09.18.22 - How to get super rich
09.18.22 - How to get super rich
Notes from one of my favorite books
One of my favorite books of all time is called ‘The Narrow Road’ by Felix Dennis. This is not his most popular book (that would be “How to Get Rich,” a cringe-worthy name but packed with gold nonetheless).
If you want to grab my Narrow Road notes, I’ve posted them below. In addition, let’s go through a few takeaways from Felix in general (from multiple books) to kickstart your week.
"You’re an entrepreneur. Your companies are not your “babies,” they are tools for acquiring wealth. Try to sell them before they peak. Buyers require what is called “blue sky” (further growth) to get excited and offer a great price." -Felix Dennis
I want to highlight two specific points from this:
Exit before you’re ready
Treat your business like a tool, not a crutch for your identity
Point #1 is relatively easy to understand. Last year I put two of my companies into a holding co and got them independently (and professionally) appraised. The holding co came back at $70 million valuation.
I decided not to sell them… I thought, “I can grow them some more and crack $100M.” But inside, I was bored… the businesses are worth nowhere near the $70M valuation, let alone the $100M target.
Why?
That’s a complex answer, but the short version is: “I was bored.”
It’s hard to build something when you are bored. The businesses PEAKED and the real reason I did not want to sell is because I knew I needed to get them headed for a new peak…
The best time to exit something is likely before you feel ready to exit — that’s when the runway is enticing enough for a buyer to come in and capture the upside. I’ve sold off a handful of equity stakes in the low 7 figure range, they are not complex. Anything approaching 9 figures becomes a game of runway…
“How much runway is in this business that can justify the risk of purchase?”
Here are some further thoughts on this:
The second point is more complicated:
Treat Your Business Like a Tool
It can be difficult to not fall in love with your inventions. Next month, around the first of October, my offices will be shipping the October Memo and inside we discuss 9 ways to scale a coaching, consulting, expert/education based organization…
But one of the interesting factors in the issue (which you should subscribe to immediately) is how to think about your business properly, so that it accrues actual wealth for you…
A business does not make you wealthy.
A business, properly track & managed, can make you enormously wealthy. The difference starts in the mind and your decisions simply reflect your maturity of thinking.
I can immediately tell when someone has become too intimate with their business. If the business is doing well, they feel great about themselves. If the business is slogging through some sh*t, they believe that THEY are sh*t.
This is an extremely unhealthy place to be. It reveals cracks in your identity that WILL catch up to you, eventually.
A business is a collection of systems. One of my coaches delineates between “systems” failure and “personal” failure. When examining failure, do you “default” or instinctively think, “What is wrong with this system?”
Or, “What is wrong with ME?”
In closing, I am reminded of this quote from the founder of IBM:
"The formula for success is simple: double your rate of failure." "Thomas J Watson
There is no sustainable way to do this if you view failure as a PERSONAL failure. You must learn to outwit the system, placing both the blame & the responsibility on the system you are building.
Once you learn this, your ability to fail then keep going improves dramatically.
This is great. I've learned more about business building from your content lately than ever before.
I read "How to Get Rich", but had never heard of "The Narrow Road" before your recommendation. About halfway through now. Great book.