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How to Be Rich - Even Today! - Outside View by Mark Ford

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How to Be Rich - Even Today!
Feb 14, 2017

Mark Ford

'Contrary to popular modern belief, it is still quite possible for the successful individual to make his million - and more.'

J. Paul Getty wrote these words in 1965 in his book How to Be Rich. I first read it more than 10 years ago and liked it very much. I read it again recently and was equally inspired.

It's a quick and easy read, but it's loaded with practical advice for anyone who wants to build wealth: business owners, professionals - even superstar employees.

Getty was a very rich man. I've heard it said that in today's dollars, his wealth was greater than Bill Gates' and Warren Buffett's combined.

Getty made his fortune by buying oil businesses at bargain prices just after the Great Depression. A small portion of the book is devoted to telling this story. The rest of it presents Getty's thesis: that the best way to become rich is to own or work for a growing business, and that business growth is dependent on following a dozen or so common-sense strategies.

'Although there are no sure-fire formulas for achieving success in business,' Getty says, 'there are some fundamental rules to the game, which, if followed, tip the odds of success very much in the business man's favour.'

As the author of The Reluctant Entrepreneur, I was delighted to note that Getty disputed the notion that entrepreneurs should 'think big and take big chances.' His success, he says, came from 'thinking small' (i.e., paying attention to details) and avoiding risk at every juncture.

How to Be Rich also has a chapter devoted to passive investing. Most people don't realize it, but Getty's record as a buyer of stocks was stellar. What was his strategy? To buy great companies with distinct competitive advantages when their shares are cheap.

Getty wrote How to Be Rich when I was about 15 years old. The world was a very different place then than it is now, so you might wonder: Do those same rules apply today?

If you are at all familiar with my thoughts on wealth building, you know my answer. Let's review just a few of Getty's rules to see if they hold up today:

  • 'The best way to make a fortune is to own your own business.' I made that observation in Automatic Wealth and in a half-dozen books I wrote since, including Ready, Fire, Aim, The Reluctant Entrepreneur, and, most importantly, for members of the Wealth Builders Club.
  • 'The central aim of every business is to produce more and better goods (or more and better services) to more people at a lower cost.' That should be the aim, but too many young entrepreneurs today believe their purpose is to create something that they can sell to a larger company for billions of dollars. Still, this is the best way to build a lasting relationship with customers.
  • 'A sense of thrift is essential for success in business.' I haven't written much on this. Perhaps because I don't have a natural 'sense' for thrift. But I do know that thrift in business is important. If you neglect the cost side of your business, your profits will eventually disappear.
  • 'Legitimate opportunities for expansion should not be overlooked.' Legitimate is the key word. I take it to mean 'realistic' - that expansion and/or acquisition is good for business only if the chances for success are very good. My rule on this: Expand only into areas about which you are already at least 80% knowledgeable.
  • 'The business owner must run his own business. He cannot expect employees to run it for him.' I've made this point many times. When a business gets big, the owner will be tempted to do the 'easy work' of making speeches, attending functions, and writing inspirational memos to employees. But if you spend too much time doing that, you will lose the knowledge and skills you once had to do the 'hard work' - developing marketable products and selling them.
  • 'The business owner must be constantly alert for new ways to improve his products and services and increase his production and sales.' Again, this is something I've covered in many essays and all my books on business building. The strategy I recommend is 'incremental augmentation.' It's the opposite of 'if it ain't broke, don't fix it.' It's based on the belief that if you aren't always improving your product, a competitor will eventually create something better. This was always true, but in today's electronic, information-based economy, it is essential.
  • 'Nothing builds confidence and volume faster than a reputation for standing behind one's product.' Again, this is critically true today. Unless you have a virtual monopoly like the cable companies, you can't get away with treating your customers badly.

So, the answer is yes: The wealth-building ideas in How to Be Rich are as true today as they were in 1965. And they seem to be as true for big companies, as they are for smaller entrepreneurial companies - the ones I write about.

If you read How to Be Rich, you will like it. But you may find yourself wanting more - more specific examples, more instruction, more detailed guidance.

If you want to get serious, I would recommend that you join the other members of my Wealth Builders Club in India... These are the most important secrets I've ever discovered about building wealth. It's a one-stop supersonic plane trip for anyone who wants to fly as quickly as possible to financial security and a comfortable retirement.

Editor's Note: In fact, many members of Equitymaster are Wealth Builders Club members already. But we have asked Anisa Virji, the Managing Editor of the Wealth Builders Club, to request Mark to open membership to this exclusive service just one more time for those Equitymaster members who have not had the chance to try it yet... so cross your fingers and we might all just get lucky.

Mark Ford is a globally renowned author, entrepreneur, millionaire wealth coach. He founded the Wealth Builders Club which has helped hundreds of people around the world achieve a financial success most people only dream of.

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1 Responses to "How to Be Rich - Even Today!"

KD

Feb 14, 2017

Excellent article. I want to add that if you want to successful in business then you should have excellent people skills. This reminds me of quote by Shiv Khera: "We don't have business problems we have people problems. When we take care of our people problems, most of our business problems are automatically resolved".

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