How To Get Rich - By Felix Dennis

ISBN: 
1591842719
Date read: 
May 29, 2017
Rating: 
7
/10
See My Collection of 100+ Book Notes

My Thoughts

Honest thoughts on what it takes to become filthy rich. Fantastic writing and to-the-point advice. Reading this won't make you rich but it just might help set your mind straight if you want to be rich.

Summary Notes

My experience has been that money is colour-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. If you truly believe that your race, sex or upbringing can keep you from becoming rich, then you had best give up here.

Never trust the vast mountain of conventional wisdom. It contains great nuggets of wisdom. But they lie alongside rivers of fool's gold.

The advantages of being young:

  • Stamina
  • Ambition
  • Optimism
  • Self-belief
  • Tech-savvy
  • Fearlessness
  • No obligations
  • A willingness to learn.
  • A degree of callousness
  • Freedom to move around These are your advantages over the middle-aged and the old

If I had my time again, 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.

If the odds of getting rich put you off, then you deserve to stay poor.

'Once begun - the job's half done.' Because taking that first, irrevocable step has proved to be the most difficult part of nearly every venture I have been involved in.

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.

“A committee is a group of the unwilling, chosen from the unfit to do the unnecessary.” Prompt decisions and orders, right or wrong, are far healthier than endless debate and prevarication.

You must grow a carapace. 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. Thick enough to shrug off the inevitable sniggering and mockery that will follow your inevitable failures.

How to know you'll never get rich

  • 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. (Because your fear, in this instance, is well justified.)
  • If you are not prepared to work longer hours than almost anyone you know, 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

Working for others is a reconnaissance expedition; a means and not an end in itself. It is an apprenticeship and not a goal.

Whoever controls a business can force its sale. Whoever controls a business can implement a merger. Whoever controls a business can fire you. Whoever controls a business, even by a pitiful 1 per cent, is likely to take a great deal more money out of it than the minority shareholders

The more bold you are, the better chance you have of getting in on the ground floor and confounding the odds.

Seize Lady Luck by the forelock and hang on for your life. More men and women have become rich by this single tactic than all 'the best-laid plans of mice and men' guided by plodding strategy

It is not true that there is a large sign on Steve Jobs' desk at Apple which reads, 'My Way or the Highway' - but the fact that so many people believe there is such a sign tells its own story

“If a man write a better book, preach a belter sermon, or make a better mouse-trap than his neighbour, tho' he build his house in the woods, the world will make a beaten path to his door.” (Notice the words “Write”¸ “Preach”, and “Make”, they never once mention ‘think up’ or ‘dream up’ or ‘conceive’)

If you never have a single great idea in your life, but become skilled in executing the great ideas of others, you can succeed beyond your wildest dreams.

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. Only the last two are applicable for us.

Venture capitalists will do anything to protect and maximize short-term returns. They aren't so much sharks as dolphins - a nickname deriving from their frantic desire to 'flip' every deal as quickly as possible. Venture capital money, dolphin money, is not for the faint-hearted. Too often, it is only for the desperate - unless building a business for a quick(ish) return and a small piece of the action is your goal.

Vincent van Gogh never truly gave in. It shamed him deeply to ask his brother for the most basic of painting supplies, which neither of them could truly afford. But he would not give in. He would die first. He would kill himself first. And that's what he did. To our eternal shame, he did just that. And he died having written: '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.'

It is my hope that this book will cause you to 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.

Never yet have I met a self-made rich man or woman whose family or personal relationships were not plagued by the burden of creating a fortune, even a small fortune. A rocky marriage; lack of time spent with their children; the substitution of expensive gifts to repress guilt created by their frequent absences from home; the concern that their children have grown used to privilege and are consequently slacking in their education or lacking in ambition - all of these come as part and parcel of self-made wealth.

Lose control of a business by running out of cash and you are relegated to the status of minority investor or salaried employee. Once you lose control of a business, then no bank, white knight, investor or new owner is likely to permit you to gain control again.

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.

