How to Get Rich

by Felix Dennis

Having a great idea is simply not enough. The eventual goal is vastly more important than any idea. It is how ideas are implemented that counts in the long run.

There is another side to the subject of ideas in commerce. Stealing them. Or to put it more pleasantly, emulating them. The error of failing to emulate a winning idea pervades every industry at all levels. Mainly this is due either to indolence or to folly. Of indolence, no more need be said. The folly, on the other hand, often takes the shape of a peculiar affliction, known colloquially as the ‘it wasn’t invented here’ syndrome. I would place this affliction very high on the list of reasons preventing individuals and companies from achieving major success.

Why people should be loath to emulate success is a matter for psychologists. The fact that they do is a matter of fact. The result of such ostrich-like behaviour can be catastrophic. As I discovered to my cost.

If you want to be rich, then watch your rivals closely and never be ashamed to emulate a winning strategy.

They may josh you a little for doing it, but that’s a price well worth paying.

The problem with the great idea is that it concentrates the mind on the idea itself. This is fine as far as it goes. But unless the idea is executed efficiently and with panache and originality, then it doesn’t matter how great the idea is, the enterprise will fail. Ideas are certainly of immense importance, but I have seen so many people attempting to create a start-up company become obsessed with proving that t...

If you never have a single great idea in your life, but become skilled in executing the great ideas of others, you can succeed beyond your wildest dreams. Seek them out and make them work. They do not have to be your ideas. Execution is all in this regard.

If, on the other hand, you spend your days thinking up and developing in your mind this great idea or that, you are unlikely to get rich. Although you are likely to make many others rich. That is usually the way of it. Ideas don’t make you rich. The correct execution of ideas does.

As to the fifth method of acquiring capital – earning it – this is a long-term game plan, although it is true that if you can demonstrate the ability to earn money early on, it does become somewhat easier to borrow from others successfully later.

For the majority of people who start with nothing and seek to be rich, borrowing money in one form or another becomes a necessity sooner or later. Let’s explore the various options on the borrowing front.

Firstly, avoid sharks like ...

The interest rates on credit cards or similar instruments are beyond the capacity of nearly any legal business to sustain, and while bankruptcy laws have become more generous to creditors in recent years, a history of bankruptcy will plague and hinder you when you seek to return to the fray. There are other predators in the sea, too, but nearly all of them demand punitive rates of interest. Anyone who has borne the burden of a loan that sucks the lifeblood from you week after week, month after month, leaving you exhausted and no further forward than when you started, will tell you what a terrible price such borrowings exact from the human spirit. Better to labour as a wage slave than as a beast of burden to a loan shark.

Venture capital companies are one way to raise capital, for sure. But the price they demand is nearly always that you hand over a huge chunk of equity. More often than not, they also insist on a date by which your new venture must be sold, either back to yourself or to outsiders. Why? Because their own funds usually come from wealthy individuals who demand a high return within a limited time frame. This, in turn, leads many venture capitalists to move from an advisory to an operational role in any business in which they invest, cramping your style and scaring the pants out of everyone who works for you. Those wealthy investors in their own funds are unforgiving and merciless, and venture capitalists will therefore do anything it takes to protect and maximise short-term returns from your business.

They aren’t so much sharks as dolphins – a nickname deriving from their frantic desire to ‘flip’ every deal as quickly as possible.

If you fail to grow your businesses swiftly enough, then flipper becomes agitated and noses in. His very survival (or at least his annual bonus) depends upon your performance that year. Flipper doesn’t care about long-term prospects. He doesn’t even care about long-term shareholder value. He only cares about growth – and he cares about it now. As with his co-denizen of the deep, the shark, he either keeps moving forward or he drowns – and you have no choice but to move forward or drown with him. Except it will not be his corpse spiralling down into the depths if things go wrong. He will live to fight another day. You, on the other hand, will be shark bait.

I have been approached by venture capitalists on many occasions. They are not evil men and women; far from it. They are mostly smart, well connected, persuasive and passionate about success. But their first loyalty is to the quick buck.

