Here's the thing about "The Choose Yourself Guide To Wealth": it's a poorly written rant... but it has some gems in it. Now, you can decide on your own whether you want to take life/business advice from someone who has fluctuated between millionaire and broke (multiple times!), but some of his points certainly ring true. Altucher has some interesting things to say about sales, HR, fundraising, and investing. There's also an interesting section on "myths that ruin peoples' lives". Lucky for you, I've extracted all the pearls so you don't have to dig through the... not pearls.
Introduction: Ideas Are the Currency of the Twenty-First Century
Something I realized during this process: ideas are the most valuable currency of our time. Nothing else.
My only three goals in life are To be happy. To eradicate unhappiness in my life. For every day to be as smooth as possible. No hassles.
Sleep well. Eat well. Exercise.
Be around people who love and support you and whom you love and support. Ignore everyone else as much as you can. Engage with nobody who is bad to you.
Whenever you notice you are complaining or anxious or nervous or scared, try to stop yourself and do two things: Repeat to yourself, “I notice I’m feeling anxious.” This distances you from the feeling of “I’m anxious!” Think of at least one new thing you are grateful for.
Part 1: New Game, New Rules
Remember this phrase: “Get Paid, Get Laid, Lose Weight” — because those are the three things people will pay for.
Only free time, imagination, creativity, and an ability to disappear will help you deliver value that nobody ever delivered before in the history of humankind.
Everyone is an entrepreneur. The only skills you need to be an entrepreneur are an ability to fail, an ability to have ideas and to sell those ideas, the courage to execute on those ideas, and to be persistent so even as you fail you learn and move on to the next adventure.
States of panic are special and have to be revered.
Ideas are the currency of life. Not money — because money can run out. Money gets depleted until you go broke. But good ideas buy you good experiences, buy you better ideas, buy you better experiences, buy you more time, save your life. Financial wealth is a side effect of the “runner’s high” of your idea muscle.
At any given point I have about ten to twenty books on my “to go” list — books that I can just pop into and continue reading. Every day I read at least 10 percent of a nonfiction book that gives me tons of new ideas and similar portions of an inspirational book, a fiction book of high-quality writing, and maybe a book on games (lately I’ve been solving chess puzzles). And then I start writing.
Nobody is going to buy from someone they hate. The buyer has to like you and want to be your friend. People pay for friendship. This sounds sort of whorish and it is.
Now I only do business with people I like. The fastest way to lose all your money and mutilate your heart is to work with people you don’t like. I will never do that again. And you don’t have to do it either, despite what you might think.
Often the best way to make friends and customers for life is to direct them to a better service or product than yours.
What you offer is not just your product. Your offering is product, services, your employees, your experiences, your ideas, your other customers, and even (as mentioned above) your competitors. So sell them all. When you are good at what you do, the product or service you offer is just the way people build the first link to you. It’s the top of a huge pyramid.
When you get in the door, do not sell your product. People make a decision on your product in five seconds. Sell the dream. Build up images of the dream. Give a taste of what the dream is like. Let it linger. Let it weave itself. Let the imagination of the buyer take hold and run with it. The dream has up to infinity in value.
But then, you might ask, do I risk under-delivering? Answer: Yes. Don’t do that. Be as good as the dream.
This is where being an Idea Machine saves your life and saves everything around you. But remember: bad customers will kill you and your family and your friends.
Being a leader doesn’t mean you are the guy who runs things. Being a leader doesn’t mean you created something or you did something great in the past or some other person has given you any kind of authority. Being a leader happens right now, today. It’s something you can do without money, without authority, and without anybody.
Most important by far is that you be able to care about others’ success more than your own. Everyone around you needs to ultimately become better than you. That’s how you lead. The light is in front of you and you take them to the light and then go back. If all the people around you achieve more than you, then life will be good. I’ve seen this happen repeatedly. It doesn’t matter if they are employees, investors, friends, or spouses. If you just focus on this one principle in all of your actions, then you are a leader.
An organization with less than thirty people is a tribe. There is evidence from 70,000 years ago that if a tribe got bigger than thirty people, it would split into two tribes.
One hundred percent of the time there is a good reason and a real reason for everything.
Don’t do something just for the money. Money is a side effect of persistence. You persist in things you are interested in. Explore your interests. Then persist. Then enjoy all the side effects.
Here’s the operating theory: you don’t need to spend 10,000 hours at anything to be the best. You just need to be pretty good at something (spend a couple of hundred hours) and then you need to know how to give a good talk in public. You will stand out, because so few people want to talk in public.
Comedians are the best public speakers and are up against the most brutal audiences, so you must study them. Learn from them.
