Getting Wealthy One Decimal Point at a Time

I traveled back from the outstanding Stansberry Alliance conference yesterday and will give you a full report on that next week—it was a great conference and I have lots to share with you!

Today, though, I want to share an essay with you from one of my personal kung fu wealth-building masters, Mark Ford.

Mark is a self-made multi-millionaire and an excellent writer to boot. We share the same “no-nonsense” approach to wealth-building and I always find his essays insightful, honest, and of course, beautifully written.

I particularly love this essay as it underscores a point I make often here on Kung Fu Finance…that wealth-building and “getting rich” are certainly possible, but must be achieved one step at a time.

Mark is a true wealth-building master and understands the concept of “mastery” (vs. the “buy this one stock and get rich quick!” mentality that tends to permeate the wealth-building industry).

I hope you enjoy his essay as much as I did…please let me know what you think in the comments!

To your financial success,

— Kung Fu Girl

Mark FordGetting Wealthy One Decimal Point at a Time
By Mark Morgan Ford

This essay is only for some of my readers. I’m thinking of readers who want to become really, really rich. Like, billion-dollar rich.

Be warned: If you are in that category, you may be disappointed by what I’m about to say. But you should read it with an open mind. Because what I am going to tell you is the only possible way to increase your wealth in any serious way.

I’ve had the following conversation more times than I would care to remember:

Aspiring Billionaire: I need you to help me.

Me: What can I do?

Aspiring Billionaire: I want to grow rich!

Me: Okay. Have you read any of my books?

Aspiring Billionaire: Yes, but they are about becoming a millionaire. I want to become a billionaire!

Me: You do? That’s interesting. Why?

Aspiring Billionaire: There’s no point in becoming a millionaire any more. It doesn’t cut it. I want to become a billionaire!

Me: That’s too bad.

Aspiring Billionaire: Why do you say that?

Me: For one thing, it’s a very silly goal.

Aspiring Billionaire: Anything the mind can conceive and believe it can achieve!

Me: I can conceive being an NBA player, but I know I can’t achieve it.

Aspiring Billionaire: That’s because you don’t believe it!

Me: You are such a dork. And would you stop ending your sentences in exclamation points?

Aspiring Billionaire: You are making fun of me.

Me: Yes.

The truth is that even if I took these guys seriously, I couldn’t help them. You see, I don’t know how to make billions. And I’m not sure anyone does.

Every year, we read stories about clever young people who create online businesses that they sell for a billion dollars or more. There aren’t many such stories, but they are so dramatic that they seem to be ubiquitous.

When I was starting out, my wealthy role models were early 20th-century industrialists like John D. Rockefeller, Henry Ford, and John Paul Getty. These guys became very wealthy by working long and hard for decades, building huge companies that dominated their markets.

They didn’t acquire their fortunes by coming up with a single clever concept and then selling it to a public company for stock.

I consider myself fortunate to have had those people—and not the Mark Cubans of today—as role models. Why? Because the chances of becoming a billionaire this “new” way is about the same as the chances of becoming a professional sports star. One in a million.

So when people tell me that they are not interested in making millions, what they are really saying is that they are not interested in reality. They want to amuse themselves with highly improbable fantasies about becoming rich.

The truth is this: It takes a lot of effort to become rich. And it takes time.

It took me about four years of concentrated effort to become a millionaire and another seven years to acquire a net worth of $10 million-plus.

But even then, 20 years ago, I still didn’t know how to make millions. I was adding to my wealth in $100,000 increments.

And that experience led me to the following conclusion. If you want to become rich, you must give up the idea of becoming a billionaire. You must start from where you are and gradually learn to make greater sums of money one decimal point at a time.

In 1982, when I first decided to become rich, I was making $35,000 per year. I already had plenty of experience in business, but almost all of my businesses had been service businesses that billed in increments of hundreds or thousands of dollars. As an entrepreneur of such businesses, I could only conceive of and believe in adding to my wealth a few thousand dollars at a time.

If, for example, I wanted to make more money constructing above ground pools, I could (and did) develop an automated procedure for building such pools that any unskilled laborer could follow. This could (and did) allow me to increase the number of construction crews working for me. Each crew could generate $100-150 per day in net profits. That amounted to thousands of extra dollars in profits every week, not millions.

In 1982, I did not have my own business. Having returned several years earlier from a stint in Africa as a Peace Corps volunteer, I was working as an employee of a publishing company. As an employee, I could imagine getting big raises, but since my base salary was only $35,000, I couldn’t imagine how I could increase that sum by more than about 10% per year. Ten percent was $3,500. In other words, I knew how to get richer by thousands of dollars at a time.

