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Friday
Nov122010

get ya money making boots on #2

In this series I am looking at the idea that there is such a thing as a 'wealth creating' personality. It's a nice idea, especially when the man who originated it, A.E. van Vogt, also provided a method for getting this personality.

His belief, which is worth considering, is that there are 12 traits shared by all wealthy people. If you want to be rich(er) it pays to develop these traits. In the previous piece we looked at trait No. 1: don’t be a victim.

In this article we’ll look at:

2. Giving yourself a task you take seriously that makes money.

3. Looking for where the profit is- in any activity.

4. Maintaining a high energy level.

5. Being good at ‘human mathematics’.

6. Becoming realistically competitive.

 

Giving yourself a task you take seriously that makes money.

Lots of people can only do things when they are told by others within a work type situation to do them. A man employed to keep a factory floor clean will do it meticulously- but his own house will be dirty. Others can work as an accountant in a company but could not conceive of doing the same work for their own profit. A journalist can write 3000 words a day for his newspaper- but do nothing if it's for a book that he plans to sell off his own bat. If you can’t motivate yourself with the thought of making money unless you’re told by another to get moving then you better stay in employment type situations.

How much of a ‘self starter’ are you? And in what areas? Maybe you can start a club or group but are fearful of turning that into a business?

Some generals wait for orders. Others- Alexander the Great and Napoleon- gave themselves orders. How much of a little Napoleon are you? Come on- let it out!

You have to start somewhere. Van Vogt talks about ‘moving up the assignment ladder’. Give yourself a small task that makes some money and achieve it. In our travel/adventure business the explorer school we started by asking our friends to come out with us on desert trips. They contributed expenses. Then we did longer trips and got people to pay.

What’s the biggest task you can give yourself that you KNOW you can achieve? I don’t mean just saying “I could sail round the world singlehanded…if I wanted to”, I mean find your own level of ‘self-task giving and accepting’. You might be surprised at how low it is. You might find you always have to get a kick up the backside from above to get it moving. Many writers only do books if there is a commission. But really this is a weak position. You’re going to have to write the book anyay so why not now? Why wait for some guy ‘above’ to give you permission.

In some ways this is all about NOT asking permission to do what you want to do. Just do it. We live in a culture where we are conditioned to ‘ask permission’. One needs to observe this and work against it.

 

Looking for where the profit is- in any activity.

When you think of buying a boat do you compute how much you can resell it for, whether you can charter it out and what it's going to cost you in mooring fees each year? If you do then you have a built in ‘profit sensor’. 

Keeping an eye on where the money comes from and where it goes is a basic skill of any entrepeneur. Forget balance sheets and losing money for the first few years: a business should look good from the word go. There are exceptions but then four out of five businesses fail- and it’s the longshots that fail.

But all of this is theory unless you can CHARGE a profit. A while ago I bought a Toyota 4x4 for exploring the desert. I bought it off a young very successful Egyptian businessman. He had bought it for, my guess, half of what he sold it to me for. He had fixed the gearbox, added fat tyres and a special gastank, and repositioned it as a ‘desert car’ rather than just ‘an old 4x4’. He told me he’d only sell to ‘people who got the desert’. In other words people like me who knew that such cars were hard to come by. Which was true. It’s like the amateur rejecting a real diamond in a junk shop as glass whereas the professional knows its true value. He was looking for ‘pros’ (and flattering them in the process). But as soon as I bought that car- which was excellent in most every way- I started to think I could sell it for ‘just about what I got it for’. In other words I had no built in profit instinct. I felt bad about taking my profit. The same guy advised me to sell a satphone I had ‘because they’re hot now’. Even though the thing didn’t work. Let them fix it was his answer.

Some people feel guilty charging a profit. If that’s you then you need to con yourself a little by saying “this is for all the effort I put in learning this trade” like Whistler, justifying his high prices, saying of his painting, “A half hour to paint but a lifetime of preparation”.

Often when good people start a shop they charge too little. People love it but they make no money. But if people really want your stuff they’ll pay a high price if it really is good.

My way round this is to add value. Whatever you sell on, even if you are merely cleaning it, you are adding value and therefore deserve your profit.

People who keep costs low feel they must pass this on to the buyer. Up to a point Lord Copper! Either way, you need to be able to see the absolute right to a profit all traders require.


Maintaining a high energy level.

You hear this a lot and it used to confuse me. I thought being physically active equated with a high energy level. But then I met several top athletes, who, when they weren’t playing sports drank beer or slept. Not exactly ‘high energy’. Then there is the type you meet who is physically lazy but will work all day and night meeting people and working at a computer.

The kind of energy we mean here is ‘doing stuff’ energy. Do you like to ‘keep busy’ or do you prefer to ‘veg out’? If you like to keep busy maybe that’s because it keeps you cheerful.

This is the type of energy I think that counts: an upbeat, lively sort of energy, enthusiasm or the ability to become enthused about something.

What we are talking here is not just about stamina, there is also the undeniable attractiveness of someone who is energetic. People want to be around them. People want to hear them sing, read what they write. Energy, literally, makes the world go round and we instinctively avoid energy vampires and gravitate towards energisers.