How to improve cash flow

  • 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 £100,000 worth of fancy Italian furniture.
  • Get used to grovelling. Grovelling is an effective tool in a start-up's cash flow.
  • 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.

We know that success has a thousand fathers while failure is famously always an orphan. Not to mention a bastard.

Believing your own bullshit is always a perilous activity, but never more fatal than for the owner of a start-up venture.

Most of the worst errors I have made in my life came from forgetting to act small.

A successful and naturally modest entrepreneur is an object of reverence and respect in the business world.

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. Talent is the key to sustained growth, and growth is the key to early wealth.

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. What talent seeks, as often as not, is the chance to prove itself and the opportunity to excel.

After all, who built the pyramids? The pharaohs or the engineers?

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.

Trust your instincts. Do not be a slave to them, but when your instincts are screaming, Go! Go! Go! then it's time for you to decide whether you really want to be rich or not.

Eggs being what they are and the world being what it is, they will sometimes break.

Build more baskets just as quickly as you can: Richard Branson with Virgin. Some are not as strong as others, but that's not the point. Western capitalism will have to sink into an ocean of darkness before all of Richard's Virgin businesses go broke. Richard has perfected one cardinal rule: he owns or part-owns more baskets than almost anyone alive. It's certainly one way to become a billionaire

It becomes your 'baby', if you're not careful. This is dangerous and counter-productive. You are not in the egg-laying and basket-weaving or baby business. You are in the business of getting rich.

If you have experience, a little investment cash and will make the time, then the world will bring to your door an amazing collection of visionaries, con artists, madmen and budding entrepreneurs.

  • 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. I'll eat my hat if errors are not discovered in the next iteration.
  • Lesson No. 4: Never personally underwrite business loans for your company unless you absolutely, positively, are forced to.
  • Lesson No. 5: Listen to people who are good with money and always invest in property with a good address.

"If only…" are the two saddest words in the English language.

Uncontested markets are usually uncontested for a reason. Nature abhors a vacuum and if no one else is contesting a market, it may well be that no such market exists. Very few visionaries get rich, begging the lads at Google's pardon.

  • 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 apologize than to obtain permission.
  • Never take the quest for wealth seriously. It's just a game, chum.
  • Next time you bump into Lady Luck, give her a whack on the rump from me.
  • Be lucky. Get rich. Then give it all away.
  • Don't call your son 'Albert'.

The fortress that parlays is already half taken” – Russian Proverb

Negotiation

  • Most of us are rather poor negotiators.
  • Most negotiations are unnecessary.
  • The other side is often just as smart (or stupid) as you are.
  • In the end, 'the balance of weakness' almost always decides the issue.
  • In Greed vs. Need, the former usually 'wins'.
  • Remember that few of us are any good at detailed negotiations. That includes your opponent.
  • 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. 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
  • 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.
  • The negotiator opposite you is not your new best friend.
  • Take no notice of management manuals that tell you to leave passion and emotion out of the negotiating room. If you are emotional or passionate about something, then let it show
  • 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.
  • Choose a rogue element to your advantage and bring it into the negotiation at a late stage.
  • The British created the largest geophysical empire in the world with one tactic: divide and rule. It always works. It never fails if you can get to exploit it. Get to know the other side. There may be slight differences in the individual approaches of their senior managers and, possibly, in their goals. Drive a wedge and keep hammering.
  • Permit no such weaknesses in your own camp, I have often banned senior executives from taking part in negotiations simply to avoid this trap
  • Everyone thinks they are a great negotiator, but most of us simply are not
  • If you suspect you perform badly on such occasions, do not attend, even if you are the 100 per cent owner
  • Above all, establish where the balance of weakness lies in any serious negotiation. Most strengths are self-evident, especially strengths like cash and infrastructure. Weaknesses are usually hidden.
  • Whatever you agree to during a negotiation, fulfil the bargain. Nobody wants to do business with a weasel or a chisler.

