cover

CONTENTS

Cover

About the Author

Title Page

Dedication

Epigraph

Foreword

1. On Motive

2. On Excuses

3. On Who Is Likely To Succeed

4. On The Statistical Odds

5. On The Real Odds

6. On Getting Started

7. On Choosing The Right Mountain

8. On Cutting Loose

9. On Pole Positions

10. On Humiliation

11. On Common Impediments

12. On The Tiger Chained To Your Ankle

13. On Frugality

14. On Common Start-Up Errors I: Mistaking Desire For Compulsion

15. On Common Start-Up Errors II: Failure To Monitor Cashflow

16. On Common Start-Up Errors III: Excessive Overhead

17. On Common Start-Up Errors IV: Reinforcing Failure

18. On Common Start-Up Errors V: Skimping On Talent

19. On Boldness

20. On Being In The Right Place At The Right Time

21. On Riches and Happiness

22. On Working For Others

23. On Raising Capital I: Sources Of Capital

24: On Raising Capital II: Earning It

25. On Raising Capital III: Avoidance Of Faustian Pacts

26. On Raising Capital IV: Sharks

27. On Raising Capital V: The Nature Of Dolphins

28. On Raising Capital VI: Playing With Dolphins

29. On Raising Capital VII: Banks

30. On Raising Capital VIII: Swimming With The Fishes

31. On Raising Capital IX: 51% Investors

32. On Creating The Right Environment

33. On Start-Up Hires

34. On Hiring Generally

35. On Management

36. On Eternal Lieutenants

37. On The Start-Up and The Long Wobble

38. On The Settle-Down and Continuous Revolution

39. On Team Spirit

40. On Glory Hounds and Toads

41. On Decision By Consensus

42. On Partnerships and Minority Investors

43. On The Mexican Shootout

44. On Harnessing The Fear Of Failure

45. On The Fallacy Of The Great Idea

46. On Dress Codes

47. On Promoting From Within

48. On The Paradox Of Ownership

49. On Ownership

50. On Customers

51. On Suppliers

52. On Negotiating

53. On Prioritising

54. On Luck

55. On Shortcuts

56. On Courtesy

57. On Debt

58. On Intellectual Property

59. On Emulating

60. On Delegating

61. On Trusting Your Instincts

62. On Persistence

63. On Tenacity

64. On Self-Belief

65. On Leading

66. On Protecting Your Piece Of The Pie

67. On Going Public

68. On The Trojan Trap

69. On Sacred Cows

70. On The Need To Diversify

71. On Excellence

72. On Bonus Arrangements

73. On Rivals

74. On Misfortune

75. On Taking Stock

76. On Must-Do Deals

77. On The Right Time To Sell A Business

78. On Consequences

79. On Status

80. On Qualified Accountants

81. On Milking The Cow

82. On Dragon Cages

83. On Buying Private Yachts, Aeroplanes, Etcetera

84. On Cheating The Taxman

85. On Being Right… Or Wrong

86. On The Unfairness Of It All

87. On Failure

88. On Success

Appendix 1. Wealth Calculated By Cash-In-Hand Or Quickly Realisable Assets

Appendix 2. Wealth Calculated by Total Assets (True Net Worth)

Index

Copyright

About the Author

Felix Dennis is a poet, a publisher and a planter of trees. Having left home at 15, he found himself living as a poverty-stricken musician in a London bedsit. Without a penny of capital and lacking any business experience whatsoever, he created a publishing and digital media empire which today operates on four continents.

For many years the Sunday Times Rich List has ranked him in the Top 100 of Britain’s wealthiest individuals.

He is the author of numerous books, including the international bestseller How to Get Rich, and has also written five books of highly-praised verse, all of which are still in print. His poetry has been performed by the Royal Shakespeare Company on both sides of the Atlantic. His sixth book of verse, Tales From The Woods, will be published by Ebury Press in 2010.

Other interests include commissioning bronze sculpture, breeding rare pigs (and occasionally eating them), drinking French wine, collecting first edition books and avoiding business meetings. His greatest ambition is to complete the planting of a large native broadleaf forest in the heart of England.

He has homes in Soho, Stratford-upon-Avon, Manhattan, Connecticut and the Caribbean island of Mustique.

His website address is www.felixdennis.com.

image

For
Dick Pountain
and the Bunch Books gang
at Goodge Street,
where it all
began

We were clappy-happy, we were hippy-dippy—
We were building Eden by the mighty Mississippi
.

FOREWORD

Those who tread the narrow road

Walk in single file

Shadows plague each wary step,

Hazard haunts each mile.

