How to Get Rich by Felix Dennis
How to Get Rich Summary
How to Get Rich is an entertaining and informative tale about what it takes to amass a lot of money. Felix Dennis, an eccentric legend in the magazine publishing world, uses stories from his life of building businesses and chasing money to show the good, bad, and ugly of such pursuits. If you want to build wealth for yourself, this book undoubtedly has some practical advice for what it takes and what it costs to do so.
3 myths about getting rich
“The follow-through, the execution, is a thousand times more important than a “great idea.” In fact, if the execution is perfect, it sometimes barely matters what the idea is. If you want to get rich, don’t sit around waiting for inspiration to strike. Just get busy getting rich.”
- People became rich by accident.
- People got rich by having a “great idea.”
- What people did to get rich before can’t be done today.
How rich will Felix Dennis teach you to get rich?
“Rich enough to live where you want, to go where you want, to do what you want, to meet who you want. 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.”
Dennis acquired hundreds of millions of dollars before his death in 2009. He claims that he can’t teach you how to be Bill Gates or J.K. Rowling rich, but he can provide thoughts on acquiring more wealth than you know what to do with if you want it.
He offers a table to show where you fall at different levels of total net worth.
|$2-4 million||The comfortably poor|
|$4-10 million||The comfortably off|
|$10-30 million||The comfortably wealthy|
|$30-80 million||The lesser rich|
|$80-150 million||The comfortably rich|
|$150-200 million||The rich|
|$200-400 million||The seriously rich|
|$400-800 million||The truly rich|
|$800-1,998 million||The filthy rich|
|Over $1,998 million||The super rich|
Does being rich guarantee happiness?
No. It can provide you with comfort and possessions, but it also often comes with the stress of protecting your wealth and the guilt of figuring out what to do with it.
Does your background stop you from becoming rich?
“If you truly believe that your race, sex or upbringing can keep you from becoming rich, then you had best give up here. Either return this book to the shelf or, if you have already bought it, return it to the bookstore for a refund or give it to a friend. You may obtain the refund or please your friend. But you will never get rich.”
In short, no. While other people can work against you due to bigotry or prejudice, money is a neutral substance that does not care about your background.
Getting rich requires curiosity
“Anyone not busy learning is busy dying. For as long as you foster a willingness to learn, you will ward off sclerosis of the brain and hardening of the mental arteries. Curiosity has led many a man and women into the valley of serious wealth.”
Is getting rich worth it?
“Up to just seven years ago I was still working twelve to sixteen hours a day making money. With hundreds of millions of dollars in assets I just could not let go. Like I said, it was pathetic. Because whoever dies with the most toys doesn’t win. Real winners are people who know their limits and respect them.”
If he could do it again, Dennis says that he would dedicate himself to earning enough to live comfortably (for him, 60 to 80 million dollars) by the age of 35. He would then cash out and spend his days planting trees and writing poetry. In hindsight, it’s clear that everything he did to amass wealth came at the expense of many things, most importantly, the finite time that he had in life.
You can eliminate risk by talking and planning
While some planning and debate can help you reduce the risk of a business venture, this often leads people to avoid the most important step of making things happen and getting rich — taking action. The truth is that no amount of debate can make entrepreneurial endeavors “risk-free.” So while it’s important to act smartly, it’s better to simply act and learn as you go to avoid getting caught in the cycle of paralysis by analysis.
Getting rich requires thick skin
If you dare to do something different or to create large amounts of wealth, people will criticize you and tell you how you will fail at every corner. And at some corners, you will fail and hear all those people uttering that they told you so.
But if you’re serious about getting rich, you have to cultivate a strong mental armor to ward off the naysayers. You need to be open enough to take constructive criticism and to learn from your errors, but strong enough to act with conviction on your plan and to keep going in the face of adversity.
Requirements if you want to get rich
“After a lifetime of making money and observing better men and women than I fall by the wayside, I am convinced that fear of failing in the eyes of the world is the single biggest impediment to amassing wealth. Trust me on this.”
- 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 neighbors think, you will never get rich.
- If you cannot bear the thought of causing worry to your family, spouse or lover while you plow 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, 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.
You will not get rich by working for other people
“There is absolutely nothing more likely to dampen the prospects of becoming rich than a nice, fat, regular salary check.”
