Today’s issue is the first of what I intend to be a regular monthly issue. I’m calling it my “Monthly Money Report” because its contents will be limited to topics related to money: entrepreneurship, business, marketing, investing, etc.

These are subjects I spent 60+ years learning about by doing them, not reading about them. They are also subjects I’ve been writing about for the last 25 years.

If you’re a longtime reader, you know that I don’t often include these topics in my regular issues, even though all my bestselling books are very much about increasing personal income and growing wealth.

The reason for that is because I’ve always thought of this as a kind of journal in which I’d write about anything that interests me personally, rather than about what my partners and publishers want. Nevertheless, I have continued to write about wealth and wealth building for my Japanese publishers, with whom SM, one of my publishing partners, and I head up to publishing franchises.

Recently, we were approached to publish those services in the US and other English-speaking countries. After thoughtfully discussing all the reasons we shouldn’t, we said, “Yeah! Let’s do it!”

His beat will be stocks, bonds, options, and trades. Mine will be business building and wealth strategies I learned from years and years of personal experience, starting with nothing. No money. No connections. No financial or business education. And no idea what an interesting and rewarding path I was on.

Which is to say I’ll be thinking about such things more than usual in the future than I have in the past. And when I think about things, I like to write about them.

If you haven’t read any of my stuff on building wealth, don’t expect to be wowed by lengthy technical analysis or deep thoughts about long cycles or modern economic theory. My approach has always been to admit (to myself and my readers) that although there are lots of games to play in the more-money carnival, I stay away from those about which I don’t have “inside knowledge” and those about which I have no control.

So what you will see in this issue and in my future “Monthly Money Reports” are two kinds of essays: (1) those I’ve written, which means I have a high level of confidence in the advice I’m giving, and (2) those written on subjects I have little experience with, but always by experts I’ve known and worked with for at least a dozen years.

Let’s get to it…

Since we are all reasonably well-read and unreasonably self-assured, my Sunday evening Zoom conversations with my brothers tend to be burnished with references to such luminaries as Aristotle, Thomas Aquinas, Confucius, John Locke, and Jean Paul Sartre, to name a few.

This time, the conversation once again drifted to the idea of virtue – to whether it is something that can be universally defined and understood (as many of the great philosophers and theologians have said) or whether its meaning differs depending on social, cultural, and economic circumstances.

To keep it from moving into the usual highfalutin slugfest of esoterica (at which I tend to be at a disadvantage), I tried to redirect the conversation.

“I believe there are all kinds and manners of virtue,” I said. “High virtues and low virtues, survival virtues and abundance virtues, business virtues and personal virtues, etc. Let’s talk about loyalty, for example. I think we can all agree that loyalty is a virtue.”

They agreed, and I continued.

“A dictionary might define loyalty as faithfulness to a person, group, cause, or ideal. But that doesn’t explain the many ways one can show loyalty. One way is to be faithful in marriage. Penelope was faithful to her husband Odysseus for 20 years, despite entreaties by wealthy and generous suitors almost every day.

“Another definition of loyalty might be having an allegiance to a cause, idea, or ideal – such as defending one’s country or equal rights or Communism. Of course, this kind of loyalty is a two-edged sword, for it must eschew judgement, and evenhandedness, and sometimes even the truth. When I swore to the cops that that tall guy hit Mike P. first, I was being loyal, but I wasn’t telling the truth. One could also argue that a mother turning in her kids to the cops might be practicing a form of loyalty – loyalty to the idea that truth is the ultimate ethic.”

We had some fun with that idea for a while, but it wasn’t anything we could sink our teeth into. So I did what I usually do in such situations: I doubled down on my argument by making it even more extreme.

I took a moment to take a long, slow draw on my Padron Aniversario Churchill.

“There are two major distinctions that must be made when talking about virtues,” I said, not quite sure where I was going with this.

“Which are?” one of them asked.

“Although some virtues can be said to be ‘human virtues’ because they apply to everyone, there are some that apply only to one group or another.”

“For example?”

“For example,” I said, “some virtues are masculine. And some are feminine.”

“As in only men have this virtue and only women have that one?”

“No, not like that,” I said, shaking my head.

I thought for a moment.