ABS — Always Be Storytelling.
ABV — Always Be Vulnerable.
Poor speakers create an artificial divide between themselves and the audience. They feel they need to do this in order to establish their own credibility. Let me tell you — there is no such thing as credibility. In one hundred years there will be no buildings named after any of us. Somebody has to be on stage and some people have to be in the audience. That’s the only difference.
So here’s how what you say: “I’m new at this. You guys are the grand masters of negotiation. If a grand master plays a novice, then he will always win. So help me out. What would you do if you were me?” And then no matter what they say, you say, “But seriously, if you were me, what would you do. Again, I’m just a novice. I have no clue what I’m doing. Help me out here.” And they will help you out. Because they want the deal to close and you really do need their help, or else the deal will never close.
Let’s say someone is buying your company. It may seem like all they are doing is buying the assets of your company. But they are also buying your company’s “negative imprint.” In other words, they are buying the fact that nobody else can buy your company. They can say, “Well, we don’t care about that.” Then fine. See if it’s true. Offer your services to other companies. If you can’t walk away from a negotiation, then you aren’t negotiating. You’re just working out the terms of your slavery.
You can’t get good at something if you are working twenty hours a day. In fact, something is very wrong in your life if that is how much you are working at one thing. The typical answer is “I study four hours a day.” Former world chess champion Anatoly Karpov said the maximum he would study chess is three hours a day. Then, when he wasn’t in tournaments, he’d spend the rest of the day exercising, studying languages, and doing other things to balance out his life..
But when it comes to mastery, there are always big failures.
Part 2: Making Money in the Twenty-First Century
Trends: The Power to See Things Differently Than Everyone Else
Understanding trends is not a day trader’s game. It’s the long game. But since trends are so hard to value at the beginning, there are enormous profits to be made.
I got my friends to write reviews of the site on their popular blogs. I wrote articles that would link back to the useful content on the site. I guest blogged on many different websites. This is how you get users back to your site. It’s true for any site: financial sites, bird-watching sites, weight loss sites, sports sites, whatever.
Ultimately I had traffic coming from about 20 different websites. Never let one company decide your fate. 1000s of businesses have been lost because of this one mistake.
The key is to anticipate what the people you’re aiming to serve might want, show them how it will cost them nothing but they will get huge benefit from it, and then just simply do it. Make it as easy as possible for the other side to say yes before you ask them. If you want someone to say yes, show them exactly what “yes” looks like and show them that it is already made.
There’s a saying in Argentina, “When the CEO is looking, the cow grows fatter.” A business builds fastest when the CEO is looking at it, because he or she sees a thousand details. The COO sees a hundred details, the regular employee ten. And details slip through the cracks when there is nobody looking.
Should I pay taxes? No. You should always reinvest your money and operate at a loss. Should I pay dividends? See above. What should the CEO salary be? No more than two times that of your lowest employee if you are not profitable. This even assumes you are funded. If you are not funded your salary should be zero until your revenues can pay your salary last. The CEO salary is the last expense paid in every business.
When should one fire an employee? When they gossip. When they don’t over-deliver constantly. When they ask for a raise because they think they are making below industry standard. When the talk badly about a client. When they have an attitude. When should you give a raise? Rarely. How big should the employee option pool be? Fifteen to 20 percent. How much do advisers get? One-quarter of one percent. Advisers are useless. Don’t even have an advisory board. How much do board members get? Nothing. They should all be investors. If they aren’t an investor, then one-half of one percent.
Should I hire a head of sales? No. The founder is the head of sales until at least $10 million in sales.
Second, nobody can merely invest their way to wealth, not even Warren Buffett. Warren Buffett made fees on his hedge funds and reinvested those. That is how he made the initial part of his wealth. Then he used the money people put into his insurance companies, invested that, and kept 100 percent of the profits, and that’s how he made billions. So compounding, by itself, will never make you rich. The argument for saving money is that it then begins to work for you. But there are much better ways for your money to work for you than compound interest, which is the fool’s gold found at the end of a rainbow. You can chase after it but you’ll never find it.
I was talking to James Manos, the creator of the HBO hit show Dexter. He said, “My definition of success is if you can’t distinguish between work and pleasure.”
Thiel’s four attributes for a good business are monopoly, scalability, network effect, and brand.
Part 3: Keep and Grow the Money You Make
And the good news is this: if you can become aware of the myths that people hold and the way they manipulate societies and cultures, you can write your own rules and create abundance for yourself.
Owning a home will give you “roots,” and is far better than “flushing money down the toilet with rent.” Most people don’t realize that owning a home has all the attributes of the worst investment possible: it’s highly illiquid, there’s a high leverage, it includes most of your net worth, and provides you with an average return of only 0.2 percent over the past year. And this doesn’t count all your maintenance costs. I’d rather rent, and either invest the extra money in myself and my own ideas.
