment claims with an eagle eye.
Always meet payroll, even at the expense of starving yourself that week.
Issuing staff credit cards, company mobile phones or cars is the road to ruin.
Leaving lights, computers, printers and copiers on overnight is just stupid.
A vase of beautiful flowers in reception every week creates a better impression than £100,000 worth of fancy Italian furniture.
They want your business. Play one supplier off against another. Ruthlessly.
Keep your chin up. It could he worse. You could be working for them.
Reinforcing failure
'There is no victory over customers.'
Thinking small and acting big
'Success is never permanent; failure is never fatal. The only thing that really counts is to never, never, never give up.' - Winston Churchill
Once you begin to believe that you are infallible, that success will automatically lead to more success, and that you have 'got it made', reality will be sure to give you a rude wake-up call.
Believing your own bullshit is always a perilous activity, but never more fatal than for the owner of a start-up venture.
By acting small, I mean remaining in touch. Remaining flexible. Constantly examining how your company could do better. Keeping a sense of proportion and humility. Not throwing your weight around playing the great 'I Am'. Remembering that much of your success so far has been achieved by dumb luck. Acting small in the early days of your business sets an example to those around you. If staff see you indulging in long lunch hours and purchasing yourself a fancy company car, then they are either going to resent it or they are going to emulate you. This is not a good thing. You can do all that stuff later, when you've made your first fifty million.
Most of the worst errors I have made in my life came from forgetting to act small. It's hard to do when you're rolling around in coin and everything is going your way. But acting big leads to complacency, and complacency is the reason that many successful start-ups falter.
Every day you have to hit the ground running, putting in more hours than even your most dedicated member of staff. You have to stay flexible. You have to be willing to listen and to learn and to emulate success elsewhere. If you don't, if you think you have already made the cut, if you're thinking 'game over: time to party', then bad stuff begins to happen very quickly.
Think big, act small. It's a recipe that never goes out of style. While especially important for start-ups, it will serve you faithfully long after you have established yourself as a serious player. A successful and naturally modest entrepreneur is an object of reverence and respect in the business world.
Skimping on talent
You need the talent to identify, hire and nurture others with talent.
'There is no substitute for talent. Industry and all the virtues are of no avail.' - Aldous Huxley
Talent is the key to sustained growth, and growth is the key to early wealth. You have to identify and hire talent. You can't skimp on it.
Talented people want a good salary, of course, but surprisingly often they are more attracted to new opportunities and challenges.
When you come across real talent, it is sometimes worth allowing them to create the structure in which they choose to labour. In nine cases out of ten, by inviting them to take responsibility and control for a new venture, you will motivate them to do great things.
Talent is usually conscious of its own value. But the currency of that value is not necessarily a million-dollar salary. The opportunity to prove themselves, and sometimes the chance to run the show on a day-to-day basis, will often do the trick just as well.
You must identify talent. Then you must move heaven and earth to hire it. You must nurture it, reward it property and protect it from being poached. If necessary, dream up a new project. Better still, get the talent to dream it up.
By the time talent is in its mid-to-late forties or early fifties, it will have become very, very expensive. Young talent can be found and underpaid for a short while, providing the work is challenging enough. Then it will be paid at the market rate. Finally, it will reach a stage where it is being paid based on past reputation alone. That is when you must part company with it.
'Everybody has talent at twenty-five. The difficult thing is to have it at fifty.' - Degas
Talent is indispensable, although it is always replaceable. Just remember the simple rules concerning talent: identify it, hire it, nurture it, reward it, protect it. And, when the time comes, fire it.
Talent does most of the work for you.
Part three - Getting rich
Chapter 9 - Cardinal virtues
Persistence
“If at first you don't succeed, try, try, try again. Then quit. No use being a damn fool about it.” - W. C. Fields
Stubbornness is not persistence. Stubbornness implies you intend to persist despite plentiful evidence that you should not. A stubborn person fears to be shown he or she is wrong. A persistent person is convinced that he or she has been right all along, and that the proof lies just around the corner. That with just a little further effort, the veil of failure will be torn away to reveal success.
'Never give in' is a useful catchphrase. But don't take it too literally. We must all surrender at some time, to love or desire or death. You will be forced into the last of these, and a fool if you never surrender to the first. But never give in easily. If you can, attempt one step further along the road than appears sensible before giving in.
