Episode 1: Introduction

Welcome to The Dream Toolbox. I’ll explain what that means in a minute, but first I have an important question for you: do you have dreams for your life that always seem just beyond your reach?  If so, this podcast, and the ones, which will follow, are very specifically for you. They are designed to open windows of economic opportunity that most people don’t know even exist and to provide a set of skill based tools to enable a better life to reach their dreams. 

What I will have to say is designed particularly for young people just starting out, but is applicable to anyone who thinks they are condemned to a life lived in the lower levels of economic achievement because they are too young, too poor, a member of an ethnic minority, or a woman who thinks it is still a man’s world. It just isn’t so, and I hope I can demonstrate to at least some of those who hear this recording that age, poverty, gender, race—or any of a dozen other excuses people have for not living an abundant financial life—are just not that important. 

But dreams have to be converted to reality by work, and effective work requires proper tools.  That is why I call this the Dream Toolbox. 

But first of all, you need to know who the heck I am. Who is this guy who is purporting to give you ideas that might change your life? My name is Ken Aldrich and for many years I have been a serial entrepreneur, which simply means that I've started a flock of businesses and most of them have been successful enough so that I haven't had to work for many years except on things that I really wanted to do. I have also helped to finance a lot of other entrepreneurs trying to make their dreams come true and I’ve seen things that work and the things that don’t. 

Those experiences have changed my life, but it took me many years and a lot of luck to figure out the things I want to share with you and my goal now is to pay my good luck forward by saving you years of struggle if I can. 

I didn't start out wealthy. I started out as a 15-year-old kid working for 25 cents per hour as a car hop in a root beer stand, worked menial and boring jobs to get myself through school, and finally got a college degree and a graduate degree and went to work in a job that I really found I didn't like and I found myself wondering if all that effort was worth it. 

Fortunately, I found a way to change all that and have had many years of what I can only call, “a wonderful life”. But it took me many years of trial and error to discover that success is not about struggling to get a better job, but about building and using a set of mental tools that make fulfilling dreams easier, faster and more certain than I would ever have dreamed. Those are the tools in the Dream Toolbox. 

Now, what are those tools? Well there are lots of them and we can't cover them all in one short discussion, but there is one tool that is central to everything:  if you can change the way you look at yourself, if you can see yourself as in power in control of your own life now, then you can make your dreams come true and actually be in control of your life. You absolutely can do just that, and in the conversations that follow this introduction, I hope to teach you techniques to speed the process. 

Others you'll learn on your own once you start experimenting. So I hope you'll stay tuned and follow the conversations that follow this one. I’ll go into a lot of detail and show you lot of different tools, but I'm going to try to keep each conversation relatively short, so I'll close now and hope that you'll follow the ones that come after this. 

Thank you so much. 

Episode 2: Creating Your Dream

Welcome back to the Dream Toolbox. Let’s talk some more about belief systems because they control everything else that is in the Dream Toolbox. Belief in yourself and believing in your dream is a strange thing. With it, there is almost nothing you cannot achieve; without it, nothing will happen.

Creating that belief--and making it so much a part of your brain that nothing can ever shake it loose--is a lot harder. The mind wants to say, “I must be crazy to think I could do that.”

But you can do it and there is a way to make your dream so much a part of who you are that your subconscious mind will find ways to fulfill the dream even when you can’t see how it is possible.

One of the most powerful tools to make dreams real in your mind is a process I call Active Dreaming. Others call it Visualization, and it has been known for many, many years under these and other names. What I can tell you from first hand experience is that it works. Here is what to do:

Decide what your dream is. You can have more than one, but it is better to pick one big dream and focus on that until it becomes a reality. It needs to be something that you really want to happen, not just a “that would be nice to have” kind of dream.

Once you have the dream defined, fill in all the details in your mind. My original dream wasn’t particularly noble—I just wanted to have a million dollars in my bank account—but I then imagined every detail of what that would feel like, what kind of house I would live in, what kind of car I would drive, what the smell of the leather in that car would be, what it would be like to take the woman I loved to dinner and never worry if I could pay the bill.

In my own case, I created a whole life story for my dream and every morning for 10 minutes I would close my eyes and live that dream in my mind. I didn’t allow myself to think about how I would achieve it. I imagined it as already being real, right then, not in the future. That is the beauty of the mind; it can create future things and make them real today. We’ve all had that experience in the dreams we have at night. Sometimes we wake up and think they actually happened. That is the kind of clarity you want to achieve in your mind.

After doing that Active Dreaming exercise every day, use all the other tools in your mental toolbox to pursue that dream in your daily life. Dreams still require daily work, but what you will have done with Active Dreaming is to program your subconscious mind to see opportunities that you might otherwise never see, each one of which gets you closer to your goal.

Stay tuned for more tools from the Dream Toolbox.

Episode 3: Believing Your Dream

Welcome back to The Dream Toolbox.  I promised you in the last session that I would talk about what you believe and why that matters.

Henry Ford, who created the automobile industry we know today once said:

Whether you think you can, or you think you can't--you're right.”

There is no more important concept to understand than this. Our belief systems determine where we will end up in life.  I am not talking about religious faith, although that can be a huge help if it is strong, but about those fundamental things we believe about ourselves.