If you can laugh in the midst of early poverty and in the face of real adversity, and if you can still laugh when you're coining it in, then you will almost certainly continue to coin it in.

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 recognizing the idiocy of your behavior, to own and retain control of as near to 100 per cent of any company as you can. If that is not possible, in a public company, for example, then you must be prepared to make yourself hated by those around you who are also trying to be rich.

To become rich, every single percentage point of anything you own is crucial. It is worth fighting for, tooth and claw.

If your company is young and a bit rickety, meritocracy, delegation and promotion are the bricks and mortar that will make it stronger.

The work undertaken by your colleagues and employees is more important than your work. Your job is merely to lead, perhaps just to point in the right direction.

Take unscheduled absences to stress-test the business; to ensure that life will go on without your immediate, direct input. Your presence should act as a multiplication factor, not a 24/7-present influence

Hard work never bothers the young. They think they are built of steel. But you don't have to go about starting up a business like that.

If you go on holiday or a business trip and keep obsessively in touch via a mobile phone or Blackberry with the office, what does that say about your management style? About the trust you have in your colleagues 'minding the ranch'

But when it comes to a sale, when you cash in your asset for big bucks, then I dispute the necessity (or even the fairness, not that life is fair) of handing over substantial chunks of the big bucks to people who did not risk their cash or livelihoods to create the business.

If you wish to become rich, look carefully about you at the prevailing industries where wealth appears to be gravitating. THEN GO TO WHERE THE MONEY IS!

You cannot get rich all on your own. No one can. You have to create, or work within, the right environment. By focusing hard on obtaining that human capital you will vastly increase your chances of becoming rich

Tips for choosing human capital

  • Never choose an important employee or a key supplier alone.
  • Go further than reading a person's references.
  • Make notes. Speak little.
  • Good suppliers respect attention to detail
  • Pay employees well. Bonus better.
  • Be alert for 'cross overs'
  • Only hire winners
  • Ignore your prejudices, likes and dislikes.
  • Promote from within when you can.
  • Don't leave senior employees in any job too long.

A dose of panic in a private place, with a bottle of malt whisky on one hand and a bean-counter on the other, can be a very motivational experience.

Do your damnedest to see that the little people get paid, if you can.

The more honest you are about your misfortune with those affected by it, the easier the comeback will be.

Pay the least tax that is lawful. But pay it.

Armies and governments fear men or women who know they are going to die soon; and they have good reason to.

Just try. Try for just a single day, a whole day when you refuse to acknowledge fear of failure, fear of making yourself look like an idiot, fear of losing your lover, fear of losing your job, fear of your boss, fear of anything and of any kind. Fear will creep back, usually at three in the morning. Laugh at it and tell it to take a hike. Smash it in the teeth. Spit on it. Put your arms round it and make nicey-nicey. Then slip a sharp blade into its stinking throat just as you're French-kissing it.

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.

Advice from a rich man

  • Get 'first flush' balminess out of your system as fast as possible.
  • Your oldest friends are your only friends.
  • Develop a passion outside of making money
  • Get your own private advisors.
  • Watch out for fraud in the early days.
  • Do not try to be friends with your staff
  • Do not sleep with your staff
  • Choose personal aides with enormous care
  • Never stop looking for talent and promoting talent
  • No deal is a 'must-do' deal
  • Lead. Do not be lead
  • Stay as healthy as you can.
  • Try to sell before you have to
  • Retirement will kill you.

The eight secrets to getting rich

  1. Analyse your need. Desire is insufficient. Compulsion is mandatory.
  2. Cut loose from negative influences. Never give in. Stay the course.
  3. Ignore 'great ideas'. Concentrate on great execution.
  4. Focus. Keep your eye on the ball marked 'The Money Is Here'.
  5. Hire talent smarter than you. Delegate. Share the annual pie.
  6. Ownership is the real 'secret'. Hold on to every percentage point you can.
  7. Sell before you need to, or when bored. Empty your mind when negotiating.
  8. Fear nothing and no one. Get rich. Remember to give it all away.

Related Notes

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