So-called 'persistence' is a vital attribute for those who wish to become rich, or who wish to achieve anything worthwhile for that matter. As is the ability to acknowledge that one has made a mistake and that a new plan of action must now be made. Any such acknowledgement is not a weakness, it is a sign of clear thinking. In its way, it is a kind of persistence in itself. Try, try, try again, does not mean doing what has already failed, over and over again.
Quitting is not dishonourable. Quitting when you believe you can still succeed is. You must keep the faith. Belief in yourself and faith in your project can move mountains. But not if you insist on trying to scale the mountain by an impossible route which has already failed.
Do not be afraid to change tack, alter course or make new plans with whatever you are attempting to achieve. Especially if you sense that you are on the wrong track.
Above all, avoid banging your head against the same piece of wall. The wall will not get any softer. And don't give up - if you want to be rich.
Self-belief
“No one can make you feel inferior without your consent.” - Eleanor Roosevelt
Do you believe in yourself?
If you will not believe in yourself, then why should anyone else?
Without self-belief nothing can be accomplished. With it, nothing is impossible.
If pain was to be eliminated from humankind, how would we receive warning that something was happening to our body requiring urgent attention? In many situations, pain must be ameliorated - during surgical operations, recovery from serious injury or in the throes of dying, for instance. But to eliminate pain entirely from our lives would not be a sensible objective or in our best interests.
There is nothing wrong with doubt, or with fear. They are immensely useful tools. But you either learn to incorporate them into your thinking and your life, or you will be ruled by them. There is no 'middle way'.
It is doubt multiplied by the fear of failure, unconfronted, which leads to the creation of a vicious cycle where self-belief is eroded and nothing is achieved. Doubts can and should be confronted, as should fear.
Write down your doubts and fears. Examine them. Hold them up to the light. Suck the wisdom out of them and discard their husks in the trash.
If you have ever escaped from very serious trouble indeed, or have been at the point of death, then one of two things happens. Either you become cautious to an absurd degree, or you are liberated from many ordinary fears. With liberation comes the knowledge that nothing is really very important in the lives of men; nothing is as terrifying as the fear itself. And from that, paradoxically, comes self-belief - a belief that anything is possible.
You should remember that you are unique. No other human was ever born, or will ever be born, with the same combination of upbringing, flaws and qualities that you possess. Why should you not believe in yourself?
How then, could you not believe in yourself: Nature did. Destiny did. Or, if you wish, your God did.
If you want to be rich you must work for it. But you must believe in it, too. You must believe in yourself, if only to armour yourself against the laughter of the gods in your quest. Your mad quest to be rich.
Trust your instincts
If you want to get rich, trust your own judgement when it calls - and leave those whose job it is to manage your business to pick up the pieces.
Make more baskets: diversify!
Take any business and any idea. You need focused, tunnel vision to get it on the road and to begin making some money. You can expand it, maybe franchise it or take it to other cities or even other countries. But, in reality, it is still the same basket with a lot more eggs in it.
Either you learn to go with the flow and change as rapidly as you are able, or you will be left stranded, like the last dinosaur, by the last warm take, on the last continent the ice age has yet to teach.
During the start-up, you concentrate on that one basket as if your life (and the life of your first-born) depends upon it. But once you have something that's working and making some money, start looking around quickly for another opportunity. The more baskets the better.
Listen and learn
When you stop listening, you stop learning. And if you stop learning, it's time to get out of the kitchen and let someone else do the cooking.
Listening is the most powerful weapon after self-belief and persistence you can bring into play as an entrepreneur.
It's usually better to leave no doubt in your visitor's mind if you're not interested in their project or idea. In a way, it's kinder, as well. While the temptation is to say, 'I'll confer with my colleagues and get back to you,' this will eventually come back to haunt you and waste more of your most valuable resource. Time.
No one can copyright or patent an idea. You can only protect the execution of the idea, which must be unique.
Chapter 10 - A few words about luck
Lesson No. 1: Never make your finance director or CFO the MD or president of anything!
Lesson No. 2: Never go on vacation when a deal is going down.
