One wonders sometimes why some kids – with all the privileges they’re born with – never grow up to be billionaires out to change the world no matter how hard they try while others coming from a much more humble background get there against all odds.
What is the secret?
They say the easiest way to become a billionaire is to be born a millionaire. But if you’re starting from scratch, I think there are a few important keys.
First of all, if you’re good at math or computer programming, you have a leg up. A lot of billionaires made it in start-ups or in the hedge fund world, which means math, science, computers. Also you need to know when to take risks, and when to run away. Every billionaire out there risked everything- sometimes more than once. Also you need to figure out what you’re really good at- whether it’s art, writing, coding, whatever. Once you identify your skill, the one thing you do better than anyone else, you need to figure out how to best monetize it. Pretty much everything on earth can be turned into cash, as long as you are the best in the world at it. Believe in yourself, but always have an escape plan; if something isn’t working quit. There’s no shame in quitting something that isn’t working out.
That’s pretty much the big picture… Now you want the details?
Here are my basic tips having raised my 2 sons this way hoping it will one day pay off.
1. Make them aware of the full range of life options. Take the mystery out of the steps it takes. The world abounds with opportunity to lead whatever life you want, but you have to demystify, demystify, demystify for them to be able to discern myth from fact and make the right decision based on real information not what other people perceive reality to be.
2. Do NOT send them to public school NOR to the prep schools that are just our public schools on steroids. If you want to develop sharp minds, send them to places they are going to interact with real sharp movers and shakers with ample means at their disposal. Do not find them the job. Give them though all the tools to pitch it like no one else. Have them work professionally every summer at both corporate and entrepreneurial outfits… From the most entrepreneurial tech companies in Silicon Alley and Silicon Valley to internships on Capitol Hill and Wall Street.
3. Have them start early and if not you; get them the best mentor there is. It is a fact that Bill Gates began programming on the best computers available at least a few hours a day every day beginning around 12 years old. By the time he went to Harvard, he was already one of the top programmers in the world and that allowed him the springboard to start Microsoft. Zuckerberg has a similar story. Bezos has a similar story. Elon Musk…. you get it. Warren Buffett began with paper routes and vending machines when he was just big enough to ride a bike. Because his dad was a senator, Buffett also had the luxury of the Library of Congress, where he read almost every great investing book in print. By the time he got to be 30 years old, he had about 20 years of business chops under his belt. Try NOT being successful with that kind of experience. Carlos Slim’s dad started him out running the family’s businesses around 14 years old. Eventually, he took over. By the time he was 30, he was already a multi-millionaire because he’d been hip deep in the action for 15 years. Same basic story for Ron Perelman… same thing for a lot of the new Chinese billionaires… same thing for Mark Cuban. In addition, many of these people had a great mentor. For Buffett it was Ben Graham. For Perelman and Slim, it was their dads.
4. Teach them to either love their work or change it altogether for something they love. After you get rich you can coast some. Getting rich takes work. They will need to excel at physical work and have stamina. They will especially need to excel at mental work and be both flexible and tough.
5. Teach them to love people. The only way you get rich is by serving the real needs of others. You must have an affinity for others. My house is famous for all the people who come trooping through. My sons’ friends are welcome at any time without prior arrangement. Make sure though they understand that they are not above or below anyone else.
6. Teach them generosity. Those who would receive much must be able to give much. Teach them that the money you give people is nothing compared with the time you give them. The only real wealth is the time you have, and whenever you have a chance to use your time well for others, do it and do it fully. Giving money without time can be a way of creating distance.
7. Teach them the mental nexus. Here falls the shadow. Rational people do not become entrepreneurs. Like combat officers, one is constantly making critical decisions on partial information. One has to take steps without being able to see if there is support there. One must taste failure time and again and be inspired by it. One must be armed with a variety of rationalizations for continuing on despite doubt, buffeting, adverse opinion. Every successful new business gores someone’s ox, and those people react in nasty ways. The faces you see each day are now depending on you to make payroll. Entrepreneurs must be superhuman to deal with the tragedies they themselves can be the authors of. Trick is, you can’t teach that mental nexus if you have not lived it yourself. If you haven’t, then apprentice them to someone who has.