Having kids is the purpose of life, and having a purpose in life is important to having a fulfilling life. I like how Scott Adams from Dilbert fame put it: live according to Systems and not Goals. Nobody has a single purpose in life. We are often put into our life circumstances and have to figure out how to do the best. In this book and in Choose Yourself! I try to give a system to develop great ideas and build abundance.
My family is my “family.”
Humans are smarter now than they were 40,000 years ago.
Sometimes wars can be justified.
Takeaway: every fancy retirement plan is a way to transfer money straight from your employer to Wall Street professionals, bypassing you along the way.
Tip #1: Never invest big chunks of your money. A big chunk is more than 2 percent of your money. So if you have $10,000, don’t buy a TV that costs more than two hundred dollars. Don’t buy an iPad. Don’t buy a car. Definitely don’t buy a car. Just be happy with the money in the bank. But if you have even more money here’s what it means: Don’t go to college. Don’t own a home. Don’t invest more than 2 percent in any private company. Don’t invest more than 2 percent in any stock or any bunch of stocks in the same sector (don’t put more than 10 percent overall in stocks). Don’t invest in your own company. I know one guy who had a big idea that he loved. He put a million a month into his own company. Had 40 employees. Slept with the secretary. Divorced his wife and married the secretary. Had two kids with the secretary. Divorced her. Married another secretary. Went broke. Disappeared.
Tip #2. The whole point. Stop paying your debt. Let me clarify. If you borrowed from a friend, pay your friend back. Be a good person. But all other debt is a contract, and there are several situations where you can stop paying debt. “Ethics” is a government-made term to try and induce you to pay back your debt when you don’t have to. But you can ignore that.
Well, Who Makes Money In The Market Then? Three types of people: People who hold stocks FOREVER. Think: Warren Buffett (has never sold a share of Berkshire Hathaway since 1967) or Bill Gates (he sells shares but for 20 years basically held onto his MSFT stock). People who hold stocks for a millionth of a second (see Michael Lewis’s book “Flash Boys” which I highly recommend.) This is borderline illegal and I don’t recommend it. People who cheat.
So use this guideline: No more than 3% of your portfolio in any one stock. But if the stock grows past 3% you can keep it. To quote Warren Buffett again: “If you have Lebron James on your team, you don’t trade him away.” No more than 30% of your portfolio in stocks (unless some of the stocks grow, in which case you just keep letting them grow).
Books. Reading is the best return on investment. You have to live your entire life in order to know one life. But with reading you can know 1000s of people’s lives for almost no cost. What a great return!
Remember that cash is king. Having a lot of cash leads to a stress free life. Invest as little as possible.
The S&P 500 index is proven to be the best hedge against inflation except for hyperinflation.
Investing in you is the best hedge against hyperinflation. If you have a good business, you collect all the money.
Never invest in anyone else’s ideas of investing: mutual funds, ETFs, bank advisors, hedge funds, venture capital funds.
Never invest because of tax reasons: 401(k)s, IRAs, Roth IRAs, 529 Plans, insurance annuities, etc. These are taxes against the middle class where the money goes straight from your employer into the hands of the rich.
I choose public over private school. I moved about eighty miles out of NYC so I could send my kids to a good public school and pull them out of the BS private school they are in. I’m in favor of “unschooling” — no school education at all. I trust that kids want to learn and if they don’t, then school is even a worse way to get them to learn. School is intended as babysitting so I don’t let a BS private school charge college-like prices to babysit my kids.
Nobody should inherit more than the minimal they need monthly to get by but still have motivation to go out and make something for themselves. I set up trusts for my kids, not just to guarantee that they’ll never have to lie on the floor scared (like I have) but that their kids and their grandkids will hopefully have money to spend.
Uncertainty is your best friend. A hundred percent of opportunities in life are created because people are uncertain about almost everything in their lives. We are constantly trying to close the enormous gap between the things we are certain about and the things we are uncertain about, and almost every invention, product, Internet service, book, whatever has been created to help us close that gap.
“Help me” is the most powerful, and most forgotten, prayer.
Laughter is essential. The only way to survive is to laugh. There’s that saying: “Man plans, God laughs.” Well, you might as well be on the same side as God
I only care about you. And you’re effin’ crazy if you thought the world was going to line up any other way than the way it lined up. Tough on you. I know that when I feel like, “ugh, this situation is insane,” the first place I need to look is at me. I am insane.
Nobody ever forgets the guy with a roll of two-dollar bills.