The Unexpected Side Effects of Making Money (and How to Avoid Them)

My life changed dramatically and immediately when, in 1982, I decided to make “getting rich” my number one goal.

Within a few weeks of that decision, I convinced my boss to raise my compensation from $35,000 to $75,000. A year later, I was a bona-fide millionaire.

My status changed too — from just another good employee to a junior partner and employer of hundreds. This made me more confident. And that confidence had a noticeable effect on everyone I dealt with. They took my opinions more seriously. They gave me more respect. Most memorably, my lifestyle changed. Instead of eking out a modest living, paycheck to paycheck, I was able to buy a car without asking how much it cost.

But making this change happen had two negative consequences:

1. I gave up thousands of hours of good times with friends and family.

2. I did a few things I wish I hadn’t.

When I set that goal, I knew there were more important things in life than money. But I suspected that I would be more likely to achieve it if I made it my number one priority. That turned out to be terribly true. There is enormous power that comes from saying “I will put this goal above all others.” It is impossible to understand that power until you have experienced it.

Most people won’t even dare to try. And maybe that is because most people have more sense than I had back then.

I didn’t recognize how monomaniacal I would become. I didn’t anticipate how willing I would be to put my family second. Most of all, I didn’t realize that I would be making some ethical concessions along the way. When my partner and I were accused of misleading advertising, I was actually shocked. All of our copy had been run by lawyers. It was accurate to the letter of the law. How could they call it misleading?

Because some of it was.

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How to Enjoy the Writer’s Life — Even If You Can’t Write Like a Professional

The most productive and, next to JK Rowling, richest writer in the world is James Patterson.

If you don’t recognize the name, he is the author of Don’t Blink and The Postcard Killers, as well as 48 other books that have been bestsellers in the past 10 years.

By almost any measure, Patterson is a hugely successful writer. But he doesn’t have the attributes that one would typically expect: a brilliant mind, a passion for his work, etc.

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The Ten Commandments of Charity

Down the road going north from my vacation home in Nicaragua, you pass two hamlets, both bearing the same name: Limon.

Most of the families that live there have at least one member who works for Rancho Santana, the residential real estate development my partners and I started 13 years ago. Some work as guards, some as groundskeepers. Others work as housekeepers or gardeners. Still others have found employment as bartenders, waitresses, lifeguards, plumbers, carpenters, mechanics, electricians, or laborers.

The homes they live in are two- or three-bedroom wood-framed or clay-block structures. They travel to and from work by bus or bicycle. They get their water from community wells. Their children go to local schools. When they get sick, they get medical treatment at the clinic, which is financially supported by Rancho Santana.

It is a simple life but not without its pleasures. There are baseball games and soccer matches on Saturdays, church-sponsored events on Sundays, and many birthday parties and weddings and baptisms.

And ever since Rancho Santana erected a tower three years ago, everyone has a cell phone.

When I first came to Rancho Santana, these same families were living in abject poverty. Their houses were shacks put up on dirt floors. Their diet was rice and beans. And there was no medical care available less than an hour’s bus ride away.

The reason things are better now has nothing to do with international development agencies, government initiatives, or non-profit organizations.

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Winner Take All? The Yin and Yang of Negotiating

Sid had done it. He had convinced the IRS agent to forgive the mistake my partner Joel and I had made. He had spent three weeks with the guy, working mornings, golfing with him in the afternoon, and taking him out to dinner.

If the IRS had stuck to their ridiculous position, it would have cost us $10 million. But Sid’s logic and diligence and charm had persuaded one of its bulldogs to do the right thing.

A month later, Sid’s bill crossed my desk. It was for $85,000. “That’s odd,” I thought. “I could have sworn Sid was billing us by the hour.”

Had he done so, the bill would probably not have exceeded $15,000. Still, $85,000 was a small price to pay for the service he had provided. I signed the invoice and sent it on to Joel.

The next day, Joel called me into his office.

“You saw his bill.”

“Yes, I signed it.”

“I saw that. But you know he was supposed to bill us by the hour.”

“Yes, I know. But what he did was worth a lot more than eighty-five grand.”

“Maybe so, but that wasn’t our deal.”

I shrugged.

“We have to bring him in and negotiate the amount.”

“Okay.”

“But we have to plan this thing. We have to rehearse.”

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The Power of Trust

My friend “Roy” is a talented businessman and — in most respects — a natural-born entrepreneur. He’s made several fortunes in his life, but he’s lost them too. As I write this, he is starting over again — for the fourth time. “My life has been a roller coaster,” he said to me over a beer the other night. “And I don’t know why.”

I know why. When it comes to building wealth, Roy is missing one key characteristic. That characteristic?

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Must You Be Cutthroat to Succeed in Business?

“I come from a poor family. I want to start a business and make money to help them. But when I see successful businesspeople depicted on TV and in the movies, it seems like lying and cheating and screwing people is the way to go. I’m worried. Is that what I’m going to have to do?”

