The 7 most important factors for getting rich
Some people believe that becoming rich is a question of luck. Historian and sociologist Dr. Rainer Zitelmann disagrees. Whether chance presents you with a good opportunity or not is not the key question. Rather:
- Do you actually recognize the opportunity in front of you? Or do you fail to appreciate it for what it is? As the Swiss author Max Frisch once said, “Chance shows me what I have an eye for.”
- And if you do recognize your lucky break, do you take advantage of it? Do you act? Or are you someone who says: “Maybe now is not the right time. Perhaps it’s something to think about one day…”
The likelihood that someone would only ever experience either good or bad luck during their lifetime is very low. Over many years and decades, in most cases, good and bad luck should balance each other out.
1. Setting Big Goals
Jack Ma failed the test to get into university, wasn’t very good at math, and didn’t know much about technology. But from the beginning, he thought big and set very ambitious goals for himself. Shortly after founding Alibaba, he told a journalist: “We don’t want to be number one in China. We want to be number one in the world.” He was so sure of his future success that, in February 1999, he even had one of Alibaba’s earliest meetings filmed – to make sure this key moment was documented to mark the beginning of his success.
2. The Ability to Sell
Two-thirds of the interviewees in my book The Wealth Elite stated that they owed much of their success to their ability to sell. For them, selling is not just about marketing products or services. They define sales far more broadly. To them, selling is all about being able to convince other people, whether it’s getting approval from a government official, persuading the perfect applicant to accept a job, winning over employees, or talking a banker into making a firm financial commitment. “Everything is sales,” explained one of my superrich interviewees.
3. Nonconformity: Taking Joy in Swimming Against the Current
The investor Jim Rogers studied history and philosophy at Yale and Oxford before he took a job on Wall Street in 1968. During hard times for the US stock market, he succeeded in laying the foundations for his wealth and success.
Rogers met George Soros at a major investment bank. Together, they founded the Quantum Fund. They tore up the investment banking rulebook, buying stocks, commodities, currencies, and bonds from all over the world. They were also among the first to use innovative strategies such as short selling.
Unlike most other investors, Rogers bought shares in companies that were in trouble. In the mid-1970s, for example, he invested heavily in the aircraft company Lockheed. Rogers once told the story of a fancy dinner with bankers and investors. One of the other guests had heard that Rogers had been buying Lockheed shares. At that time, Lockheed was hit by a number of scandals and getting bad press nearly every day. The company’s share price had collapsed.
“Who would invest in a company like that?” wondered one of the guests – loudly enough that everybody at the dinner could hear him. The other guests joined in the laughter. Rogers felt humiliated – after all, he was the butt of their joke.
But Rogers had done his homework, and he was right with his positive analysis of the company. The share price shot up, and his fund made a huge profit. At the same time, the S&P 500 Index rose by just 47 percent, the Quantum Fund managed by Rogers and Soros gained an incredible 4,200 percent.
4. Being Able to Handle Setbacks
Most of the superrich have faced serious setbacks and crises. What is striking is the attitude they generally take when things go wrong. They do not blame outside forces or other people but look for the fault in themselves.
They do not complain about being the victims of circumstance or the evil deeds of their opponents; they take personal responsibility for their mistakes. Nor do they make excuses for negative market developments. If the market takes a tumble, they blame themselves for misjudging the market. So often, this is what distinguishes successful people from unsuccessful people.
5. Focus, Focus, Focus
In early July 1991, Bill Gates Sr. invited some guests over for dinner, including his son Bill Gates, Jr. – the founder of Microsoft – and the investor Warren Buffett. These were two of the most successful men in the world who, for many years, had been at the top of the Forbes World’s Billionaires list. The host asked his dinner guests, “What factor do you feel has been the most important in getting to where you’ve gotten in life?”
Buffett immediately replied, “Focus.” Bill Gates, Jr. agreed.
Warren Buffett, too, had focused on a single goal for decades. According to his biographer, Alice Schroeder, even as a child, his dream was to become rich. One of his favorite books was One Thousand Ways to Make $1,000. When he was 11 years old, Buffett announced that he would be a millionaire by the time he was 35. At 16, he had already saved up $5,000. Today, that would be worth about $60,000 – not bad for a 16-year-old. His prediction was only off by five years. He made his first million by the time he was 30.
6. The Ability to Win Trust from Others
John D. Rockefeller, one of the richest men in history, is proof of just how important trust is in business. For the young Rockefeller, a key to his future success was realizing that “old men had confidence in me right away.” Throughout his incredible career, he said, his biggest problem was always “to obtain enough capital to do all the business I wanted to do and could do, given the necessary amount of money.”
His ability to win the trust of banks and investors was one of his most valuable assets, as Rockefeller knew well:
“It is chiefly to my confidence in men and my ability to inspire their confidence in me that I owe my success in life.”
So, what’s the best way to get other people to trust you? By acting and – even more crucially – by thinking in a way that inspires trust. Warren Buffett applies the following test to every decision and action: is it something you would be happy for your wife, family, friends, and neighbors to read about the next day in their local newspaper?
7. Persistence and a Willingness to Experiment
Many books stress the importance of persistence, and that’s true. But staying power alone is no guarantee of success. It needs to be combined with another very important characteristic: the willingness to experiment. Experimentation is more important than a precise business plan.
Michael Bloomberg, No. 9 on the Forbes list of the richest people in the world with assets of $55 billion, details the earliest days of his company. One of his key insights is that rigid planning can do more harm than good:
You’ll inevitably face problems different from the ones you anticipated. Sometimes you’ll have to “zig” when the blueprint says “zag.” You don’t want a detailed, inflexible plan getting in the way when you have to respond instantly.
If you want to understand the success of many startup companies in Silicon Valley, you need to understand the idea of “pivoting.” This involves being prepared to radically change your business model at a moment’s notice. The goal is not to stick to an original concept and prove how good it is. The goal is to establish a strong market position. If that means abandoning the plan and giving the company a completely new and different direction, then it’s time to pivot.
Article by Dr. Rainer Zitelmann, historian, sociologist, world-renowned author, successful businessman and real estate investor. He has written more than 20 books, including Dare to be Different and Grow Rich : Secrets of Self-Made People and The Power of Capitalism.
Republished under Creative Commons Attribution 4.0 International License. This article was originally published on FEE.org. Read the original article.