Then I said, “Since we’ve been talking about loyalty, let me use that as my example. Consistency and reciprocity are forms of loyalty – virtues that can (and should, depending on the context) be practiced by both sexes and in all situations. But I see consistency as being essential in creating love and harmony in personal and social relationships. So for that reason, I’m going to call it a feminine virtue. And I see reciprocity as being essential in maintaining goodwill and cooperation in economic and business relationships, which makes it a masculine virtue.”

Then I said something like this:

“The primary social contracts in our personal lives are between husband and wife and between parent and child. Virtue in this context means being faithful to the core requirement of social relationships. And that means doing what you promised to do and sticking around for as long as you promised and are needed. In traditional marriages, the tenure of the spousal promise is until death does the parting. In traditional parenting, the tenure is until the child can survive and prosper on its own.

“The primary social contract in business and wealth building is reciprocity – the free exchange of one type of value for another. The most obvious example is the buying and selling of goods and services. But this principle also holds true for other sorts of exchanges. For example, the salary the manager pays for the work of the employee. It holds true also for the relationship between CEOs and company shareholders. And between wholesale and retail exchanges. The list goes on and on.

“There is another kind of value exchange in business where the rules of reciprocity are not so clear. I’m thinking of mentorship – the free exchange of knowledge and skills, which provides the recipient with an invisible ticket on an invisible train that will take him up the corporate ladder and allow him to become wealthy and powerful if he plays it smart.

“The opposite of consistency is abandonment. The opposite of reciprocity is defaulting on an IOU. We can try to rationalize abandonment and default if we feel we need to. But we can never escape the guilt of those two evils because their virtuousness is deeply threaded into our DNA.”

Since my bailiwick is business and wealth building, I’m going to continue here with my thoughts on the virtue of reciprocity. And I’m going to define it as the foundational moral contract between people engaged in business and commerce. It is the sometimes unspoken but always existent agreement between employers and employees, companies and their customers, corporate management and shareholders, etc., to treat one another fairly.

It means that each party agrees that in the mutual transactions of business there exists an ethical obligation to pay one’s debts – whether they are stated or not. And that the term of such obligations is until they are paid.

The Anthropology of Reciprocity 

The idea of reciprocity wasn’t invented in a boardroom, just as the idea of consistency wasn’t started in a medieval court. It started much earlier – back when dinner could swim away or outrun you.

In hunter-gatherer societies, survival depended on skills that took years, often decades, to master. Hunting large game. Reading the weather. Finding fish when the rivers ran thin. These weren’t things you figured out with a YouTube tutorial. You learned them from someone older, someone who’d already made all the expensive mistakes.

Anthropologists call this kind of know-how “embodied capital” – i.e., wisdom stored in muscle memory and scars.

According to Nigel, research on foraging societies shows that people continue to develop subsistence and survival skills into their 30s and 40s. But they don’t wait till they are done producing to pass along those skills to the next generation. They start mentoring the young when they are in their late teens and 20s, which begs the question: Why would an expert train his replacement?

The answer, some anthropologists say, is a deal as old as humans: I’ll teach you how to survive now. And when I slow down, you’ll make sure I still eat.

I asked Nigel to give me some back up on this, and here is what he said:

Food sharing among hunter-gatherers wasn’t an occasional act of charity; it was constant and extensive. Among the Aché of Paraguay, anthropologists Kim Hill and Hillard Kaplan found that hunters shared a large majority of what they caught far beyond their immediate families.

And crucially, this sharing wasn’t always immediate or equal. It often worked on delayed reciprocity: You give now, trusting that the group – and specific people within it – will give later.

In Inuit societies, for example, ethnographic and oral-history accounts describe younger hunters routinely provisioning elders, especially parents, as a matter of obligation and respect. Food circulated through kin networks not because people were nice, but because everyone understood the math: Someday, you’d be the one with slower legs and shakier hands.

Modern economists might miss this because they look for explicit contracts. But the virtue of reciprocity doesn’t need paperwork. It needs memory. You remembered who taught you. Who helped you when you were helpless. Who mentored you when you were unskilled and ignorant. You remember those who showed you where the fish truly were – not where they were supposed to be.

