The Hindu Business Line : Wealth is really all about cause and effect

TO MAKE money it is not necessary to dream of owning the mint or winning a lottery. It is a skill that you can learn, assures Brian Tracy in Getting Rich Your Own Way from Wiley (www.wiley.com). "By paying attention to what successful people do — or do not do — and carefully following their example, you will get the same results they do," he hints, laying out "five sources of self-made millionaires, and the 18 principles you need to program your mind for total success."

The secret, after all, is that wealth is "really all about cause and effect." The successful are `action-oriented'; they are those who `just do it!' while those who accomplish little spend their lives hoping, wishing, dreaming, and making excuses."

There are five reasons why people do not become wealthy, writes Tracy. First, "it never occurs to them" because they have "a reference group or a social circle" that is not wealthy; wealth achievement, therefore, is "part of the worldview". Second, "they never decide to;" unless you do something different you will continue to get what you have always got, doing what you have always done.

Third, "procrastination can prevent people from becoming wealthy" though those who postpone, saying, `maybe tomorrow,' always have a reason. Fourth hurdle is "the inability to delay gratification," thus suffering from "an irresistible compulsion to spend every single penny they make and whatever else they can borrow or buy on credit." And fifth is the lack of time perspective, and consequently lack of `bigger, longer-term goals'.

Now that you are serious about becoming wealthy, Tracy lists five ways to help you achieve your goal: "Become an entrepreneur, work your way up, become a professional, get into sales, and all the others." But, let us first understand the meaning of wealth. It is "cash flow from other sources," the author defines. "You are wealthy only when your money works for you." That's a line you can work on.

Getting rich hinges on `good work habits' that lead to results, rather than add up hours. Focus on contribution, Tracy commands. Distressingly, a survey found that on an average, "people spend 37 per cent of their time in idle chatter with co-workers, 13 per cent in coming late, leaving early, taking extended coffee breaks and surfing the Net." Things turn worse when people not only waste their own time but also of others. "In fact, the people around you are the primary source of your own wasted time," is a line you may not like to read with your colleague around.

To build wealth you need but one simple key: Add value. Generally, "difference between what it costs to produce and deliver and the price a customer is willing to pay for it is called profit, or added value." So, find a need and fill it, encourages Tracy.

There are big fortunes in following small ideas, so "virtually any field that offers an opportunity to excel and earn profits can serve as a springboard to riches." Whatever you choose to do, "work better and more efficiently than others," and more important, "hold on to the profits and excess cash that you earn as a result."

Where do the rich invest their money? In five places, informs Tracy: "Their own businesses, income-producing real estate, land held for development, liquid investments, and stocks and bonds."

There is the "100-10-3-1" rule to help you buy home, but you would have to look for `motivated sellers'. The Greater Fool Theory that takes hold in a stock market boom can happen in real estate too. "If you hear someone say that the only direction that something can go is up, either don't buy it, or sell it as fast as you can."

There are ten rules for `investment success' that Tracy cites from Bernard Baruch. These include advice against speculating "unless you can make it a full-time job", and caution towards "anyone bringing gifts of `inside' information or tips."

Also, take your losses "quickly and cleanly," and remember not to become "a jack of all investments" instead of sticking to the field you know best.

Take your profit too soon, though that means conquering `greed'; and distrust anyone who claims to predict the future. Stay away from commodities markets, Tracy counsels, because it is "one of the biggest of all gambles."

We find most businesses fail and eat away saved wealth. Look hard and you'd find two major causes: not selling enough, and poor cost controls. "One of the best ways to become a business success is to get on-the-job training."

When employed, don't fall into the trap of thinking that you work for someone else. "You are always self-employed. You are the president of your own personal services corporation," is an inspiring message with the Tracy trademark. That way, you'd learn faster.

Doesn't money change one's mind? True, because "when you begin to save money, you will feel like the master of your own destiny," says Tracy.

Having money in the bank changes your attitude toward yourself and the world; it can even affect your body language, such as a more erect posture, and a more confident voice.

Find a way to trace Tracy!

BookValue@TheHindu.co.in

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