In How to Get Rich tells the author – a British magazine publisher and poet – how he got rich by being an entrepreneur and provides advice on what it needs to become rich.
My impression of How to Get Rich is mixed. On the one hand I enjoyed the many personal anecdotes in the book and I hope the author will write his autobiography one day. On the other hand I didn't like the many poems the book contains.
Preface – Can this book really make me rich?
Knowledge learned the hard way combined with the avoidance of error, whenever and wherever possible, is the soundest basis for success in any endeavour.
I got rich my way. You might even say the old-fashioned way. By making errors, lots of errors, and learning from them.
The follow-through, the execution, is a thousand times more important than a "great idea".
If you want to get rich, don't sit around waiting for inspiration to strike. Just get busy getting rich.
Introduction – How rich?
Rich enough to buy the only two things apart from health and love worth fussing about in life. Time. And the option of not having to be in any particular place on any particular day doing any particular thing in order to pay the rent or the mortgage.
Becoming rich does not guarantee happiness.
Reasons not to get rich
Money is colour-blind, race-blind, sex-blind, degree-blind and couldn't care less who brought you up or in what circumstances.
Young, penniless and inexperienced? Excellent. [..] 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.
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 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.
Anyone not busy learning is busy dying.
I employ a great many people smarter than I am. [..] The only two reasons they 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 rises.
A million to one
Making money is a drug. Not the money itself. The making of the money.
If the odds of getting rich put you off, then you deserve to stay poor.
Harnessing the fear of failure
Everywhere you look, you will find men and women who appear to take perverse pleasure in pointing out the shriekingly obvious: that if a new venture does not succeed, it may result in failure.
There is nothing wrong with robust debate, either with others or with oneself. What is undesirable, however, is the pretence that any such debate can resolve the risks involved in advance. It cannot. All debate can do is clarify, support or contest the next step. The risks remain, however much talking is done.
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.
If you are unwilling to fail, sometimes publicly, and even catastrophically, you stand very little chance of ever getting rich.
If you care what the neighbours think, you will never get rich.
If you cannot bear the thought of causing worry to your family, spouse or lover while you plough a lonely, dangerous road rather than taking the safe option of a regular job, you will never get rich.
If you have artistic inclinations and fear that the search for wealth will coarsen such talents or degrade them, you will never get rich.
If you are not prepared to work longer hours than almost anyone you know, despite the jibes of colleagues and friends, you are unlikely to get rich.
If you cannot convince yourself that you are "good enough" to be rich, you will never get rich.
If you cannot treat your quest to get rich as a game, you will never be rich.
If you cannot face up to your fear of failure, you will never be rich.
Getting rich means sacrifice.
We do get to choose, if we are determined enough, what it is we want to do for a living.
Choices are confusing. They take time to consider, to sample, spit out and reject. And too many of them provide a ready-made excuse for procrastination and shilly-shallying.
Working too long for other people can blunt your desire to take risks.
If you want to be rich and you are in the search phase of your life, then get used to one thing. You are not part of a team – although you may have to pretend you are.
Working for others is a reconnaissance expedition; a means and not an end in itself. It is an apprenticeship and not a goal.
Those who can never be rich may not want you to become rich. It's the same with close friends and family members. Consciously and outwardly they may want you to succeed beyond your wildest dreams. But subconsciously, often without being aware of it themselves, they might be far happier if you failed or only succeeded to a limited degree.
As a general rule of thumb, growing industries with relatively low start-up costs offer more opportunities for those who want to get rich than declining industries, or those that require huge start-up investment.
The biggest rewards go not to those individuals who came up with the idea, nor to those individuals who built the empire. They go to those entities or individuals who funded the enterprise and own the most stock.
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.
Whatever your inclinations, your aptitude, your abilities or your preferences, never shrink when opportunities arrive.
The fallacy of the great 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.
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.
Never give in
There is absolutely nothing more likely to dampen the prospects of becoming rich than a nice, fat, regular salary cheque.
The five most common start-up errors
The first error: mistaking desire for compulsion.