WHEN I FIRST wrote about the getting of money some years ago in How to Get Rich (a deliberately crass title whose irony escaped all but a few reviewers), I was aiming to reach a wide audience. In this, at least, I succeeded; Internet search engines list thousands of references to the various editions of that book.

How to Get Rich was designed as an anti-self-help manual, written to dissuade the majority of readers from making the attempt to acquire real wealth. My book, then, partially failed in its purpose. Too many critics and readers found it ‘inspirational’.

In short, it sold many copies for the wrong reasons, just as my publishers rightly calculated it might (or so I now suspect) when they commissioned me to write it. There is nothing intrinsically wrong with such an outcome. Publishers need to eat and writers write to be read. Even so, a palliative is in order.

How to Make Money is the result. A shorter book, designed as a tool rather than as an armchair diversion, it turns its back on that vast army who vaguely wish to be rich; those who have nurtured an industry by confusing reading with doing. Instead, these pages offer a brief guide for those determined to attempt the getting of money and willing to shoulder the consequences. Should you not be so resolved, I suggest you discard How to Make Money and choose one of the hundreds of other books written (often by charlatans) especially for you.

Certain passages from How to Get Rich are included in the pages that follow, but all such extracts have been rewritten and edited for the sake of brevity and clarity. Each principle I am familiar with on the subject is discussed in How to Make Money, but it needs to be said that we are engaged in shadow work here, delving where others (perhaps wisely) fear to tread.

As T.S. Eliot once put it:

Between the idea

And the reality

Between the motion

And the act

Falls the shadow.

1

ON MOTIVE

IT IS A commonplace that men and women are driven to act by inherited genes and upbringing, by ‘nature’ and ‘nurture’, or rather, by a combination of the two. The getting of money is no exception to this rule of thumb.

Those seeking wealth must weave such imaginary forces into whole cloth, even while knowing them to be nothing more than the shadow of the past cast upon the present. All such cloth should be dyed and patterned by one’s ability, intelligence and determination to succeed, regulated only by conflicting desires and by one’s degree of respect for authority or fear of retribution – divine or otherwise.

In short, the tyranny of nature and nurture, so widely believed in by those around us, is a phantom and a delusion. At the very least, it is so imperfectly understood that it can lend itself all too readily to the provision of excuses for inaction.

And why should we care, knowing this to be the case?

Whoever seeks to be rich must care. Hidden motives rear their heads constantly and inconveniently. Understanding those motives mutes their ability to restrict our actions and subdue our desires and ambitions.

In the getting of money, then, it is wise to consider one’s motives for the getting itself; not necessarily to repent of such desires or to laugh at them secretly (although the latter is no bad thing) but to lay such ghosts to rest in the light of day lest they return later to haunt us in times of difficulty.

Your motives are your own, but to proceed without a clear and honest understanding of them is to invite disaster at a crucial moment. Motive makes a fine horse when tamed by understanding and bridled by wisdom. But matters can go ill later in the day when a wild mare flicks you from her back in the midst of a battle.

The search for wealth has been accounted in many societies an ignoble objective – and perhaps it is. Yet surely it is better to wrestle with motive early and consider its strength at leisure than to be surprised by it at some perilous moment in the future when all is in the balance?

2

ON EXCUSES

THE THREE VALID reasons for not attempting to become rich are: (1) I do not wish to be rich; (2) I would like to be rich but I have other priorities; and (3) I am too stupid to make the attempt.

The first reason is Teflon-coated and defies challenge – but one wonders just how many who use it would turn down a surprise inheritance of, say, £10 million?

As for the second, what kind of a world would this be if Vincent Van Gogh had never painted, if Beethoven had had no time to compose, if Emily Dickinson had failed to write a poem? All three died relatively poor or flat broke. Nor have I ever read that the giants of thought and philosophy fared much better.

The third reason is a conundrum. Those smart enough to know they are none too bright might stand a better chance on the narrow1 road than they imagine. The rich lists of the world contain a fair number of successful but stupid entrepreneurs.

Apart from those listed above, some of which are debatable, there are no other valid reasons why you should not get rich.

In truth, most of the so-called ‘reasons’ for not pursuing wealth are not reasons at all; they are excuses. Pitiful alibis, half truths and self-serving evasions you have erected to spare yourself from the quiet terror of taking your own financial destiny in your hands and making your dreams concrete reality.

They are the children of fear and the parents of a thousand ‘if onlys’.

1 Why ‘narrow’? Because so few people ever tread it and most walk single file. The most talked about road in the world, but the least travelled.

3

ON WHO IS LIKELY TO SUCCEED

ANYONE IN GOOD health and of reasonable intelligence, provided they utterly commit themselves to the journey, can succeed on the narrow road. The commitment is vital. Its component parts are discussed later in this book.