8. Show them life’s worst side. It is a fact that the world is full of assholes and swindlers and your kids will need a radar for it, and they need to suffer the consequences so that they develop an arsenal of techniques for dealing with it. They need to be superb judges of character. You can’t teach good behavior by isolating them from bad behavior. Let them see it all. Insulating your kids from reality will only make them naive and stupid. After all, being rich sometimes means being unpopular. A lot. Before you are rich, people will call you stupid and unrealistic. While you are climbing, people will say you won’t make it. Even after you are rich, people will still hate you because you are rich. Show them it rolls right off your back.
9. Teach them about the mistakes you have made and your failure to reach your goal. Without knowing anything about you I feel secure in saying that your first ( and biggest mistake) is setting a goal of the accumulation of wealth instead of pursuing some higher purpose or passion. As I said earlier, if you love what you do you will never work a day in your life. The love of money for money’s sake is a perversion. It’s not money , it’s what you can do with money that’s important.
10. Teach them numeracy. Anyone who can’t do math in his head on the fly is going to have a difficult time being an entrepreneur and putting deals together. Schools don’t teach this; it’s a special, long-term effort.
11. Teach them to get a grubstake. No grubstake. No billionaires. You can’t be a capitalist without capital and the willingness to put it all at risk. The sooner they know this the better and it will be worth everything.
12. Teach them that you ALWAYS have to be raising the bar. Why? Well when you have money, you have a power that is arguably one of the most powerful in human history, at least on a secular level. The money is NOT the goal, the STUFF that money gets you, is the goal. (and it’s not all about you too… think influence in charity work and community impact). The purpose of life USED to be – work to pay bills, to work some more, to pay those bills and panic when an unexpected expense comes up. That is GONE. If you are of good character, your focus turns to helping others. You see someone starving, or see a catastrophe in a faraway land and you CAN and DO help them. That is POWER.
13. Make them teen outcasts. Correlating highly with successful entrepreneurs is unfulfilled teen years. Basically, those who are dialed in by 18 stay comfortably dialed in. Another high correlation is Fs. Entrepreneurs are highly results-oriented and have little patience with those as process-oriented as teachers. Let them see it all.
14. Without being repetitive, forget about allowances and finding them jobs. Make them recognize opportunities and pitch them. Nobody ever got rich working for a living. Trading your time for money is a loser’s game. An allowance just teaches a kid to lack resourcefulness–same for teen jobs. I always played VC to my kids. They could ask for any amount of money they wanted as long as I know the plan, the purpose and the alternatives…. And if you are going to help them get job jobs, make it in sales–they won’t get far without the power to persuade, and it’s another thing they won’t learn in school.
15. Being Worthy. Finally, the most important thing is they must be worthy. No backing comes to those who lack abundant evident character. I have found the best way to fine-tune morality is to put it entirely on them. Each time a moral decision is called for, it’s “Search your heart, son. You have to build your life around what is important to you. The only way I can help you is to tell you how I screwed up sometimes. But the sooner you learn to get in touch with your own feelings of what is right and what is wrong, the better.
Bottom Line: There is only one path to getting wealthy: exploit opportunity. The whole purpose of what I’ve stated above is to equip your children with the tools to spot and build on an opportunity to add value to the world.
How will you know you’re on the right track? The vast majority of people you meet are inert. One in ten or twelve has scalar energy–they liven up the event. One in a thousand or so has vector energy–the ability to channel effort to a purpose and pull others in their wake. The only way a human being begins to become a vector force is to Find and Embrace His or Her Passion, and that can be a bit quirky.
You should be getting glimpses of that talent to pursue purpose with passion all along, but it doesn’t mature until adult years. It is such a rare thing that schools are not at all equipped to teach it. Even the best MBA programs teach you how to go to work for that guy rather than be that guy. So, if you can pull it off, you will not only have enriched your children, you will have enriched the world.
After all is said and done, money is simply a tool. It has to be put to work to accomplish anything.
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