All error springs from flawed assumptions. If there are no assumptions, there can be no error.
'Assumption is the mother of all f***-ups'
Wishing for or desiring something is futile without an inner compulsion to achieve it.
The second error: overoptimism concerning cash flow.
It is control and ownership of a business entity which brings with it the promise of future wealth. Lose control of a business by running out of cash and you are relegated to the status of minority investor or salaried employee.
All new ventures (and established ones, too) require positive cash flow if they are to grow and to succeed.
You can improve cash flow by observing the following suggestions in a start-up's early days:
- 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.
- If you're going to be late paying, call the vendor's boss. Give a date. Stick to it.
- 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 $100000 worth of fancy Italian furniture.
- They want your business. Play one supplier off against another. Ruthlessly.
- Keep your chin up. It could be worse. You could be working for them.
You must plan for the worst and hope for the best in all matters relating to the cash flowing in and out of your start-up company.
The third error: reinforcing failure
Reinforcing failure sounds so easy to avoid. If something fails, stop doing it and start doing something else, right? Er, right. Except, just when do you decide that you have a "failure" on your hands? Too late, is the answer – always too late.
The fourth error: thinking small and acting big
Just because you have a success or two under your belt doesn't mean you have it made.
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.
By acting small, I mean remaining in touch. Remaining flexible. Constantly examining how your company could do better.
Think big, act small.
The fifth error: skimping on talent
If you are determined to be rich, there is only one talent you require. You need the talent to identify, hire and nurture others with talent.
When you come across real talent, it is sometimes worth allowing them to create the structure in which they choose to labour.
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.
What talent seeks is the chance to prove itself and the opportunity to excel.
Remember the simple rules concerning talent: identify it, hire it, nurture it, reward it, protect it.
Quitting is not dishonourable. Quitting when you believe you can still succeed is.
Do not be afraid to change track, alter course or make new plans with whatever you are attempting to achieve. Especially if you sense that you are on the wrong track.
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.
Doubt is a warning system and plays its part in reaching decisions.
If you want to be rich you must work for it. But you must believe in it, too.
As you will discover when you start your own business, it's difficult and scary facing up to swiftly changing realities on the ground. Most of us would prefer that things stayed the same so that we can carry on making money in ways we have grown comfortable with. But things do not stay the same. Either you learn to go with the flow and change as rapidly as you are able, or you will be left stranded.
Once you have something that's working and making some money, start looking around quickly for another opportunity. The more baskets the better.
There's little I like better than my own company.
When you stop listening, you stop learning.
A few words about luck
Listen to people who are good with money.
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.
"If only..." are the two saddest words in the English language.
The only truth about luck, good or bad, is that it will change.
Don't whine or ever describe yourself as "unlucky".
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.
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.
The art of negotiating
It's always worth listening to the other side in the search for mutually beneficial agreements.
Most of us are rather poor negotiators.
Most negotiations are unnecessary.
"The other side" is often just as smart (or stupid) as you are.
If you are a poor negotiator, 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.
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.
Listen when engaged in serious negotiations. Then listen some more. You are in no hurry. Nobody ever got poor listening. Also, use silence as a weapon. Silences are disconcerting. People tend to fill silences with jabber, often weakening their bargaining position as they do so.
Whatever you agree to during a negotiation, fulfil the bargain.
Ownership! Ownership! Ownership!
It is worth remembering that ownership of any kind is nonsensical. It is absurd and defies reason because we are all mortal and we cannot take it with us.
Being rich is fine, and at the very least is better than being poor. But it shouldn't be the be-all and end-all of your life.
To become rich you must be an owner. And you must try to own it all. You must strive with every fibre of your being, while recognising the idiocy of your behaviour, to own and retain control of as near to 100 per cent of any company as you can.
Never, never, never, never hand over a single share of anything you have acquired or created if you can help it.
Nothing counts but what you own in the race to get rich.
My earnest advice is that you establish yourself first, retaining as much control of any start-up or acquisition as you can, and then, and only then, seek pastures new with partners in the picture.