Having avoided the sharks and perhaps swum with the dolphins, we turn to the fishes. How I love the fishes! How you will learn to love them, too! It was via the fishes that I made my own first money – the seed capital which ensured that I retained control and ownership of my own business back in the early days of Dennis Publishing. Fishes come in all shapes and sizes. Friends, acquaintances, relatives, business colleagues, small investors, friendly bank managers of the old school, professional advisors, ex-employers, suppliers and vendors are among them. But how can they be of any use? Let me illustrate by my own example. In 1972 I persuaded a jolly young lawyer I had met to act for me. His name was Bernie Simons. I had no money to pay him, but perhaps my chutzpah amused him. He helped me to register my £100 limited-liability company and provided me with at least a figleaf of respectability. I think I paid him £20 for his services. The company was called H. Bunch Associates and I intended to publish a series of comic books. Next, I persuaded a close friend, Dick Pountain, to join me as co-director and production manager. There wasn’t much in the way of a salary on offer, but Dick came all the same. We ‘liberated’ a few sticks of office furniture, two electric typewriters and a floor camera from the offices of OZ magazine (where Dick and I had met), which was then in the process of winding up.

Next, a close friend and colleague, Richard Adams, designed some smart headed notepaper for us free of charge, suspecting (rightly) that we might be able to provide him with work if our venture succeeded. A small printer I had come to know while working for OZ magazine agreed to print this notepaper, knowing full well I could not pay him for it right then.

A semi-friendly, amused bank manager at Barclays Bank in Tottenham Court Road opened an account for the company, into which I deposited the mighty sum of £50. A magazine distributor, Moore-Harness, with whom OZ had done business, agreed to distribute my product, although I had nothing to show them. All we needed now was content for our comic, and a printer to print it. The content was not a problem. We knew plenty of comic illustrators and they would not expect to be paid in advance. Indeed, some of them would not expect to be paid at all, and were surprised when we eventually managed to do so. The printing was the big stumbling block, of course. Somehow, I had to persuade a printer to provide machine time and paper to produce the comic we were busy preparing in the garret. The bill would come to a few thousand pounds.

I asked Brian Moore and Charlie Harness, the owners of my potential distributors for the comic, to write to a particular printer, promising that he would be the first to receive money from Moore-Harness when the comic came out. Brian and Charlie did not guarantee the money; they were not exactly idiots. But they made it sound, as a matter of common sense, that at least enough money was likely to be generated by sales of the comic to pay the print and paper bill.

Business must have been slow, because the printer agreed to Moore-Harness’s proposal. I secretly suspect that he did so as much to keep me from constantly badgering him as anything else.

Persistence is a powerful tool in the hands of a hungry young hustler on the make.

Thus it was that the first issue of Cozmic Comics was unleashed upon an unsuspecting world. It barely made a cent, but it provided the framework for yet more publishing ventures. Within two years I had sixty thousand pounds in the bank. (That is the equivalent of half a million pounds today.) The printers were paid. The contributors were paid. The designers were paid. The landlord was paid. Bernie Simons got paid. Even Dick and I were paid. Above all, I retained control of the company. A company I still own 100 per cent of thirty years later. I had created capital by swimming with the fishes.

Without Dick’s expertise, or the kindness of a lawyer, or the trust of contributors and designers, or the amused tolerance of my distributors, or any of a hundred other encouragements from those around me, it simply could not have been done. I have read, in articles written about me since in newspapers and magazines, that fierce loyalty to old friends and colleagues is my best characteristic. I believe that to be so. But having read all of the above, can anyone wonder why?

Some will argue that what I did back in 1972 could not be emulated today. But human nature does not change and, at bo...

Many people are indulgent towards the young – after all, we were all once young ourselves. Those who wish to start a company and get rich cannot expect a free ride. But they might be surprised at the number of fishes in their pa...