Seen this way, loyalty isn’t some Victorian moral ideal. It’s a sophisticated and fundamental survival technology. A way to stretch the benefits of skill across lifetimes. Knowledge flowing forward. Caretaking flowing back. And the gene pool enduring.

What to Do When Your “Quid” Is Not “Pro-Quo’d” 

But what do you do when someone you’ve helped succeed in business is disloyal to you?

I’m not talking about minor acts of disloyalty, such as not giving credit where credit is due. I’m talking about people stealing from the hand that once fed them. Or even biting it just to see it bleed.

This sort of disloyalty doesn’t happen very often. In my personal experience, it happens rarely. But it has happened to me. And when it happened, my immediate response was – as you might expect – shock followed by outrage followed by thoughts of punishment and revenge.

But those are thoughts that need to be vanquished. I learned long ago that indulging such emotions – even a little bit – almost always takes the relationship (and one’s peace of mind) from bad to worse.

One of my lifelong friends who is familiar with the way I do business once asked me why I am so loyal to others even when they are disloyal to me. I told him that I had decided that there were some thoughts and feelings that, however spontaneous or common they were, had a negative effect on my character.

The desire for retribution and revenge are two of them. So are jealousy, resentment, and envy. I see them as symptoms of weakness. The emotional responses to injury or imagined injury of weak-minded people. Allowing them space is distracting. Dwelling on them is hobbling. Indulging in them crippling and counter-productive.

I’ve had this perspective for many years now and it has found roots in my limbic brain. Whenever I encounter acts of disloyalty from people who should be grateful to me, my first response is no longer anger. It’s more like resigned disappointment, followed by, “How can I minimize this or make it disappear?”

I see it as not only a grace that calms my nerves, but as a super-valuable skill that allows me to sometimes turn water into wine.

I don’t often talk about this to people I’m coaching or mentoring. What I do talk about – a lot – is the power of reciprocation and how it compounds over time. I tell these young people that if they train themselves to appreciate the gifts that others give them and never fail to reciprocate –abundantly, not just in kind – the path ahead of them will get straighter and smoother with every passing year.

I say it because I know it to be true.

RT was telling me about a new BJJ dojo he was opening about six miles from his main facility. The story of how he got this new business rolling is straight out of Ready, Fire, Aim, which he tells me he’s read two or three times.

But that’s a story for another day.

Today, I want to share with you something I came up with to explain the fundamentals of sales and marketing. I wanted it to be comprehensive but simple and easy to remember. And I think I have it. For the time being, I’m calling it:

Six Absolutely Necessary Steps to Building a Lifelong Seven-Figure Business

The first three steps are essential for getting any business off the ground. The second three steps are essential for keeping a profitable business going over time. If you fail at any of them, there is a good chance that your business will wither and die. (In my experience, the failure usually takes place in the first three to seven years.)

To start a profitable business, you must know how to:
1. Attract attention.
2. Create a desire.
3. Offer a unique solution.

To keep your business profitable, you must know how to:
4. Turn that solution into a behavior.
5. Turn that behavior into a habit.
6. Turn that habit into an addiction.

I’m writing this while I’m in Baltimore for an end-of-year review of Agora’s seven domestic and six international publishing groups, which will be followed by their annual holiday party.

This year’s reviews are much better than they’ve been since 2021. The success that’s been achieved in moving through the slough and rebuilding our business is more than I expected. And that, I’m happy to say, is due to a new generation of creatives and executives who understand the business better than we did when we grew it from $8 million to more than a billion.

Listening to these youngsters has me thinking about our possibilities for the future. And for the moment, that has inspired me to put together this issue about how to grow and regrow successful businesses.

Growers and Tenders, Alphas and Betas 
Choosing the Right Personalities to Grow Your Business 

Many years ago, I came up with what I believe may be one of the better insights into the question of how entrepreneurial businesses grow.

My thesis was that there are basically two kinds of business leaders – those that have the personalities and skills to start and grow small businesses, and those that have the personalities and skills to manage businesses once they become large.

I named the first type “Growers” and the second type “Tenders.”

A new concept I’ve come up is that there is another way to describe executive leadership styles – one that is related to Growers and Tenders, but only indirectly.

The idea is that there are two distinct kinds of managers: Alphas and Betas.

Alpha managers are just what you’d think – confident, commanding, and assertive, sometimes to the point of coming across as overbearing.

