The idea that there is some sort of set of rules or formula that we can follow to become fabulously wealthy is something that has inspired hundreds of books, motivational seminars and property spivs.
The idea of a single, magical formula is silly, of course – as we know from following wealthy entrepreneurs in Australia and around the globe, there are many ways to get rich, from digging up rocks and selling clothes to building apartments and picking stocks.
However, that doesn’t mean that some billionaires have their own rules or personal mottos by which they operate.
Last week we learned about the personal philosophy of Ray Dalio, the billionaire hedge fund manager of Bridgewater.
While few billionaires can match his 83-page handbook (which contains more than 260 of his personal principles based around his idea of “hyper-realism”) there are a few wealthy entrepreneurs who have developed their own rules or mottos.
While most don’t give away their money-making secrets, they do provide some valuable tips for investors and entrepreneurs.
Legendary investor Donald Trump (valued at $US2 billion by Forbes earlier this year) is well known for dispensing plenty of advice to the would-be wealthy – he’s even got a business devoted to it, called The Trump Entrepreneur Initiative. The site has a host of blogs from Donald, several of which contain “rules” for success, but one of my favourites covers the vexed topic of business manners.
There are some basics here (including directives to be honest and be on time) but his best advice involves the importance of doing your homework on business contacts, and keeping a “mental dossier” on them.
“Before meeting people for the first time, do some research on them. People will be flattered if you reference a deal you know they’ve done or a charity they’re involved in.”
And I also love this advice, particularly coming from Trump: “Be self-deprecating and disarming. Don’t be a bulldozer in business; save your hardest edge for when you need it most.”
Way back in 1999, Microsoft founder Bill Gates became a best-selling author with his book Business @ the Speed of Thought. Part of the book’s message was about how companies could make digital information a part of their operations, and Gates provided 12 rules. Many of the rules (seen here in an old Time magazine piece) seem very dated now – particularly the idea of “insisting that communication flow through email” – but it is easy to see just how ahead of the pack he was, and there are some real gems here that address perennial issues.
Take for example, Gates’ three-step process for using technology to deal with complaints: “Focus on your most unhappy customers. Use technology to gather rich information on their unhappy experiences with your product and to find out what they want you to put into the product. Use technology to drive the news to the right people in a hurry.”
It’s smart advice for any entrepreneur, and Gates’ 12 rules are well worth re-reading.
The Oracle of Omaha is renowned for developing what is perhaps the most famous investment rule ever: “Rule number one is never lose money. Rule number two is never forget rule number one.”
But there are a number of other Buffett-isms that have been so regularly repeated that they seem to have taken on a life of their own as his golden rules. A few common examples include:
However, a Buffett “rule” that might appeal to a wider range of entrepreneurs concerns the art of selling: “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”
Oil man John Paul Getty famously outlined his rules for success in his book How To Be Rich. The main pieces of advice were to go into business for yourself and be prepared to embrace risk, but Getty was also a strong believer in remaining frugal.
“A sense of thrift (economy) is essential for success in business. The businessman must discipline himself to practice economy wherever possible, in his personal life as well as his business affairs. ‘Make your money first – then think about spending it’, is the best mantra for the man who wishes to succeed.”
Late media mogul Kerry Packer was never fond of finding his own name in the headlines, and after being attacked in 2000 for trying to minimise his tax he revealed this gem: “My motto basically is: never complain, never explain.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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