7 Principles for Attaining a $500 Million Net Worth
There’s rich, and then there is super-rich. If you are rich, you stay in the nicest hotels, eat at the fanciest restaurants, and drive the trendiest cars. The super-rich own those things.
John Bowen, who founded four multi-million dollar businesses, authored more than 15 books, and is a regular columnist at HuffPo and Financial Planning, is a leading expert on the super-rich, which he defines as a net worth of $500 million or more.
These are not your everyday entrepreneurs. In fact, according to the Credit Suisse 2016 wealth report, there are less than 2,500 US citizens with a net worth of $500 million or more. With an estimated population of 322.8 million, less than 0.0008% of the population meet the requirement for the “super-rich” designation.
John recently conducted a study of elite business owners with the purpose of identifying exactly how they were able to achieve such high levels of success. Upon analyzing the results, he found seven principles that were common between these super-rich individuals. In our recent conversation, John outlined these seven principles of the super-rich. Adhere to them and maybe, just maybe, you will join the ranks of the top 0.0008%!
1 – Commitment to Extreme Wealth
The first principle was an expressed commitment to extreme wealth.
Extremely wealthy individuals share a similar mindset. They consciously decide extreme wealth is what they want to pursue. At the same time, they’re also willfully committing to the amount of work and effort required to attain the millionaire and billionaire status.
What it is not is a commitment to an abstract goal. It’s a commitment to a defined number. “What’s your number? That’s what you’re asking,” John said. “Commit to extreme wealth – just determine whatever that means to you. For some people, it’s a million dollars. For some people it’s a billion. It’s anywhere in between.”
It’s both quantifiable and personal.
2 – Enlightened Self-Interest
The super-rich knew exactly what they wanted and consciously decided it’s what they would pursue, which varies from person to person. Then, they engaged in enlightened self-interest.
Here’s how John explained enlightened self-interest: “What you want to do is you want to determine your counterparty – whoever you’re going to do the deal with, [who] you’re negotiating with, [and who] you’re partnering with. What is their criterion for success, too? And then you’re going to find that and leverage it to use it.”
Business isn’t done in a vacuum, and it is extremely difficult to become super wealthy on your own merits and work. You’ll need to work with others. And it shouldn’t be just anyone.
When the super-rich are going to do a deal with someone, John says, “I’m the first to make sure that whatever I’m doing is going to be aligned for my success criteria. Then, I’m going to try and gain a better understanding of what [they] want to accomplish. Can I help [them] advance what [they] want to achieve, and will that move me toward my success? Then I’m going to go ahead and negotiate in good faith to have that happen.”
This isn’t selfish self-interest, but enlightened self-interest. John says, “You never want to burn the counterparty, whoever you’re working with, because we’re in it for the rest of our lives. You want to make silence, and one of the things you’ll find about billionaires is they’re silent a lot. They’re letting you do a lot of the conversation, and one of the biggest risks of all is so many people negotiate with themselves. They’re going through all these mind games. What we want to do is hear from the counterparty how we can help.”
You want the “I’ll scratch your back, and you’ll scratch mine,” reciprocal relationship, not “I’m going to exploit this person to achieve my goals and then throw them to the wayside once I’ve done so.” The latter, which may seemingly work in the short-term, is a recipe for disaster in the long run.
3 – Put Yourself in a Line of Money
Principle number three is the super-rich put themselves in a line of money. “[For] people with $25 million or more of financial assets, 9 out of 10 made it being an entrepreneur (business owner),” John said, which includes real estate.
“If you’re going to be successful, you want to be successful on purpose,” John said. “If you’re going to do a nine to five job and you’re going to do it well, you can have a great life, but you’re not going to become extremely wealthy. You’re not in the line of money. Unless you have an equity ownership, you’re not in the line of money.”
If you are loyal Best Ever listener, you are either already a real estate investor or are in the process of becoming one, so you should already have this principle covered.
4 – Pay Everyone Involved
A common stereotype of the wealthy is that they are cheap with their employees and/or business partners. However, according to John’s study, this isn’t the case. The super-rich are “very deliberate on who they hire,” John said. “They work with the top talent, and they make sure they’re taken care of.”
You want to motivate and inspire your talented employees. They strive to make money and grow as entrepreneurs themselves, and good pay is a must to ensure an alignment of interests.
5 – Network is your Net Worth
The super-rich are extremely well connected. They focus on deliberately forming relationships that create value, result in economic gain and are always win-win scenarios.
Someone in a super-rich network, John said, is “somebody that I can get on the phone, and we can have a conversation and create value together in our collective, enlightened self-interest, and we’re going to maintain that relationship over time.”
More than likely, this is not your best friend, family, or college network. These are the business people that can help you reach your extreme wealth goal while you’re going to do it for them as well.
6 – Failure, Refine, and Refocus
Another characteristic of the super-rich is their acknowledgement, acceptance and recovery of failures. They don’t fail and go sulk in a corner. They fail, determine the root cause, analyze their mistakes, refocus, and try again.
Even more importantly, they are confident enough to test different strategies without fear of failing. The seek out failure.
John says, “The nice thing in today’s world [is] the cost of testing anything has gone way down, whether you’re creating products, the ability to 3D print, whether you’re doing it electronically, the Internet, buying a few ads digitally. It’s very low cost.”
“Good business people always mitigate risk – we’re not big risk takers. But what we want to do when we fail, we want to fail quickly, and then [ask] how do we avoid making the same mistake repeatedly? And more importantly, doing an autopsy so we can see ‘Is there some value here that we can capture and tweak it, refine it, [and] refocus it to create value?’”
The key takeaways for this principle are having fearless approach and when testing something, if you’re going to fail, fail quickly!
7 – Stay Focused on Extreme Wealth
The final principle may seem redundant, but that is because it’s the most important principle. The super-rich didn’t just make the initial commitment to extreme wealth and then forgot about it. It is always top of mind and something they continuously focus on.
John said, “It’s always keeping number one in place. One of the things I like to do is to take a look, from the standpoint of ‘Where are you spending your time, your money and your energy?’ because really time isn’t an [infinite] resource, it’s energy. [So] take your calendar … and look at it for a week. We can really get caught up in going ahead and thinking because we’re so busy, we’re doing well; what I find over and over again (and it’s one that I struggle with, too; and many business owners and entrepreneurs do) is it’s so easy to lose track of what’s working and get defused… And as we get defused, boy, we’re in trouble. So it’s focus, focus, FOCUS.”
Whether it’s daily affirmations, a vision board or getting your number tattooed on your face, you must consistently remind yourself of your commitment to extreme wealth and to spend your limited time and resources accordingly.
Based on a study of the super-rich, who are entrepreneurs with a net worth over $500 million, there are 7 common principles they all follow:
- Commitment to Extreme Wealth
- Enlightened Self-Interest
- In the Line of Money
- Pay Everyone Involved
- Networking like a Machine
- Failure to Refine and Refocus
- Stay Focused on Extreme Wealth
I hope to see you in the Forbes millionaire or billionaire list one day!
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