Ownership buys you the luxury of time. Ownership means never having to waste time saying sorry that a business didn't work out. It means not having to spend weeks and weeks trying to persuade your partners that a certain course of action is necessary.
The joys of delegation
The exercise of delegation, used responsibly, allows you to bring out the best in others and to make yourself rich in the process.
If you own a company and that company's purpose is to make you wealthy, you will be content, delighted even, for any amount of glory to go to anyone who works there, providing you get the money. It is in your best interests to delegate whenever it makes sense in such circumstances.
I have been constantly surprised all my business life at who faces up to challenges best. It is very often not those who talk the best talk.
If you want to get rich, then learn to delegate. Don't learn to pretend to delegate. Delegation is not only a powerful tool, it is the only way to maximise and truly incentive your most precious asset – the people who work for you.
A piece of the pie
Any fool can cut costs anywhere at any time. For one shining moment it will look as if he or she is a genius at increasing the bottom line. Then the moment will pass and quality will collapse.
Revenues versus costs is important, but the latter should not be cut merely to meet management bonus targets.
Love of any work, diligently undertaken, no matter what it is, brings contentment and, eventually, respect.
Never bad-mouth rivals. It's a sign of stupidity and weakness.
The power of focus
If you have entrepreneurial flair, then you can go into just about any business and make money.
Keep your eye on the ball if you wish to get rich. And do not forget which ball.
There is no substitute for good timing.
You cannot get rich all on your own. No one can. You have to create, or work within, the right environment.
Never choose an important employee or a key supplier alone. Get others to interview them or talk to them as well. We are all far too fond of choosing those we instinctively like, those we respect or believe are similar to ourselves. This is not a good thing. You need the input of others to choose the right candidate.
Whatever it is you intend to do to get rich, get good at it. Hire people who are better than you at it. Listen and learn and get better still at it.
Focus on your business, whatever it is. It represents what you are. It should be a source of pride as well as a source of money. Being the best, or at least striving to be, will speed up the process of getting rich.
Focusing on doing an outstanding job is an important part of getting rich.
Troubleshooting & endgame
The more honest you are about your misfortune with those affected by it, the easier the comeback will be. But the more you weasel and fib or tell outright lies or somebody else, the less likely it is that anyone will want to do business with you again.
If you want to stay rich, then pay your taxes and don't milk the cow without reporting it.
A recap for idlers
Money is never owned. It is only in your custody for a while.
The only people the self-made rich can trust are those who knew them before they became wealthy.
You must cut yourself loose from naysayers and negative influences. They will tell you, if you listen, about the impossibility of trying to make yourself wealthy. In doing so, they drain confidence and optimism from you.
You have to choose a new mine where you suspect there is money, or an old mine with a different angle to get rich.
You must avoid the trap of going into what you think will make you money if you have no empathy or feeling for what you are about to do. There's no future in that.
Don't do anything because you feel you have to. Go for what attracts you. Go for something that exploits your natural talents.
What can there be for us to fear, when each of us knows we shall die eventually?
If you do not start today, then when will you start? You will never start unless you start NOW!
The only three valid reasons for not attempting to become rich are: "I do not wish to be rich." or "I wish to be rich but I have other priorities." or "I am too stupid to try to get rich."
How to stay rich
The faster you give it away, the more money will flow back to you. Not because of "karma" or "universal cosmic forces", but because you then spend less time defending it and more time making more of it.
If you loan money to a friend, you will lose your friend as well as your money. Ditto with relatives.
Being rich doesn't give you the right to abuse anyone.
Making money doesn't mean you are smart.
The eight secrets to getting rich
- Analyse your need. Desire is insufficient. Compulsion is mandatory.
- Cut loose from negative influences. Never give in. Stay the course.
- Ignore "great ideas". Concentrate on great execution.
- Focus. Keep your eye on the ball marked "The money is here".
- Hire talent smarter than you. Delegate. Share the annual pie.
- Ownership is the real "secret". Hold on to every percentage point you can.
- Sell before you need to, or when bored. Empty your mind when negotiating.
- Fear nothing and no one.
Remember to duck!
There are far more important things in life than money.