This question was posed just after I had given a presentation on entrepreneurship to a group of MBA candidates at Florida Atlantic University. I was momentarily startled by it. I was sure I hadn’t said anything that suggested success in business requires a cutthroat approach.

Still, the question was understandable. When Hollywood shows us business and businesspeople, it is more often than not in a negative light. And when Wall Street, the banking community, and the insurance industry screw their clients – as they’ve done so notoriously – how could any young person think differently?

So I told the young people in my audience what I’m about to tell you.

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Kilimanjaro

“It is not the mountain we conquer but ourselves.” – Sir Edmund Hillary

Kilimanjaro

I never wanted to climb Mount Kilimanjaro. In fact, I never wanted to climb anything.

Still, I couldn’t say no again. Dr. Al Sears is a good friend and an important client. And I’d been demurring on all sorts of hiking and climbing invitations from him for about two years. Besides, since the event was eight months in the future, it was hardly more than a note on my calendar. It wasn’t real. It was subject to cancellation. What did I know about Kilimanjaro?

But even then, I never had any illusions that I would actually like it.

There is a lot to talk about here – including the fact that within 48 hours of accepting Al’s invitation, I had invited two other people to come with us. One was a colleague. Another was a high-school chum.

Why did I bring two more people to the party?

For one thing, it allowed us to have a climbing group of our own. We could plan our own itinerary. We could have our own cabins. But mostly, I felt that by bringing together three people whom I liked and admired we could all have an experience that was more than just a climb. And I was right. Our group of four becomes fast friends – and I think that friendship will endure, because the deepest friendships are always forged in misery.

More about that misery a little later…

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Why People in Need Should Be Treated Like Children

The following is an interview that was published November 2, 2011 in The Palm Beach Letter. The subject: charity.

Ellen: In the office the other day, I heard Tom say, “Mark doesn’t believe in charity.” Is that true?

Mark: If I ever said I don’t believe in charity, I misspoke. I believe in charity. But I also believe that charity can be dangerous.

Ellen: Dangerous? How?

Mark: Charity has the potential to create dependency, destroy initiative, and promote entitlement. If you give a beggar a five-dollar bill every day for nine days, then give him one dollar on the tenth day… chances are, he’ll ask, “Where’s my other four dollars?”

Ellen: That’s pretty cynical.

Mark: I don’t think so. Cultural economists tell us that human populations tend to do what they get rewarded for doing. When you provide unwed mothers or unemployed workers or homeless people with substantial financial subsidies, you are, in effect, rewarding them for such behaviors. You are creating an ever-expanding culture of people who feel entitled to stay pregnant, jobless, and homeless – and be paid for it.

Ellen: You seem to have a dim view of human nature.

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Investing and Wealth Building: Don’t Confuse Them! The Five Key Financial Strategies You Need to Create Wealth

This essay first appeared in The Palm Beach Letter

In my ongoing effort to shock and awe you with contrarian (and sometimes counterintuitive) truths about building wealth, I give you this little nugget to chew on today:

You cannot become wealthy by investing.

Please don’t tell anyone I told you this. If any of my fellow investment newsletter publishers knew I was saying such things they would have me tarred and feathered.

The investment advisory business – and in that I include brokerages, private bankers, and insurance agents, as well as investment newspapers, magazines, newsletters, and Internet publications – is a huge, multibillion-dollar industry based on lots of hard work, clever thinking, sophisticated algorithms, and one teensy-weensy lie.

The lie is that you can grow wealthy through investing.

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How to Become a “Really” Good Writer

There is nothing good writers like to argue about more than what constitutes good writing.

In my 30+ years in the publishing business I have taken part in my share of arguments about good writing. Many of them were lively. But few, if any, were ever resolved.

Of course you can’t agree on what’s good about anything unless you begin with a definition of “good” that is both mutually agreeable and objective. Put differently, it’s impossible to have a useful discussion of good if by good you mean “It pleases me.”

Three people read Walt Whitman’s I Sing the Body Electric.

One person says it isn’t any good because the meter is awkward and because it does not rhyme. “I like only poetry that is regular and rhymes,” he says.

The second person says the poem is great because it evokes beautiful images. He quotes snippets: “The bodies of men and women engirth me” and “framers bare-armed framing a house.”

The third person says it’s “just okay.” What pleases him about poetry is what Ezra Pound called melopoeia – the emotional impact of the musicality of the language. “I got some of that from the poem,” he says, “but not enough.”

Such conversations are dead from the start because they don’t have an objective measure of “goodness” everyone can agree on.

But most discussions about good writing are worse than that because the participants don’t even articulate their underlying preferences. Indeed, they may not even be aware of them.

The ancient Greeks had similarly volatile discussions about what constitutes good drama. They, too, had lots of strongly held opinions but no objective criteria on which to posit their opinions. In 335 BC, Aristotle solved this problem with history’s greatest essay on literary theory: The Poetics. In that essay he attempted to articulate what made “great” Greek theater great.

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