And look at the consequences in my own case: Moore-Harness continued to distribute my magazines. When Brian and Charlie were forced to sell their company years later, I fought hard to ensure fair treatment for its two founders. By that time, I was in a position to return their original favour. Dick Pountain is still a director of Dennis Publishing and the company has put food on his table for more than thirty years. Our landlord was happy to sell me the building in which our garret was located decades later when he retired. The printer went on printing for us until the day he sold up. As far as Dick and I were concerned, we owed him. I continued to bank with Barclays for far longer than I should have done, solely from a sense of misplaced loyalty. Richard Adams still designs projects for me. And guess what? My legal advisors in the UK today are a firm named Simons, Muirhead & Burton, founded by none oth...

Venture capitalists, major investors and bankers all have their part to play in providing capital for individuals and start-up companies. But if it is at all possible, give me the fish over the sharks and dolphins every time. It may take a mite longer to get there, but you’ll be far richer, or at the very least, happier, in the long run.

One last word on obtaining capital. It’s the worst part of the whole business of getting rich. Nothing is more humiliating or debilitating than trudging the rounds with your hand out, no matter how good your project or fierce your determination. Everyone has to do it and everyone hates it. For a self-made man or woman there is no avoiding it. Beware of anyone who tells you that there are short cuts to obtaining even a small amount of capital. Outside of family and friends, there are none that I ever heard of.

Look on the bright side. Those lazy bastards who turn away from this odious task are going to be your employees. They are going to make you rich. In a sense, this exhausting and miserable sear...

NEVER GIVE IN Never give in! Never give in! Never, never, never, never – in nothing great or small, large or petty. Never give in, except to convictions of honour and good sense. WINSTON CHURCHILL

If you happen to read biographies, as I do (scores of them every year), you will find a thread that runs through almost any story of success against the odds. Whether money comes into it or not. Whether the person succeeded or failed. Or even, most sadly of all, when they did succeed, but did not live long enough to learn of their success. In one of the finest such books in the world, Letters to My Brother by the artist Vincent van Gogh, collected and published long after his death, you will find unbearable heartbreak, madness, rejection, hunger, passion, nightmare terrors and a tale of a man who never gave in. Who would not give in, though it cost him his life. Van Gogh’s obsessions and talents drove him mad. And he knew it. They goaded and scourged him. He said himself that he had given his life and half his sanity to his art. There was only one shining star of kindliness in his universe. His brother, Theo. Theo, despite the sensible entreaties of his sensible wife (who could scarcely abide, let alone understand, her husband’s wastrel brother), kept sending what little he could afford for Vincent to purchase brushes, canvas and paint. These acts of charity, which Theo could not easily afford and which grieved Vincent to receive, changed the course of the history of art. Because Vincent often had no money. None at all. He would sell his paintings to peasants or inn-keepers in exchange for food and board. Canvases that would later sell for tens of millions of dollars were ...

All error springs from flawed assumptions. If there are no assumptions, there can be no error.

I am told that during the Vietnam War, a sign was kept nailed on a wall above a particular marine commander’s desk which said:

‘Assumption is the mother of all f***-ups’. Those seven words should be carved into the heart of every entrepreneur, the wealthy or the wannabe, ...

Wishing for or desiring something is futile without an inner compulsion to achieve it.

Such lack of compulsion, if not frankly acknowledged, can lead to great personal unhappiness. We have all met deeply unhappy souls muddling along in professions or careers for which they are patently unsuited. Worse still, by continually wishing and never delivering, you risk denting your confidence, beginning a vicious downward spiral that appears to draw misfortune like a magnet. The assumption that you might be able to achieve some goal if you only wished hard enough is not just a f***-up. It’s a potential personal tragedy. Life is not some kind of rehearsal. Why, then, do so many people punish themselves in this way? The answer, in almost every case, is that they were ‘persuaded’ or hectored into becoming a banker or a lawyer when, in reality, they would have preferred to do something else entirely. Their misery is made all the worse by the realisation that had they acknowledged their lack of enthusiasm early on and stuck to their guns, their lives might well have taken a far more congenial course.

It is my hope that this book will cause you to consider very carefully whether you are truly driven by inner demons to be rich. If you are not, then my earnest and heartfelt advice to you is: do not on any account make the attempt. What are riches anyway, compared to health or the peace of mind that even a modicum of contentment brin...