Lesson No. 3: When you change accounting systems (or accountants, for that matter), have the numbers checked over and over again.
Lesson No. 4: Never personally underwrite business loans for your company unless you absolutely, positively, are forced to. Even then, set limits in the agreement so that, as the loan figure is reduced over time, you are released from your undertakings commensurately.
Lesson No. 5: Listen to people who are good with money and always invest in property with a good address - providing you can pay cash for it and will not need to sell it for a few years.
'Luck is what happens when preparation meets opportunity.' - Seneca
Luck is preparation multiplied by opportunity.
Preparation is the key. Be prepared. Do the heavy lifting and the homework in advance. Get on with the job, but remain alert enough to spot an opportunity when it arrives. Then hammer it.
If you haven't prepared yourself, the opportunity will go begging. It will be yet another regret in your life, another 'if only ...' And even if you have prepared, but are too busy, probably buried in the minutiae of management, or a messy divorce, or moving house, or a hundred and one other things, then luck will again evade you. Months or years later you will be saying, 'If only I had spotted that opportunity. I was ready for it, but I wasn't paying attention.' 'If only...' are the two saddest words in the English language.
To become rich you must behave as a predator. I will go further, you must become a predator.
Lady Luck doesn't love star-struck suitors like Albert. She wants crazy bastards who will tell her to take a hike or get lost if they feel like it. She won't come calling to anyone who needs her or needs to worship her.
'Fortune favours the brave,' says the old proverb. And that's right enough. But it seems to especially scorn anyone who wants money too badly. And it positively appears to despise men or women who fear to lose what fortune they already have.
My advice concerning luck is to laugh in the face of the Lady when she presents herself. Take what you will of her bounty and act swiftly to take advantage of good fortune. But never thank her for it. And forget her the moment she leaves to seek another victim. In modern, sexist parlance: 'Treat her mean to keep her keen.' Pimp her, don't court her. And don't go looking for her or make enquiries about her.
Prepare yourself for luck, but don't seek her out. Let her come to you.
Make your own luck.
Don't whine or ever describe yourself as 'unlucky'. (You're alive, aren't you?)
Be bold. Be brave. Don't thank your lucky stars. The stars can't hear you.
Stay the course. Stop looking for the green grass over the hill.
Don't try to do it all yourself. Delegate and teach others to delegate.
Remember that most predators are lucky most of their lives, unlike their prey.
Whiners and cowards die a hundred times a day. Be a hero to yourself.
If being a hero isn't your style, then fake it. Reality will catch up eventually.
Just do it. It is much easier to apologise than to obtain permission.
Never take the quest for wealth seriously. It's just a game, chum.
Next time you bump into Lady Luck, giver her a whack on the rump from me.
Be lucky. Get rich. Then give it all away.
Chapter 11 - The art of negotiating
'Let us never negotiate out of fear. But let us never fear to negotiate.' - John F. Kennedy
If you 'negotiate out of fear' you are not 'negotiating'. You are surrendering in all but name. As to the second half of his pronouncement, he is saying that it's always worth listening to the other side in the search for mutually beneficial agreements.
A few tips on negotiating:
Remember that few of us are any good at detailed negotiations. That includes your opponent, by the way.
If you are a poor negotiator, like me, then set a limit on what you will pay or accept and on any conditions attached. Do not deviate. Your first thought is your best thought.
Most negotiations are unnecessary. Don't enter into them. Remember that 'the fortress that parleys is already half taken'. Save serious negotiations for serious occasions.
Do your homework. And do it rigorously. What you don't know or haven't bothered to find out can kill you in any type of serious negotiation.
The devil really is in the detail in serious negotiations. Get all the professional help you can trust. But do not surrender control of the negotiations or the agenda to such professionals. They are not the ones who will have to live with the consequences - you are. Professional advisors are there to explain and advise. not to decide.
If your advisors are leading you down a path you don't approve of during your negotiations, call a 'time out' and tell them privately that if they continue down that path you will get yourself some new advisors. The world is full of them.
Never fall in love with the deal. A deal is just a deal. There will always be other deals and other opportunities.
Avoid auctions in business like the plague - unless you are selling something, that is. You will nearly always pay more than was wise if you are the 'winner' of an auction process.