You can amass enough money to be comfortable if you earn a salary working for others, but you will not get rich this way. That does not mean that you should never work for other people. Especially early in your career, you can treat working for other people as a paid research experiment. You can learn skills, see how other people do business, and understand more about running an organization.
Don’t fall into the trap of working for other people for too long. You’ll get stuck with a cushy salary and develop a risk aversion that has stopped many people from trying to do something on their own.
Look for new and rapidly developing industries
While you can get rich by trying to take a slice of an already-baked pie, the best opportunities often come in new and hot fields. There are three reasons for this:
- Risk capital is more readily available.
- The ignorance of incumbents and fellow participants helps your cause.
- The rising tide will help fuel your efforts.
The fallacy of the great idea
“Good ideas are like Nike sports shoes. They may facilitate an athlete who possesses them, but on their own they are nothing but an overpriced pair of sneakers. Specially adapted sneakers may be a good idea. But the goal is still to win, and sports shoes don’t win. Athletes do.”
Great ideas are not enough to make you rich. That’s because the success of your endeavor is not about the idea. It’s about how you execute the idea and grow it into something that you could never predict in the beginning. Most of the work happens in the execution, so get busy doing something.
Look to your competitors for ideas. They will often come up with winning strategies that you did not think of. Instead of resenting this, learn to emulate their winning strategies to capitalize on the opportunity and to do it even better than they did.
Compulsion and desire are not the same things
“Wishing for or desiring something is futile without an inner compulsion to achieve it. Such lack of compulsion, if not frankly acknowledged, can lead to great personal unhappiness. We have all met deeply unhappy souls muddling along in professions or careers for which they are patently unsuited. Worse still, by continually wishing and never delivering, you risk denting your confidence, beginning a vicious downward spiral that appears to draw misfortune like a magnet. The assumption that you might be able to achieve some goal if you only wished hard enough is not just a f***-up. It’s a potential personal tragedy.”
The pursuit of getting rich has personal consequences
Anyone who is committed to the path of getting rich will inevitably fail in other important domains of life. That’s why so many rich people end up with rocky marriages, regrets about spending so little time with their children, and the loss of important friendships.
People with money will often try to buy gifts for people in their lives to repress the guilt of not being around, but these rarely work. And rich people often end up with spoiled kids who may be well-cultured, but who lack ambition or a taste of education.
Quit when you know it’s not working
Many people spend years on a losing strategy, often at the expense of their sanity and getting rich. While there are times when you need to keep grinding it out and plow forward with your idea, there are also times when you should give up and try something else.
Figuring out the difference between those two situations is critical. Because if you have a losing strategy and think it’s a slow-burn winning strategy, you can waste years continuing along a path that won’t yield the fruit you’re looking for.
Think big, act small.
Many people, including Felix Dennis during a period of life in which he spent tens of millions of dollars chasing booze, girls, and drugs, make the mistake of thinking small and acting big. When this happens, you can spend a lot of money or waste a lot of your precious resources or relationships on a path that leads you to destruction, both for yourself and your wealth.
The better path is to dream big and act small. Have a big vision for your life and business, but start enacting that vision on a small skill. Do the work every day, and keep building from there. Don’t take grand risks or try to do anything heroic when the best path is to act small toward your big dream. And most important of all, avoid thinking small and acting big.
Talented people don’t always want money
“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. This holds true even if talent is placed in the driver’s seat of a small division within an existing operation. What talent seeks, as often as not, is the chance to prove itself and the opportunity to excel.”
Don’t assume that money can lure everyone into doing what you need. Many people, including very talented ones, want the chance to prove their skills and grow more than a few extra dollars every month. Money may be one motivating factor, but it’s a mistake to assume it’s everything.
Stubbornness is not persistence
“Stubbornness implies you intend to persist despite plentiful evidence that you should not. A stubborn person fears to be shown he or she is wrong. A persistent person is convinced that he or she has been right all along, and that the proof lies just around the corner. That with just a little further effort, the veil of failure will be torn away to reveal success.”
Quitting is only dishonorable when you still believe that you can succeed. To quit in the face of overwhelming evidence that you won’t succeed is a smart thing to do learn to do.
Doubt and self-belief
“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. Doubts can and should be confronted, as should fear. This is best done in daylight, under rigorous examination. (Three o’clock in the morning is a difficult time to confront any such messengers.) Write down your doubts and fears. Examine them. Hold them up to the light. Suck the wisdom out of them and discard their husks in the trash.”
