In the early to mid-1970’s, a million dollars was a great deal of money, and thinking about becoming a millionaire was thinking very big indeed. A million dollars was a fortune to be amassed. Today it is a yearly income, or, at best, a couple years’ income needed by anybody attempting to amass a real fortune.
In a documentary on Ted Turner, he was bemoaning the loss of much of his wealth thanks to AOL/Time Warner, and worrying about being “down to a billion” while still in his 70’s — he said he hopes to have enough left to retire on someday. You can, he pointed out, get by on a billion if you’re careful and don’t buy too many planes or yachts. He was speaking tongue-in-cheek, but not totally. Just as 80 is the new 60 and we hope 100 will soon be the new 80, a billion is the new 25-million.
The first arsenal of skills and strategies one should master are those of survival. How to be broke but live well. How to pay one credit card with another. How to look the part and act as if. Some of these skills have lasting value, but most become an impediment, standing in the way of developing the different set of skills one needs next. I think overall, one of the hardest things we do in life is shed the thoughts, attitudes, skills, habits, associations that worked for us when doing “A” but hold us back and get in the way of doing “B”. We shed skin easily and automatically. We do not shed thoughts and behaviours so easily.
The second arsenal one should master are those for making money. Lots of it. In chunks and surges. These days, to be a millionaire is not all that complicated. If you happen to be young, 20 or 30, you can very, very easily reach and surpass that benchmark purely with an intelligent retirement plan (or other tax protected savings plan) by saving and contributing the maximum amount allowed every year. Or by buying a few good homes and owning them for the long haul. That will get you a million dollars someday.
To take it one step further, earning a million dollars per year – even though that certainly puts you at the 1% pinnacle of society – is also actually not all that difficult. A great many businesses or combinations of businesses provide such opportunity. It is, for example, nothing more than 1,000 transactions of $2,000.00 each with 50% net. Or 100 at $20,000.00 each. Or 1,000 customers giving you $100.00 a month. Or 2,000, giving you $50.00. I just read a report of a Gourmet Bacon Of The Month Club providing its owner with such income. Bacon.
Making lesser but still significant income, $100,000.00, $200,000.00 a year, even easier. A good handyman with nothing but a cellphone could have a ‘concierge practice’, with, say, 25 clients each paying him $300.00 a month…$7,500.00 a month, $100,000.00 a year. Just not that tough. More mental barriers than anything.
But if you start to think in terms of creating and keeping a small fortune in the 10-million to 50-million-dollar neighbourhoods, rather than just a million or two, the arsenal of required once again changes substantially. The knowledge needed, different. The mind-set needed, different. Here, in this space, an odd combination of daring, speed, grabbing of opportunities must be counter-balanced with a concern for preservation of capital, a diligent management of the money, not just making it.
I spent time the other day with one of my long-time clients who personally earns about 5-million a year and is worth about 4 million. He is busily involved in dozens of high-pressure projects. He said, “I often fall into shit. Sometimes I come up with gold. Other times I come up with shit. My success rate does not distinguish me. Being willing to dive into shit, that distinguishes me.” Different mindset.
We’ve talked about speed. To become a millionaire, you can do things slowly, methodically, logically, sequentially, neatly and cautiously. To be a multi, multi-millionaire, you cannot.
To stay a millionaire once there, you need to conserve. To buy carefully, spend reluctantly, invest wisely. Never paying more than is necessary. To stay a multi, multi-millionaire you need to be more aggressive. You often cannot afford to get the very best buy, as your time and lost opportunity is far more valuable than the deal available across town.
There is a hierarchy of sorts for independent business. It is: shopkeeper; business owner, entrepreneur; entrepreneur-investor; investor-entrepreneur. One of the painful aspects of moving through these stages is doing less of something you’ve mastered (and can do easily), in favour of doing other things you’re clumsy and uncertain at; the constant setting aside of old tools with which you’re expert in and picking up new tools you are profoundly inexpert with; of climbing Maslow’s step again and again and again.
Questions: What skills do you have that are useful not just at present but for where you want to go? What present skills are holding you back? What skills do you lack currently, but will be needed for the spot just ahead on your chosen road? Do you even have a Personal Skills List each ranked 1-10, and a list of New Skills In Development?
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