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The Millionaire Mentality -- according to J. Paul Getty
As I've mentioned before, I believe in learning from those who have succeeded. When it comes to profits, I study the writings of those who are great successes.
J. Paul Getty was one of those. He made big money in oil exploration, and made another fortune in art collection and evaluation. In the mid-1960s, he published a book which was a collection of essays, called "How To Be Rich."
Here's one of Getty's pieces of advice…. On how to achieve the Millionaire Mentality.
Getty says that he believes that most people fall into one of four general categories….
1. Those people who work best when they are working for themselves. They don't want to be employed by anyone, and want complete independence. The don't care for the security that they get from a salaried job. Instead, they want to create their own security on their own, and keep their own future in their own hands. In short, they want to be their own bosses, and take the responsibilities and risks which is associated with this.
2. Those people who for whatever reason, don't want to go into business for themselves, but work best when they are employed by others and share in the profits of the business. In this category you'll find the top-flight salespeople, who like to earn a commission for everything they sell, to some of the world's top executives.
3. Those who only want to be salaried employees, who work best when they are employed by others and they enjoy the security of a good salary. They are content with receiving a regular salary with the hope of the occasional raise. According to Getty, they don't have the initiative and independence, and maybe also the self-confidence, of those on the first two groups.
4. Those who work for others but who have a consistently negative attitude towards their jobs and employers. Their motivation is low. Their work could in fact even be a drain on the businesses they are working for.
I think Getty is probably right, and you probably can divide people into these general four categories…. In the small business world, everyone talks about person of type number 1. But there is nothing wrong if you fit into one of the other categories (well, except perhaps category number 4, which isn't a very flattering category).
This gets back to what Gordon Alexander is constantly saying…. What do you want? What do you enjoy?
Getty then starts to talk about what he calls the "Millionaire Mentality." Here's what he says…..
"Like it or not, there is a thing that can be called The Millionaire Mentality. There is a frame of mind which puts an individual a long way ahead on the road to success. In short, The Millionaire Mentality is one which is always and above all cost-conscious and profit-minded. It is most likely to be found among men in the first two categories I have cited."
How to be Rich by J. Paul Getty, p. 41
There's the concept, floating around in Getty's time, and still floating around today, which says "You have to think BIG to make a profit." Getty says that no other concept has been more widely misinterpreted.
YES - you must have imagination. You have to be farsighted. You must have dreams. You have to be willing (according to Getty) to spend and risk money (OR your time - I would add). BUT only when the expenditure is justified, and the risk is carefully calculated and you can see it's worth it.
About this, Getty says….
"In my opinion, it's more important for the man with The Millionaire Mentality to be able to think small than to think big - in the sense that he gives meticulous attention to even the smallest details and misses no opportunity to reduce costs in his own or his employer's business."
How to be Rich by J. Paul Getty, p. 43.
Essentially, according to Getty, you HAVE to be profit-conscious. That means doing things like keeping to a budget. You can't just spend with an open-hand on anything you fancy. That's a big mistake some people make in business (and it's something I have to watch myself)….
I once read a story about a group of people who decided to start a consulting company. The first thing they did was rent out an office in the expensive part of town. They furnished their office with the most costly furniture. They had the highest quality custom-made curtains, the most fashionable mahogany desks, the most expensive plush carpet. It was a wonderful place to work - they spent a lot of money making sure it was so. The only problem - they had no customers. They went bankrupt in just a few months.
In some ways, Getty took his penny-pinching to its extreme in his personal life, and I wouldn't recommend that. But in your business, it's good to keep an eye on costs, and be conscious of where profits can be increased, and costs reduced without affecting those profits.
So if someone asked him advice on how to make money, this is the way that Getty would reply. Now, how can you use it yourself?
Re: The Millionaire Mentality -- according to J. Paul Getty
> I once read a story about a group of people
> who decided to start a consulting company.
> The first thing they did was rent out an
> office in the expensive part of town. They
> furnished their office with the most costly
> furniture. They had the highest quality
> custom-made curtains, the most fashionable
> mahogany desks, the most expensive plush
> carpet. It was a wonderful place to work -
> they spent a lot of money making sure it was
> so. The only problem - they had no
> customers. They went bankrupt in just a few
BOO.COM make those guys look frugal...lashed out the cash - about £200 million..flew first class...5 star hotels...and disappeared!
At least they went out in style.
Living it up.... until a few months later....
> BOO.COM make those guys look frugal...lashed
> out the cash - about £200 million..flew
> first class...5 star hotels...and
> At least they went out in style.
I guess if you're determined to go, perhaps it's good to go with a big splash!
I know you CAN make money without your own, and that's if you have venture capital funding behind you.... I know two people personally (one of them is quite a good friend) who have co-founded companies with VC funding, but I think it's not easy to get.
I bet that the Boo.com people weren't spending their "own" money, but the money of their financiers.... Instead of turning it into more money, as if by magic it disappeared!
I'm glad you could share that insight, Jim!
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