The Education of Millionaires – Michael Ellsberg

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Around two years ago, at the age of thirty-two, I came to a shocking realization. Not one penny of how I earned my income was even slightly related to anything I ever studied or learned in college.

All the money in the world provides little comfort if we are lonely, sick, or forlorn of love.

All of us—at least the most idealistic among us—want to make a difference in the world, whether it’s in business, the arts, politics, philanthropy, science, or technology. At the very least, we want to make a difference in our communities. This is what feels meaningful to us: making a difference, having an impact, living for a purpose.

So, how do we reconcile our deepest dreams of making a difference in the world—our dreams of leading a meaningful, impactful life, a life of purpose—with the stark reality that the world doesn’t always care what kind of difference we want to make or give us an A for effort? Navigating these rocky existential waters is one of the most important aptitudes you could develop. Err too far in either direction, and it’s very unlikely you’ll end up happy in life. Err too far on the side of reaching for lofty dreams within your career, without any attention to existing market risks and constraints, and you may end up, as David did at twenty-one, in a hospital for malnourishment, at least metaphorically speaking. And few people who end up in that place of starving-artist-hood have the fortune to get out, as David eventually did. Yet, err too far in the other direction, giving in to fear and sticking to the safe path, without even a nod to the larger impact you want to make, the greater purpose you want to achieve, and you may end up feeling like you missed out. You may enjoy some level of predictability or security in your income, but it won’t feel very satisfying to you inside. Few people would call this “success.”

If you want to become wealthy or famous, which I presume you do if you’re buying and reading a book on success, then you’re going to need to make a difference in the lives of many people.

Making an impact on large groups of people involves leading them in some way. Yet, seeking to be a leader is akin to seeking what economists call a “positional good.” A classic example of a positional good is a penthouse apartment. You can’t have a penthouse apartment unless there are apartments below it. Not everyone in society could have a penthouse apartment.

Those who do end up leading often achieve leadership, amass wealth, fame, or support, or make an impact on the world, largely through the effects of word of mouth. Followers/customers/fans convert other people to followers/customers/fans, who convert more people to followers/customers/fans, until a big group—which business author Seth Godin calls a “tribe”—has amassed around that given leader, company, or artist.

Another way to see it: at any point in your career, you’ll usually be choosing between one path that is safer and one path that has the potential to feel more meaningful to you, between one path that is more certain and one that offers more of a chance for a sense of purpose and heroism. It’s hard to be a hero if there’s no risk involved.

there are also a lot of unacknowledged risks to not following your passions, of sticking too close to the beaten path in the name of safety and predictability. These include: “[T]he risk of working with people you don’t respect; the risk of working for a company whose values are inconsistent with your own; the risk of compromising what’s important; the risk of doing something that fails to express—or even contradicts—who you are. And then there is the most dangerous risk of all—the risk of spending your life not doing what you want on the bet you can buy yourself the freedom to do it later.”3
Randy calls the safe-and-narrow path, which pretends to incur no risks but which incurs the biggest risk of all (regretting your life at the end of it),

So, according to what I’ve described so far in this chapter, we face a serious dilemma: Either we follow our passions and purpose, and incur a significant risk of ending up as a starving artist, or we follow a safe, predictable, boring path, and incur a significant risk of ending up full of regret in our lives. Neither option sounds very palatable. Is there a way out of this bind?

It’s just so different—and better—figuring out how to make a difference in the world and find meaning in your life when your bills are covered and you have a secure roof over your head. It’s way less stressful than trying to do it when you’re broke.

I’m amazed at how many people won’t go for their dreams because they’re scared of that 95-percent failure statistic or some version of it. Let’s consider an analogy. While I have absolutely no scientific data to back this up, it seems to me a reasonable guess that 95 percent of all dates are failures. Now, imagine what would happen to our species if all people, when they heard of the low success rates of individual dates leading past the first date, freaked out and said, “OH MY GOD! I’M NEVER GOING TO GO ON A DATE AGAIN! I MIGHT GET REJECTED!” This generation would be the last. Fortunately, when it comes to dating, humans see that there is a big difference between the high likelihood that any single date will fail and the very low likelihood that all of your dates for the rest of your life will fail. Doing something entrepreneurial is, much like dating, a numbers game. If you can keep your financial and emotional losses low each iteration, and not jump off a building if the business (or date) fails, well then, you can keep trying and trying. Eventually, most everyone can find a creative blending of passion and money that works for them, just as eventually most everyone can find a great date that leads to something more.