I ask you to quietly turn over in your mind whether or not you are fit to be rich. Whether the sacrifices involved – not only your own, but those you will ask of your family, present or future – are worth the tyranny that such ambition, by its very nature, exacts.

Never yet have I met a self-made rich man or woman whose family or personal relationships were not plagued by the burden of creating a fortune, even a small fortune. A rocky marriage; lack of time spent with their children; the substitution of expensive gifts to repress guilt created by their frequent absences from home; the concern that their children have grown used to privilege and are consequently slacking in their education or lacking in ambition – all of these come as part and parcel of self-made wealth.

Do not mistake desire for compulsion. Only you can know the song of your inner demons. Only you can know if you are willing to tread the narrow, lonely road to riches. No one else can know. No one else can tell you either to do it or to refrain from the attempt. When the going gets tough, when all seems lost, when partners and luck desert you, when bankruptcy and failure are staring you in the face, all that can sustain you is a fierce compulsion to succeed at any price.

‘Better to have tried and failed than not to have tried at all,’ drones the old saw. But in this instance, the cliché is wrong, utterly wrong. Better to have chosen a different life, a quite different path, than have placed yourself and those you love in harm’s way when early reflection and thought could have advised you differently. I repeat: do not mistake desire for compulsion. Those that do nearly always fail, at great cost to themselves and those around them.

THE SECOND ERROR: OVEROPTIMISM CONCERNING CASH FLOW

Lose control of a business by running out of cash and you are relegated to the status of minority investor or salaried employee.

Cash is a serious matter. Its management is utterly vital in any enterprise. If, like me, you have no head for figures whatever, then this is no cause for concern. You simply employ somebody who does and listen to them carefully. Lord knows, there are enough qualified bean-counters in the world and forecasting cash flow is hardly rocket science. It was only when a venture I was involved in became a publicly listed company that I bothered to ask a senior accountant to explain to me what a balance sheet really was. He was astonished. How could I have become a multi-millionaire many times over without truly understanding a balance sheet? In point of fact, he did not believe it possible at first. I explained to him that I had always left all that stuff to my finance directors and accountants – I was too busy making (and spending!) money, and had always begrudged the time it might take to grasp the finer points of formally recording its movement or current resting place.

You can improve cash flow by observing the following suggestions in a start-up’s early days: Keep payroll down to an absolute minimum. Overhead walks on two legs. Never sign long-term rent agreements or take upmarket office space. Never indulge in fancy office or reception furniture, unless your particular business demands that you make such an impression on clients. Never buy a business meal if the other side offers to. You can show off later. Pay yourself just enough to eat. Do not be shy to call customers who owe you money personally. It works. In a city, walk everywhere you can. It’s healthy and sets a good example. Check all staff travel and entertainment claims with an eagle eye. If you’re going to be late paying, call the vendor’s boss. Give a date. Stick to it. Always meet payroll, even at the expense of starving yourself that week. Issuing staff credit cards, company mobile phones or cars is the road to ruin. Leaving lights, computers, printers and copiers on overnight is just stupid. A vase of beautiful flowers in reception every week creates a better impression than £100,000 worth of fancy Italian furniture. Get used to grovelling. Grovelling is an effective tool in a start-up’s cash flow. They want your business. Play one supplier off against another. Ruthlessly. Only enter a factoring deal in absolute extremity. Exit it fast. Keep your chin up. It could be worse. You could be working for them.

Regular, even obsessive, monitoring is the key. I hated every minute of doing it in those early days, but if a bean-counting klutz like me could do it, then you can too.

THE THIRD ERROR: REINFORCING FAILURE

Reinforcing failure sounds so easy to avoid. If something fails, stop doing it and start doing something else, right? Er, right. Except, just when do you decide that you have a ‘failure’ on your hands? Too late, is the answer – always too late. Let’s examine the nature of success and failure for a moment. We know that success has a thousand fathers while failure is famously always an orphan. Not to mention a bastard.

THE FOURTH ERROR: THINKING SMALL AND ACTING BIG