One of the greatest luxuries of my new existence is having the time to read all those business books that I have seen reviewed or have had recommended to me.
Two I've just finished (hey, I know I'm way behind the game here - both were released back in March) are Richard Branson's latest update of his Screw It, Let's Do It and The Tao of Warren Buffett , a collection of Warren Buffett's reflections on investing - which led him to become one of the world's wealthiest men.
There are now hundreds of books on wealth creation out there, all promising to reveal the magic 'Secrets of Success', but to save you a little time and money, here's my 5 minute simple guide:
1) All great fortunes are built on GIVING great value
...whether through creating companies which give customers brilliant products, fantastic services or unforgettable experiences (like Branson), or investing in them (like Buffett).
The judge in this process is always The Customer - whose perception is your only reality - so if what you're offering isn't turning them on (or enough of them on), then you need to change what you're offering until it does.
[There are virtually no exceptions to this rule, apart from a few dotcom millionaires. Then again, if you think about it, the commodity the dotcoms were selling which made them rich was actually the SHARES in their companies, which their 'customers' (the investors) held the perception would make them very rich. The promise of quick wealth is, in itself, a very seductive product... even if totally illusory.]
2) Most fortunes are built on 'One Big Thing'
Branson = Virgin, Gates = Software, Sugar = Electronics, Murdoch = Media. Even Buffett admits the majority of his vast fortune was built on major investments in just 10 great US companies. The moment most entrepreneurs start to diversify is the moment they tend to run into trouble. The problem most entrepreneurs have is that they throw off an idea a minute and consequently spread themselves far too thin. You're far better to choose the one thing that really turns you on - and then focus, focus, focus.
3) It takes time...
In Branson's case, probably at least 20 years until he really got past the point of worrying about money - according to the book even his purchase of Necker Island was highly leveraged. In Buffett's case, he always played the longer term, buying vast tranches of stock in great companies when they had fallen out of favour with the stock market and holding them often for over a decade while the market corrected itself and the underlying value continued to grow.
Take a look at The Rich List and you'll see that the vast majority of those included are 50+.
By the way, three small corollaries to the above:
- Many of those Rich List 'businessmen's' fortunes were not based on business at all - but on the underlying value of the property contained within their companies' balance sheets. Probably not such a great bet now, but over the long term, property is a great base upon which to build your wealth.
- Most of the people who you think are wealthy, aren't really wealthy at all.
- Most people who achieve great wealth see that it's all an illusion - and end up giving it away anyway.
So, to me, the more I read the more it reinforces one great fact: don't chase money; spend your time in business doing the thing that you love - and everything else will come to you naturally in the end.
Have a great day!