I got into the world of marketing and sales. I discovered a lot of the past marketing and sales geniuses, like Claude Hopkins and Eugene Schwartz and John Caples and David Ogilvy, and read all of their books. I read Robert Cialdini’s book Influence: The Psychology of Persuasion, which was very impactful on me.

So, if you want to recruit powerful mentors and teachers to your team, the secret is giving. Giving. Giving. Support them. Figure out how you can help them, and do it. Be the water beneath them, pushing them up the fountain. Be enterprising about it—figure out ways to give and to support them that will blow their mind.

So, if you want to recruit powerful mentors and teachers to your team, the secret is giving. Giving. Giving. Support them. Figure out how you can help them, and do it. Be the water beneath them, pushing them up the fountain. Be enterprising about it—figure out ways to give and to support them that will blow their mind.

(If you feel you need to brush up on your own social intelligence—including your sense of tact—a great place to start is the book Social Intelligence: The New Science of Human Relationships by Daniel Goleman. I highly recommend this book: social intelligence is something we learn almost nothing about in our formal education.)

You should definitely read The Trusted Advisor by David Maister, Charles Green, and Robert Galford, and Networking with the Affluent by Thomas J. Stanley, two of the best books on high-integrity, no-sleaze connecting I’ve read.

Your self-study and learning in one of these areas of advice giving is highly liquid; it can often be traded for learning in another area. Because few people are truly well-rounded, if you become well-rounded in these areas of marketing and sales, health and nutrition, spirituality and personal philosophy, and interesting hobbies and passions, you will almost always have something to help people with. It’s like a Swiss army knife of service, ready in your back pocket for any occasion. And, as you give more, and serve more, you’ll eventually attract the right teachers in all these areas, who will help you learn more …

It turns out, Eben doesn’t often do consulting. He’s so busy working on his Internet business, which brings in $30 million a year in revenue (close to $100K per day), that it just doesn’t pay for him to take hours away from his workday to focus on paid hourly labor. If he spends several hours on someone else’s business for pay, he gets the pay, but he never gets the products of his labor back. If he spends a few hours creating an Internet video that he sells, he can keep selling that video for the rest of his life. The gift that keeps on giving. Leverage. Scalability.

We get paid less and are valued less by other businesspeople with whom we might want to connect because these skill sets have a lower impact on business results. We’ve basically just trained ourselves to be cogs in a machine. Now, with highly educated Chinese and Indians happy to do this kind of by-the-book work for us, many of us are finding that these skills we’ve been training sixteen years to develop have no impact in the workplace at all; we’re out of work. Software programs might even take our job.

in a capitalist economy, in general (and with some significant exceptions) money flows to the people who make the most impact on the most people who have the most money. That’s just the way the game works. You can rail against it, you can call for a socialist revolution. But as long as you’re still opting to play the game, you might as well learn the rules of the game.

$50,000 in a day—because your skill set was that highly valued on the marketplace—and give that money.

In my experience, the skill of success breaks down into three things. The skill of marketing. The skill of sales. And the skill of leadership.

In the Fortune 1000, what position is the most highly paid? You think it’s the CEO? Nope. It’s the #1 sales rep. Second most highly paid? The #2 sales rep. Third most highly paid? VP of sales. Fourth? CEO.

What I still didn’t realize—and what most people who are resistant to learning sales don’t realize—is that there’s a lot of room between just hanging out your shingle and hoping people show up, on the one hand, and forcing and manipulating people to buy things they don’t want, on the other hand. Most people, for reasons of integrity,

Thedagroup.ca

If you want to earn more money in a different field or industry than you currently work in, how can you gain the experience you need in your new chosen field without abandoning your current cash flow? Perhaps you could learn at night or on weekends, or start small and moonlight in the new business. Perhaps you can “learn while you earn” in some way. Maybe you can find people out there who are already successful in that field, who can mentor you for free, or with whom you can apprentice for free.
The point is not that debt is always bad—it’s that the decisions you make when you’re spending your own hard-earned money now, rather than spending “play money” on credit, tend to be more realistic, focused, and reasoned, and less risky and speculative.