Beta managers are in many ways the opposite – careful, cooperative, and agreeable, sometimes to the point of being overly compliant.

Alpha managers pursue objectives forthrightly and deliberately. They lead with confidence in the value of the goal in order to motivate their colleagues and subordinates to work confidently, too. And they do that even when their own confidence is limited.

Beta managers pursue objectives cautiously, seeking feedback from their colleagues and subordinates to achieve a common consensus about the worthiness of the goal (even if it is a company mandate) and the best strategy to achieve it.

Alpha managers lead like warriors. Beta managers lead like den mothers.

Now here’s the interesting thing about the difference between Growers/Tenders and Alphas/Betas. Although they generally overlap in terms of attitude, work ethic, and leadership style, the overlap is not 100%.

Growers are all Alphas because the psychological characteristics of Growers are 100% Alpha. Tenders, however, can be Alphas or Betas – and some tending roles are better handled by Alphas, while others are better handled by Betas.

The most obvious example of a tending role that is better handled by a Beta is the executive assistant – especially the assistant to an Alpha Grower.

The reason for that is simple. An Alpha Grower cannot function well if he is not supported by a Beta Tender to attend to the disorder that inevitably follows when he moves ahead with his mission, unconcerned with the operational and moral debris that almost always comes from the changes he is rapidly and determinedly making.

What cannot work ever in an entrepreneurial business, or even a mature company determined to achieve further growth, is a Beta executive in any department that is a part of any of the business’s revenue generating functions. That would include COOs and directors of departments engaged in product development, sales, and marketing. Because despite their natural ability to solve problems and boost morale, Betas do not have the harder leadership skills required to make a business grow.

What they do have is the ability to make their boss feel like everything is moving ahead in a positive direction – to soothe the fears of the founder/CEO who is concerned about the lack of growth and convince him that no changes are necessary.

What’s even worse for founders/CEOs who have Beta executives reporting to them in growth-oriented positions is that a Beta executive will almost never hire an Alpha executive for any job, including a growth job, because Betas see Alphas as inherently dangerous and destructive.

The takeaway: For management positions that are not directly involved in product or revenue growth, Betas may be appropriate. But to lead departments whose function is to support growth, only Alphas should be chosen.
Want to Grow Your Company’s Revenues? 
It’s Not Complicated 

It must have been 30 years ago when I heard Jay Abraham tell a room full of young entrepreneurs, “There are basically only three ways to grow your business. You can increase the base of your customers. You can increase the average number of purchases your customers make. And you can sell them products at higher prices.”

I remember thinking at the time, “Only three ways? That’s too simple. It can’t possibly be right.” But I’ve thought about it at least a hundred times in all the years that followed, in countless brainstorming sessions on that very topic, and I never discovered another way.

This particular bit of advice has been very useful to me whenever I was starting a new business about which I had no significant experience. It has also been helpful when I’ve been consulting with entrepreneurs looking for ways to grow their new businesses.

So why doesn’t every entrepreneur take advantage of these revenue-building strategies? Because, as easy as they are to implement, most entrepreneurs aren’t even aware that they exist.

In future issues, I’ll give you some examples of how you can put each of these strategies to work for you to see your revenues double, triple, or even quadruple in a surprisingly short amount of time.

Three Universal Marketing Truths 

1. The customer most likely to buy a product or service is one who has bought similar products or services in the past.

2. The best time to make that second sale is soon after or in some cases immediately after the customer made his first purchase.

3. To achieve the highest percentage of conversions on that second sale, price the second product at two to three times greater than the price the customer paid for the first one.

When a recent visitor to Paradise Palms wrote to the website asking if she could book a big event there, my reaction was, “Hell, yes!” The garden is amazing. I have zero doubt that anyone who had an event there would be anything less than thrilled – and it would help pay for the $600,000 a year it costs in upkeep.

Then came another opinion: “We are not ready to handle big events. We need a professional event organizer at the very least. We’ve discussed this with you before. We’ve outlined the problems.”

It reminded me of a course I took in “leadership styles.” We learned that some people are directors, some people are analysts, some people are counselors, and some people are communicators.

I’m a director. And the greatest pleasure directors get from their work comes from seeing the work get done.