Tunnel vision helps. Being a bit of a shit helps. A thick skin helps. Stamina is crucial, as is the capacity to work so hard that your best friends mock you, your lovers despair and your rivals and acquaintances watch furtively from the sidelines, half in awe and half in contempt.

Self-confidence helps, but can be simulated or acquired along the way. Tenacity is an absolute requirement. Luck helps – but only if you do not waste time seeking it. The belief that you have a great idea is not worth cuckoo-spit. Ideas are ten a penny while the ability to execute counts for a great deal more.

The answer to ‘Who is likely to succeed?’, perhaps then, is this: not those who want to and not those who need to or those who deserve to, but those who are utterly determined to, whatever the cost to themselves and to those around them.

4

ON THE STATISTICAL ODDS

ONLY 0.000016 PER cent of 60 million UK citizens are rich and less than one per cent of one per cent of the population are even comfortably off. If wealth were decided by lottery, you would have 16 chances in a million of scraping into the top thousand richest people in the UK.

Fortunately, wealth is decided less and less by the lottery of inheritance. Only a quarter of the entries in the Sunday Times Rich List in Britain are there today due to inherited wealth. Thirty years ago, inherited wealth accounted for three-quarters of the list.

There are factors likely to exclude some from becoming rich. Health is one. People in poor health find it difficult to muster the stamina required to grow rich. We must also factor in disadvantage. Not of sex, race, religion or lack of education – no such ‘disadvantages’ present insuperable hurdles in a Western democracy – but mental handicap or the onset of senility virtually rule out serious accumulation of wealth.

Close to 40 per cent of people in the UK, then, are either too ill or too old to have any hope of becoming rich or are too young to be able to do so at this time. If you fall into neither of these groups, you now have only 35,999,000 people to overtake.

However, a substantial proportion of the population have no desire to become rich or have chosen professions that rule out that possibility. For example, over five million people work for the government in the UK, directly or indirectly, and are thus unlikely ever to become rich. Your odds have therefore improved to 28 chances in a million.

Now look around you. How many of those you work or socialise with, do you feel might dedicate themselves to becoming wealthy? Two per cent? Three per cent? Five per cent? Let’s say three per cent, which I would argue is a gross overestimate. That three per cent of the 30-odd million still in the reckoning amounts to under a million rivals. To reach the top thousand earners, we have shortened the statistical odds to one chance in 900 for you to succeed in the getting of real money.

Finally, should you be willing to settle for a place within the ‘comfortably off’ rather than, say, the ‘lesser rich’, your chances of success improve to something like one in 90. (There are approximately 300,000 millionaires in Britain today.)

These odds may still appear daunting, but if they serve to discourage you from the attempt to improve your lot, then you deserve to stay relatively poor. Or, to put it more kindly, whether you deserve to or not, you almost certainly will stay poor.

5

ON THE REAL ODDS

PROVIDING YOU LIVE in a country with some claim to being governed by the rule of law; are of reasonable intelligence and in good mental and physical health; and are not presently incarcerated in a prison or an institution, then nothing, absolutely nothing, can stop you from becoming rich.

This is not a wild claim. It is based on close observation and experience.

There is no magic bullet and no secret formula. The issue revolves around only two questions:

In a sense, they are the same question.

While there are qualities that may assist one to succeed more quickly in becoming rich from a standing start – discipline, confidence, self-belief, flexibility, being lucky, a thick hide, the ability to focus, the knack of learning to listen and learning from listening, an early inclination to delegate and to motivate those around you – nothing can compete with tenacity. Tenacity will eventually trump all other qualities, whether inherited, acquired or mimicked.

Anyone prepared to dedicate themselves and persevere in the getting of money will eventually succeed.

To such a person, the odds of success are meaningless.

6

ON GETTING STARTED

THERE IS NO point in sitting around thinking about getting started – not just for the getting of money but for just about anything.

If you have not made up your mind already, promise yourself you will do so as soon as you have finished reading this book. Better still, this page. Better still, do it right this minute – this ‘unforgiving minute’.

Are you going to commit yourself to becoming rich by following the narrow road? Well – are you?

Commit now, or leave such dreams behind.

Begin now, or turn away.

7

ON CHOOSING THE RIGHT MOUNTAIN

THE WORLD IS full of money. Some of that money has your name on it. All you have to do is dig it out of the mine – but which mine?

Certain industries are more glamorous than others. Some require huge investment, some can be conquered out of a garage. Some are growing, others are in decline. Should you choose only to operate in a glamorous, growing industry? Where is the most opportunity to be found? How do you choose the right mountain?