To make a lot of money, forget about dollars and focus on creating values for others
By Les McGuire
I read a great book recently about what the author calls “the inner game of wealth.” The book discusses the way wealthy, prosperous people think and their fundamental belief systems, as compared with everyone else. I am passionate about this topic, and I have spoken about it many times at various seminars and symposia across the nation.
In my experience, it is categorically clear that the defining difference between those who achieve phenomenal financial results and those who do not is their determinant paradigm — in other words, their core belief system. All external results are simply a physical manifestation of what is going on in their brain.
One of my all-time favorite books is Stephen R. Covey’s “The 7 Habits of Highly Effective People.” I am convinced that each of Covey’s seven habits is simply a natural byproduct of a core belief system, which I refer to as the abundance mentality or The Producer Paradigm™. A producer is defined as someone who creates more value for others than he consumes for himself. People in the producer paradigm will naturally develop each of the seven habits because each habit is necessary to create maximum value for others in any area of life.
In a free market economy — which thanks to our Founding Fathers we are unbelievably blessed to enjoy — value created is rewarded by value received. I call this Dollars Follow Value™. Because dollars follow value and producers are constantly focused on creating value, producers tend to naturally attract abundant wealth as a side effect of their second-nature everyday activities. By contrast, consumers, who by definition consume more than they produce, tend to always be focused on how to get gain for themselves. Ironically, this scarcity mindset leads to the natural byproducts of frustration, disappointment, fear and financial lack.
People are often surprised when they ask me what they can do to be more financially prosperous, because my answer is that if you want to make a lot of money, then forget about money and focus on creating value for others, because dollars follow value. Some people really grasp this concept, choose to be responsible for their lives, and they do great things in a very short period of time. Others leave disappointed or even upset because they wanted me to tell them what to invest in or what to do. They think success lies in some product, strategy or investment, and when they do not succeed it is always someone else’s fault.
The hard, cold truth is that success is always in the person, never in the product. People sometimes ask if I think such-and-such is a good investment (fill in the blank…real estate, life insurance, mutual funds, gold, stocks, a small business, hard money lending, a car, etc.) My answer is generally, “No. There is no such thing as a ‘good investment’, there are only good investors.” The producer question is, “Do you know enough about it to make it a good investment?” When people ask me if I think they should invest in something, I will also say, “If you have to ask me, then the answer is no. Go do more homework.”
Producers are not in the game of taking risk. “Risk tolerance” is a consumer concern. Producers do not tolerate risk, they manage risk. Producers have a risk tolerance of near zero.
There are certain phrases that are the mantra of the consumer-investor, but which the producer-investor will never use. Some of these are, “It takes money to make money,” “higher returns are the result of higher risk,” “I’m in it for the long haul,” “a tax dollar deferred is a tax dollar saved,” “compounding interest is the key to wealth,” “always maximize your Qualified Retirement Plan,” “the market always goes up in the long run,” “my goal is to be self-insured,” etc, etc, etc.
In fact, most of the conventional wisdom that we have all been fed our whole lives is a bunch of nonsense that does not hold up to scrutiny, and wealthy, happy, prosperous people have never subscribed to it. Every single example phrase I used above was invented by some financial institution to convince uninformed consumers (usually via financial advisers and the financial media) to give their money to that institution, while at the same time taking most of the risk onto themselves.
Author Robert Kiyosaki said that most people pay money to take risks, and that is exactly how the financial services industry wants it. Producers are mostly immune to such gimmicks, because when your focus is on creating value for others, it is easy to discern true value from hope and hype. By focusing on the Producer Paradigm™, or “the inner game of wealth,” we can all learn to be producers who attract maximum abundance in all areas of life, because we are focused on creating maximum value for others.