The person that disagreed with me is an analyst. And the greatest pleasure analysts get from their work comes from solving problems, getting the machine running smoothly, and making workers happy.

Both personalities are important to a new business. But because analysts spend so much time trying to fix problems they foresee before the business even gets launched, nothing gets done unless a director is in charge.

I wrote a book about starting and building multimillion-dollar businesses: Ready, Fire, Aim. It was a bestseller. And it continues to generate at least one email a week from folks who have used it as an instruction manual.

In Ready Fire Aim, I laid out my thesis that there are four stages of development and that every stage has one primary challenge and one primary opportunity. In Stage One (the stage we are in with Paradise Palms), the challenge is initiating positive cash flow before you run out of money, ideas, faith, and endurance. The opportunity (the way to solve the problem) is to discover what I call the OSS (Optimum Selling Strategy).

Here’s the thing: You will never know if your business idea works until you are making sales and bringing in new customers. And even then, you are working against two timeclocks: One is about how much capital you have to spend before you are cash positive. The other is about how much faith and energy you have to keep going.

And here’s the question: Do I have what it takes for Paradise Palms?

Robert Frank, a columnist for The New York Times, has argued for some time that the key difference between the “haves” and the “have nots” in this country is not talent, hard work, and persistence but luck.

That sort of analysis sticks in my craw for two reasons: It is born from jealousy. It is absolutely not true.

It is true that many highly successful people, when asked for the secret to their success, cite luck as the reason. As I’ve said many times in previous essays, this is ingenuous. One need only read their autobiographies (or biographies written about them) or speak to anyone who has worked for them to know that it was a combination of personal strengths and disciplined habits.

They default to luck as an explanation for two reasons: Because it makes them seem modest and therefore likeable. And because when one looks back on a successful career, it often seems like it was a matter of luck.

In my case, it never seemed like luck. It seemed much more like decades of difficult challenges, frequent heart-crushing mistakes, and countless 12-hour days.

Alex Green (see today’s main essay, above), recently wrote about Dr. Bob Rotella, a leading sports psychologist whose views are diametrically opposed to Robert Frank’s, and summarized some of Rotella’s most important findings from his book How Champions Think:

No. 1: Intense Optimism – It’s tough to achieve great goals without an unwavering conviction that you will achieve them. Exceptional people generally do this through intense, purposeful visualization. Optimism keeps them juiced, excited about their prospects and willing to work harder than others. Optimism alone doesn’t guarantee anything, of course. But it is an essential ingredient. There is an almost perfect correlation between negative thinking and failure.

No. 2: A Confident Self-Image – We all construct a mental picture of ourselves. To a great extent, that self-image determines what we become in life. Champions view themselves as winners. And they devote their lives to making that image a reality.

No. 3: Habits of Excellence – Exceptional people follow strict habits that make success almost inevitable. Commitments are a dime a dozen. But unwavering perseverance is a virtue in short supply.

No. 4: An Unwavering Commitment to Process – Exceptional people don’t just pursue a dream. They fall in love with the process that makes it come true. They don’t just work longer and harder. They work smarter.

No. 5: Single-Mindedness – Champions don’t generally live well-rounded lives. They know they cannot be great business leaders, great parents, great athletes, great socializers, and tireless contributors to their communities. They have a passion for one thing and pursue it with the zeal of the newly converted.

No. 6: Honest Evaluation – Many people set high standards for themselves. But then they go easy on the self-evaluations. Average achievers tend to overestimate how hard they work. Champions don’t. They define excellence in specific terms and commit themselves to the most rigorous standards.

No. 7: Resilience – Failure is inevitable in business and in life. But exceptional people don’t let it define them. They find something to cling to, some hope for the future. Each setback comes with some lesson to be learned.

“Thank you for Ready, Fire, Aim!” 

“I wanted to personally thank you for writing Ready, Fire, Aim. It’s one of the few books that’s truly shaped how I think and operate as an entrepreneur. I’ve bought at least 10 copies over the years to share with friends and team members, and I reread it every quarter. It’s become something of a compass for me.

“Your ability to distill complex entrepreneurial stages into such actionable insight has had a lasting impact on my business and mindset. It’s rare to find a book that stays relevant at every stage of growth, but yours does exactly that.” – JC