It turns out that the millionaires I’ve been talking to who did not complete their formal education didn’t forsake education at all. They were simply following andragogy rather than pedagogy.

Take some of the best books on entrepreneurship. Maybe Innovation and Entrepreneurship by Peter Drucker. Or The Art of the Start by Guy Kawasaki,

“You wake up in the morning, you go brush your teeth. You walk to the kitchen, you make your breakfast. You get ready for work, you drive to work. You get to work. You count the hours until your first coffee break, then its lunchtime. And then you get home from work. You’re exhausted. You don’t even want to talk to your spouse or your friends because you are so tired. You get on the computer and you just numb out and you surf the Internet. Then you go to bed and repeat. That was how my life felt. I knew I had to make a change. I knew I had to do something. I didn’t know how I was going to do it or what it was going to be, but I had to do something.”

At some point in his sales career, he had learned about a concept called “the five-minute rule” from one of his sales mentors. This mentor, a high school dropout and now a successful sales manager, had told Hal: “You’re going to have customers who aren’t going to buy from you. Some might be rude to you or cut your appointment short. You’re going to have days when you don’t reach your goals. And it’s OK to be negative sometimes. But not for more than five minutes.

I can’t change what happened to me. There’s no point in feeling bad about it. If I feel down on myself, or sad or depressed, that doesn’t change anything, it just makes me miserable.”
After I made all these excuses to this guy as to why I wasn’t successful, he said, “Well, if there are other people doing well in your industry, and you’re not, there’s nothing wrong with the business you’re in, there’s something wrong with you.” And I said, “Well, no, no, no, you don’t understand . . .” and I went through a whole other list of excuses as to why the business wasn’t working. “I’m good at what I do. It’s just a really tough business. I want to get into a different, better business, which will be easier.” He said, “Look, young man. You’re like most people. You think the grass is greener on the other side. What’s going to happen if you go into another business is you’re going to spend another six months, another year, another two years, learning the technical skills of another industry, so you can go out and repeat the same bad business habits that have caused you to be a failure in this business. “What you need to do, young man, is learn fundamental business skills. Because once you do, you can apply those to any industry. But until you learn how to make a business work, it doesn’t matter what industry you go into, you’re still going to fail at it.” That was probably the most profound advice ever given to me, at a time in my life when I was willing to hear it, and have it sink in.
they engaged in deep inquiry about what outcomes they specifically wanted to create in their lives, and then relentlessly engaged in only the activities directly related to producing those outcomes in their lives.

If you look for and take care of what’s needed in a situation, rather than what’s requested by your boss, your teammates, or your clients, you’ll always be the first one up for promotions, the first one to win new business, and the last one laid off.

Schooling is important if you want to become a lawyer, a doctor, or a professor. But it’s not as critical for being an entrepreneur.

The Startup Genome Project (http://www.startupgenome.cc). The Project is inspired by the work of successful serial entrepreneur Steve Blank, who argues in his books and teachings that a startup is an organization that should be designed specifically to learn.

He has traded theoretical education in college courses, which cost him a fortune, for real-world education in his own startup, in which he’s instead earning money while he learns. He has simply bypassed the higher education bubble.

Its just so different – and better – figuring out how to make a difference in the world an dfind meaning in your life when your bills are covered and you have a secure roof over your head. Its way less stressful then trying to do it when you are broke.

It turns out, Eben doesnt do consulting. He is so busy working on his business, which brings 30 million a year in revenue, that it just doesnt pay forhim to take hours away from his workday to focus on paid hourlylabor. If he spends several hours on someone else’s business for pay, he gets the pay, but he never gets the products of his labor back. If he spends a few hours creating an Internet video that he sells, he can keep selling that video for the rest of his life. The gift tat keeps on giving. Leverage. Scalability.

Its hard to help poor people when you are one of them.

In my experience, the skill of success breaks down into three things: The skill of marketing. The skill of sales. And teh skill of leadership.

“Andragogy” its literal meaning, I found out, is “man-leading”, and it is contrasted with “pedagogy” which means “child-leading”.

Books to read: Innovation and Entrepreneurship by Peter Drucker, Theart of the start by Guy Kawasaki.