After my big decision to become rich, I changed everything about the way I worked for money. I realized very quickly that I would have to do things differently to increase my wealth by more than $1,000 at a time. So I learned to write advertising copy, and I became my boss’s most valuable employee. Several months later, he gave me a raise to $75,000.

So I had learned to increase my wealth by $10,000 increments. What was the next step? To learn how to get richer $100,000 at a time. To do this, I had to become a business owner. I achieved this by inventing a new product and convincing my boss to let me have a 25% stake in it. This new product made more than $200,000 profit in the first several months after I launched it. I had learned how to get rich $100,000 at a time.

I spent the next 10 years learning how to build a serious business. Our business went from $1 million to about $135 million in revenue during that time. But that $135 million didn’t happen in one fell swoop. It was attained over 10 hard-working years, $1 million at a time.

During the following 10 years, I started many other businesses and I invested in real estate. Then my wealth grew by tens of millions, but for the most part they were all increments of million-dollar deals. The main business I worked with grew at $10 million increments, but my compensation was always a smaller portion of that. So I can’t say that my knowledge of getting rich has gone beyond earning $1 million at a time.

By diversifying, I was able to increase my overall income by $3-5 million per year. (Uncle Sam always took his 40%.) That was (and is) a lot of money. I sometimes fantasized about selling our business and making a huge, $10 million-plus killing. But I somehow knew that would have left me in limbo and forced me to start over again. I also realized that I was already earning all I needed to fulfill any need I could possibly have. So I tempered my ambitions. I focused on building sustainable wealth. I diverted my energies into other ambitions such as becoming a writer. Looking back, I believe I made the right choice.

Getting rich $1 million at a time was and is enough for me. And it should be enough for anyone. So that is the main idea I’d like to plant inside your head if you have the billionaire bug.

But even if you aren’t willing to give up that goal, you should still follow the process I have been describing: getting rich one decimal point at a time. You should do that because it is the only practical and reliable way of becoming wealthy. The get-rich-by-selling-your-online-brainchild to the public is a foolish fantasy you should give up now.

You have to learn each step in sequence: first get richer by $1,000, then $10,000, then $100,000, and then $1 million.

If you try to jump ahead, you will quickly crash headlong into your hubris. And I can tell you, that hurts.

So find out where you are and then figure out how to take the next step.

What are the steps?

Step One: If you are a salaried employee, you can increase your wealth by becoming the most valuable employee in your business. This will increase your wealth by tens or even hundreds of thousands of dollars—though it may mean switching employers as you go. To find out how to do that, read Chapter 4 from Automatic Wealth. After you have done that, you can move to Step Two.

Step Two: If you are a professional or small business owner earning six figures, you can increase your wealth by a $100,000 at a time by replicating your business somehow. If you’d like to find out more about that, read The Reluctant Entrepreneur.

Step Three: If you have a business that is making millions of dollars per year, you can increase your wealth most effectively by making your business considerably larger than it is. To find out how to do that, read Ready, Fire, Aim.

But here’s something everyone who wants to become rich—millionaire rich or billionaire rich—should do: learn a financially valuable skill.

A financially valuable skill is a skill that you can use to climb the ladder of wealth one step at a time. It is a skill that will put you in the mix whenever the opportunity to acquire wealth appears.

There are not many financially valuable skills. In fact, there are basically only four: marketing, selling, producing profitable ideas, and managing profits.

Learning how to sell is probably the most important because it will allow you to sell both your ideas and also the idea that your ideas are valuable. You will need this skill in just about every possible business situation.

Marketing is also a very important skill. It will allow you to sell your company’s products and services to an ever-expanding market. It will also allow you to generate more income from the customers you have.

Learning how to produce profitable ideas is the most difficult skill to acquire. Many wealth builders never learn this skill. They simply use their sales and marketing skills to convince idea generators to sell them their ideas or work for them. If you don’t feel you have this skill, don’t worry. You can still become wealthy if you have some combination of the other three skills.

The final skill is the skill of managing profits. This is essential for building wealth. Many businesspeople develop businesses that bring in significant revenues. But because they lack the skill to create profits, they never get beyond earning a decent living. They never get rich. The good news is that learning how to manage profits is the easiest skill to acquire. You simply must commit yourself to it and pay attention to your business. The opportunities to increase cash flow and cut costs are always present.

So there you have it: my strategy for becoming as rich as you possibly can. Learn one or several of these financially valuable skills and then learn from them how to increase your wealth one decimal point at a time.



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