So one sense of ‘having energy’ is that it attracts opportunities to you. If you work, with energy, but for free as an intern, say, then your energy will be appreciated and they’ll offer you a job.

The other sense is keeping going, keeping enthused, keeping motivated when all the rest have dropped out. Michael Phelps’ coach, Bob Bowman, has a saying, “We do the stuff other athletes aren’t wiling to do- simple as that."

But even the best enthusiast needs physical energy. Van Vogt suggests building the physical reserves through exercise and/or drinking lots of coffee. Coffee can kick start you very well but then you may find you lose momentum throughout the day. Everyone probably has to find their own personal caffeine level. Exercise definitely raises physical energy levels- as long as you do no more than two hours a day. Beyond that and you may find your mental abilities impaired by fatigue. When I dug holes for a living on building sites I didn’t do any writing when I came home- I had a beer and watched TV. When I taught at a school I still managed to write a couple of hours each day after work.

 

Being good at ‘human mathematics’.

Human mathematics boils down to this: where’s the money coming from in this situation? And how does it end up in my bank account?

I’ve had several potential book and TV program deals die with the words, “I promise you this is going to happen.” Actually when I hear the ‘p’ word now I begin to get nervous. Nothing counts until the money is in your personal bank account. Not your friend's. Not your agent's. Yours. Then it's done.

Likewise if you can’t see where the money is going to come from then you’re lacking in ‘human mathematics’. Lots of dotcom businesses failed because people didn’t know where the money was going to come from.

I once invented and marketed a product for the homebrew industry in the UK. But that business is worth in total less than £2 million sterling a year. Even if my tiny product had succeeded wildly it would still not be much of a money maker. The pond was too small.

With relative ease our company The Explorer School has made money. Why? Partly because it sells a travel product. Travel, including the daily variety, is the single biggest expenditure in the world today. Bigger than housing and food. Even a small part of an ocean is worth it.

A ‘human mathematician’ gets this. He or she won’t want to start a business selling novelty tea cosies because that market is too small. Go where the money is and get a small chunk of something big.

The second part of human mathematics is ‘game optimization.’ If a strategy works repeat it. If it fails ditch it ASAP. I used to wonder how shops in Egypt could make a profit- they seemed so chaotic. Actually they are highly efficient- at optimization. You see the stock changing way more often than in the UK or US. If a line sells- next week they have a whole shelf load. They put out lots of test examples and see what works- then they concentrate on the winners and ditch the slow sellers. If you are too attached to your product you can’t do this. You’re deficient in ‘game optimization.’

One nice line here is Steve Pavlina’s ‘Ready, Fire, Aim’. In fact this is how snipers work in reality. They ‘get their aim in’ by firing a few shots at the same range as the target, or even at the target itself. That way they get an idea of wind and air pressure experientially rather than theoretically. Then they take the shot that counts. Ready, Fire, Aim is all about taking note of feedback, adjusting and optimizing.

When you make a campfire as long as the smoke is increasing it will eventually catch even if there is no flame. Well done- you've succeeded- now go and find even more firewood to make it flame higher- when it eventually catches, which it will. But if the smoke is decreasing that fire is going out. Likewise with any activity that makes money- as long as something is increasing then this is a sign of eventual success- concentrate on that thing rather than the ‘fires where the smoke is dwindling.’

 

Becoming realistically competitive

Some soccer players dive to get freekicks and penalties. It’s ‘cheating’ but it can win games. Football is played for money so you could say these guys are simply ‘increasing their competitive edge’. Any diver will tell you that he’s prepared to take the consequences such as being sent off, so that makes it alright- in his mind. Whatever the moral aspect the fact remains: people set their own limits to how much they will do ‘to compete’.

Recall Bob Bowman, “We do what other people are not prepared to do.” Phelps swam harder and longer in training than anyone else- and it paid off. The size fifteen feet helped a little too, but you get the picture. I meet people who ‘want to write’ but won’t give up the salary of a job, time sent watching sports on TV, holiday time at the beach, 9 hours rest. They won’t make the sacrifices you have to make to get in the competition starting gates.

You have to realise what level you’ll need to compete at in the game or business you choose. I once met a world jet boat champion who told me, “When the boats go 100mph then you have to go 100mph too.” You have to be up to what the job demands. And if you can work longer, harder, better than others in the same game then you’ll make serious headway.

Van Vogt talks about the perils of ‘labeling’. Once you label yourself a whole lot of expectations come with that label. Call yourself ‘college professor’ and you’ll find yourself saying, “But I just DON’T repair old TVs for money”. I found that once I stopped labelling myself ‘literary writer’ I started being far more productive because ‘literary writer’ is a label that includes spending years tormenting yourself with writer’s block and other ailments that more commercial writers mysteriously suffer from far less.

Label yourself ‘specialist’ and you’ll find your mind automatically closing itself to lots of great money making ideas. After all – your label tells you to download expertise and that’s that.

Be polymathic, avoid any label except, perhaps, entrepeneur, money maker, potential or actual millionaire.

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