Why You Are Not Rich
American novelist and homespun philosopher Mark Twain noted one day that a person can lie with the numbers but the numbers don’t lie.
The rich have most of the money. That’s why they are called “the rich.”
So why is this super class of people rich? Most importantly, how do they really think and act differently from the great majority of people with identical levels of education and smarts?
Having spent a lifetime working with the “super rich” I thought I’d share with you some thoughts which I believe you’ll find in a few instances surprising.
By the way, by super rich” I am talking here about the entrepreneur who risks all of the capital he can muster from his family and friends to build a company that fills an underserved niche in the market, provides a needed service, or develops a new technology. People like Bill Gates, Warren Buffett, Larry Page, Sergey Brin, Michael Dell, Carlos Slim Helu, etc….who have provided value to the world and been rewarded for their efforts…. Not the hired hedge fund managers “master of the universe” types who are just shuffling paper.
So here’s the basics:
1. An equity position is Key to get wealthy. 90% of the super-successful say this is true, versus fewer than half of the masses. More importantly, 80 percent of such people say they already have an equity stake in their work. Just 10 percent of the middle-class have an equity position of any kind, and the vast majority (70 percent) say they’re not even trying to get one.
2. Nothing to do with Passion. Conventional wisdom suggests that “if you do what you love, the money will follow.” Not the case for the “super rich” who always look for the opportunity in business…whether they like it or not.
3. Nothing to do with Saving Money. The middle-class believes you can “cut back on little luxuries” to create wealth, even while middle-class incomes continue dropping. The “Super Rich” suggest that earning more, not saving more, leads to true wealth.
4. Nothing to do with being a First Mover but by imitating. In the beginning of the PC revolution, Seattle was the land of innovation and Kildall was its king. As the creator of the first computer operating system, he was the one IBM called when they decided to enter the PC market. Unfortunately, while Kildall missed deadlines because he wanted to debut the most innovative operating code of the time, Bill Gates offered IBM a paltry, second-rate product. Gates got the gig and Kildall got forgotten by history.
5. It is all in the “execution” not the idea. There is a dime a dozen ideas out there but only a few people who can execute ruthlessly and flawlessly on their ideas. Getting wealthy usually means you’ve taken an ordinary idea and executed it exceptionally well. That’s what 9 in 10 of the “super rich” believe. Most other people, though, think that wealth requires a big, new idea. Unfortunately for them, big ideas are rare and risky. Too many people are waiting on the sidelines for the perfect big idea to come along, while the most successful people have jumped in the game, and busily honed their skills at execution.
6. Always looking to gain an advantage. About 90% of the “super rich” say they are always trying to grab an edge, compared with just about 40% of the middle-class. Gaining even small advantages in a series of deals can have a cumulative effect on your wealth, but since most people aren’t even looking for one, they’re that much more likely to end up on the disadvantaged side of every deal.
7. Understand people’s motivations. If you’re dependent on other talented employees, you’d best know what makes those talented people tick. That’s the belief of about 70% of the “super rich”, compared with fewer than 20% of the middle-class. Their willingness and desire to really get to know and understand their business associates is a sure marker of success–and one that most people don’t have.
8. Not afraid to hire smarter people. Exceptional execution requires focusing on the two or three things the “super rich” do very well. So they get their work done by building teams with complementary capabilities. Surveys show that most people, though, would rather learn to do tasks they’re bad at than get others to do them. The “super rich” know that you get to the top because of your strengths, not your weaknesses.
9. Know how and when to say NO if the deal is not right. The “super rich” know that bad deals, like bad marriages, can be painful–and costly. So if the deal on the table isn’t right, 71% say they have no problem cutting bait and moving on. Only about 22% of the middle-class say the same. Most people are willing to take their chances on deals that don’t seem right from the start, even though it’s less risky to walk away.
10. Learned from their setbacks and failures what they are good at. The “super rich” have, on average, more failures than members of the middle-class. But they use those failures to help them succeed on the next attempt. Just 17% of the middle-class say they learn from their failures in this way, which is really a shame. Everything worth trying contains an element of risk, after all. If you fall on your face, you might as well learn from the experience to help you succeed on your next try.
Now that you know the basics….go make a killing and never turn back.