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Principles of Wealth: #21*

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When the odds of a particular speculation are extremely long, we refer to it as gambling. And gambling, most sensible people would acknowledge, is a foolish financial activity. Unless, of course, the odds are in your favor.

It must have been 40 years ago. I was a young man, returning from my first trip to Las Vegas. The man next to me was an architect. His specialty was high-end hotel-casinos. His favorite part of the job, he told me, was designing the VIP suites. They were immense pleasure domes, featuring every imaginable luxury, including gilded furnishings and indoor pools.

“How much would one of those go for?” I naively asked.

“Oh, they never charge for those rooms. They give them away to high rollers for free.”

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Success in Life? It’s All About Micro-Culture

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There’s a longstanding nature-versus-nurture debate among social psychologists. Wrestling with it doesn’t get you very far, because it’s not a real question. Nature matters. Nurture matters. But what matters most is micro-culture.

(Micro-culture is a term that doesn’t yet exist. I’m making it up to denote the close circle of people that surround and influence you during your formative years.)

What you accomplish in life – in terms of every aspect of success, from mental health to longevity to self-satisfaction to your career – is due much more to micro-culture than to any other single factor. So why haven’t researchers figured that out?

To wit: A recent University of Minnesota study has academics scratching their heads.

Led by epidemiologist Theresa Osypuk, the study followed the lives of youngsters born into poverty in the 1990s. Some of them were given vouchers that allowed them to move out of public housing and into better neighborhoods. And what happened to the kids who made the move? The researchers found that the girls were far less likely to drink heavily than the girls left in the housing projects. But the boys binged more.

As the WSJ put it, “The findings challenged the assumption that behavioral risks increase with economic hardships and that poverty affects women and men the same way.”

How could that be?

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From My Work-in-Progress Basket

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[Note: No new essays from me this week. I’m out of town and will be busy with meetings and business functions. I won’t have time to do much writing.]

From My Work-in-Progress Basket

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[Note: No new essays from me this week. I’m out of town and will be busy with meetings and business functions. I won’t have time to do much writing.]

From My Work-in-Progress Basket

Breaking Big: The “Ready-Fire-Aim” Strategy That Took One Company From $8 Million to More Than $1 Billion 

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Tuesday, October 2, 2018
Delray Beach, FL

Introduction

In 2010, John Wiley published a book I had written several years earlier called Ready, Fire, Aim. Of the 20+ books I’ve written on business and wealth building, Ready, Fire, Aim has had the longest tail. Although it barely made it to the bestseller lists that year, it has sold conti nuously since then.

The tail was also wide. It’s been republished in more than a dozen countries, recommended by dozens of digital newsletters and magazines, and has been used in business schools, book clubs, and even churches!

My goal with Ready, Fire, Aim was to explain my theory about starting and growing entrepreneurial businesses.

My thesis was that all entrepreneurial businesses have some commonalities in terms of the challenges they face at various stages. And I argued that if you, as an entrepreneur, recognize those commonalities,  you would have a significant advantage over your competitors and a favorable chance of success.

In looking at the way businesses develop over time, I identified four levels of business growth, based on revenue:

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Can You – Should You – Value Knowledge in Dollars and Cents?

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Friday, September 28, 2018

Delray Beach, FL – I try to limit my wealth-building and business advice to what I know to be true from experience. That’s because I am skeptical of advice derived solely from thinking.

When I first began to read business books, long after I’d retired the first time, I was surprised to find that many of the bestsellers were authored by academics who had no actual experience. Their arguments were sometimes convincing. But most often they were not. They contradicted the lessons I’d learned.

As for books and speeches and essays about investing, some of them, like Warren Buffett’s advice, made great sense. And those were based on experience. The others, based on theory, were sometimes persuasive. But when I put the advice to work I was almost always disappointed.

All that is to say that I want to discuss a theoretical issue today. If you have my bias towards experience-based knowledge, this may seem like bullshit to you. But I think it’s actually very important. So here it is…

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That Was Then, This Is Now (but It’s Still About Then)

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Wednesday, September 26, 2018

Delray Beach, FL – South Side High School’s Class of 1968 had its 50th-year reunion last weekend. About 75 of the 300 students in our class attended.

I wasn’t going to go. Then I decided to do it, but feared it would be an emotional disaster.

South Side High had a very stratified social order. At the top were the Chosen – affluent kids that arrived at school well dressed and confident. They came from good families, lived in beautiful homes, and dominated the school’s academic and social functions.

Below them were the Disposables – kids that came to school rudely dressed, emotionally unpredictable, and financially embarrassed. They (we) came from good to not-so-good families, lived in modest homes, and starred in sports but played secondary roles in every other school activity.

Finally, there were the Invisibles, representing perhaps 50 of the 300. Mostly minorities, they dressed better than the Disposables, lived in the projects, and, like the Disposables, had little interaction with school activities. (Except for sports.)

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