You have to believe in yourself, even when the little self-doubt monster pays you a visit. That’s because if you don’t believe you can do it, no one else will either. When you have self-belief, you can achieve pretty much anything that does not defy the laws of physics. Without it, you’re burnt toast.
Thoughts on luck
- “Prepare yourself for luck, but don’t seek her out. Let her come to you.
- 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.
- Be lucky. Get rich. Then give it all away.”
Tips on negotiating
People use the term negotiation loosely. But negotiation is about serious, money-making or money-losing business. Discussing salary changes or quarterly goals may involve two parties talking, but it’s not a real negotiation. Real negotiations are about deals and partnerships that change everything and that can make you very rich in the process.
- Remember that most people are not good at detailed negotiations. 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.
- 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 is in the detail in serious negotiations. Get all the professional help you can trust. But do not surrender control of the negotiations or the agenda to such professionals. They are not the ones who will have to live with the consequences — you are.
- If your advisors are leading you down a path you don’t approve of during your negotiations, tell them privately that if they continue along that route you will get yourself some new advisors.
- Never fall in love with the deal. A deal is just a deal. There will always be other deals and other opportunities.
- Avoid buyer auctions. You will pay more than you need.
- The negotiator opposite you is not a friend, partner, or confidant. You’ll get robbed if you think he is.
- Listen intently during negotiations. Use silence as a weapon.
- Limit the size of the negotiating team, ideally to you. Don’t allow the other side to drive a wedge on your side.
- If you are a very poor negotiator, send a delegate with all possible information about how you would respond in certain scenarios.
- Find the balance of weakness in a negotiation. They’re usually hidden, but they determine the outcome.
- Fulfill whatever bargain you agree to in a negotiation. Do not be a weasel.
Getting rich requires ownership
“Ownership is not the most important thing. It is the only thing that counts. Nothing else counts in the getting of money. Shareholder thanks do not count. A good salary and a company car and health plan and pension don’t count. Most share options (usually nothing more than the promise of chickenfeed to salaried employees, and a promise broken half the time, too), don’t count. The gratitude of colleagues doesn’t count. Nothing counts but what you own in the race to get rich.”
Fight with everything you have to own as close to 100 percent of the company. There will be endless ploys from employees, investors, and other parties to try to take a chunk of your share. Give away only what is necessary.
“But I will not give them a share. Not one. Not for love. Nor for loyalty. Not to be fair. Because capitalism isn’t fair. Life isn’t fair. The lottery of what genes we are born with isn’t fair. The moon and the stars and the gas clouds of Alpha Centauri aren’t fair.”
For employees, you can give them bonuses and a share of the profits. But do not give them equity if you can stop it from happening. Even when that’s painful.
Admit your mistakes if you screw up
“Screwing up isn’t criminal or deliberate or malevolent. But covering up is, if you get caught. And you will get caught—ask the shade of Richard Nixon. Closing down a business or going into bankruptcy is a miserable affair at any time. My advice is not to make it worse by omitting to apologize and shoulder the responsibility squarely. But don’t take it too much to heart. There’s always the chance of a comeback.”
Time > Money
Being young and broke is better than being old and rich. Most old rich people would give everything they have to be young and without a dime. That’s because time, not money, is the most precious resource we have.
Find your money
Live by this motto: “The world is full of money. Some of it has my name on it. All I have to do is collect it.” Then go about looking for money with your name in it. You can find it in established industries (if you put a new spin on something) or in new industries.
Thoughts on staying rich
- As soon as you’ve spent, gifted, loaned, or invested money, forget it. Don’t fret about past investments or expenditures. That’s wasting time and energy.
- Don’t loan money to friends. You’ll lose the money and the friend.
- You’ll have a crazy spending phase. Get that phase done with as soon as you can and move on.
- Your oldest friends are your only friends.
- Find hobbies outside of making money. These hobbies will keep you from the vices that kill you.
- Invest in the best personal tax, legal, and estate advisors.
- Don’t be friends with or sleep with your staff.
- Choose your personal aids and security wisely.
- Continue spotting and investing in good talent.
- Stay as healthy as possible.
- Sell a business that you’re bored with, and sell before you have to.
8 secrets to getting rich
- Analyze your need. Desire is insufficient. Compulsion is mandatory.
- Cut loose from negative influences. Never give in. Stay the course.
- Ignore “great ideas.” Concentrate on 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. Get rich. Remember to give it all away.
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