So how do you change fundamental beliefs from “I can’t” to “I can”?  Without that change, success is very unlikely. The core beliefs about what we can and cannot do are embedded in us by parents, family, and friends almost from birth, and sometimes well-meaning family can be the worst.

Let me give you a personal example to illustrate this.  I spoke at a conference for High School and Middle School students a couple of years ago and told my own story of going from a family in which no one had ever finished college to attending Harvard University.  During the question and answer period, a young woman who was considering where to go to college told her story.  She had the grades and SAT scores to get into the college of her dreams, but everyone around her, family, friends, even school counselors was telling her, “Don’t do it.  You won’t fit in with all those rich kids and they will look down on you and you won’t succeed.”  

I heard her telling her story and interrupted to say, “That is nonsense. Don’t believe it. I entered Harvard as a poor kid from the Midwest who was terrified of the rich prep school kids who were in my class.  Within weeks, none of it mattered because we were all in the same boat, struggling to learn the same new and exciting things. You can create your own success.”  She burst into tears and said, “No one has ever told me that before.  Thank you.”  I later learned that she had entered a prestigious college and I have no doubt will end up near the top of her class.  What changed?   Her belief system about what was possible for her.

In the next segment, I’ll give you yet another personal example. 

Episode 4: Beliefs As Tools

Welcome back.  I promised to give you another personal example of why beliefs matter.

Quite a few years ago, I was approached by a man I knew only through a mutual friend.  He had little formal education, but had a real estate license, a small real estate company, and the dream of building a high-rise office building using a construction technique that had never been tried in an earthquake area like LA.  What he did not have was any experience or “track record” of having done such a thing.  And he had no money; nor did I at the time.  We had a third partner who had grown up in the construction industry and knew a lot about construction, even though he had never built a building on his own. What all of us had, however, was the absolute belief that we could do it.  With that team and that dream, we set about to build our building.

I won’t bore you with the details, but a few years later a 30 story high rise office building lined the skyline of an LA suburb and had withstood a major earthquake that validated our faith in the construction methods we had fought for.  I can also tell you that in the several years that it took to put that project together, we had many “near death” experiences in our business, including my bank demanding immediate repayment of a loan that was several times my entire net worth.  But what made it all work was that we looked at each of these crises as simply problems to be solved, not proof that we were doomed to failure.

How did that happen?  We had some luck, of course, but everyone has luck many times in life, both good and bad.  The difference is whether you take advantage of the good luck and find a way to deal with the bad. Succeeding at that depends on whether you believe you can.  It is all about Henry Ford’s statement:

Whether you think you can, or you think you can't--you're right.”

So how do you build that into your own brain?  That is the subject of the next chapter.

Episode 5: Changing Your Belief System

Welcome back to the Dream Toolbox podcasts.  

How do you begin to change your belief system to redefine what you believe is possible?

A simple and effective process for doing this can begin with something as simple as a piece of paper.  Start with a blank piece of paper and give yourself 5 minutes to write down a list of all of the things you would really like to do if you knew you could not fail.   Do it quickly and don’t edit the list in your mind as you go.  Your subconscious will try to tell you, “don’t list that; it is impossible.”  List it anyway.  The purpose of the exercise is to break the habit of listening to all the negative self-talk that our brains always engage in, the kind that says, “you couldn’t possibly do that; you are too poor, or you will be discriminated against, or that is just impossible.

Once you have the list, then you can weed out those things that would be fun, but are not really important, and perhaps weed out some that are really impossible, like flying without wings (but be careful about making assumptions that are too limiting; who would have thought when the first airplane was built that space travel was possible?).  From the list that remains, you will likely have one or more potential goals that are really worth the time and effort to make them real.  That list may change with time as you change and new possibilities open up, but the process is important and worth doing over again anytime you feel “stuck” in a job or a project, or in life.

Then look through your list for those things you have always wanted to do but didn’t try because you were too afraid of failure.  Then pick one that really speaks to you as something about which you can say, “I really want to do that”.  Finally, just do it!  Either of two things will happen, both good: 

1) you will succeed and that will strengthen your belief that there is always a way to succeed, or
2) you will fail in that particular endeavor, realize that a failed project does not make you a failure, but is just a part of your learning process.

In either case, you will grow and become stronger.

In doing this, I suggest you start with things that can be achieved within a fairly short period of time?  Why?  Because you want to make your mistakes soon, learn from them, and build on that knowledge.  You also want to begin to learn what it feels like to succeed and not fear failure.

Which brings me to the topic of failure.  

In any individual project, particularly as you begin, you will probably fail one or more times.  It doesn’t matter. What matters is that you see such failures as a natural part of the road to success and events you can learn from.

Episode 6: The Entrepreneurial Mind

If your dream has anything to do with financial success, you need to learn something about what I call “The Entrepreneurial Mind.”

There is a very famous statement made by the writer, F. Scott Fitzgerald that goes like this: "Let me tell you about the very rich. They are different from you and me.”

Fitzgerald was both right and wrong.  The rich are very different from most people, not because they have more money, but because, if they have made their own wealth and not just inherited it, they have a way of looking at life that is simply different from most of the people in the world.   And that makes all the difference.

I call it, “the Entrepreneurial Mind”, and it is an enormously powerful tool.  It is the difference between those who rise to the top 20%--or even the top 1%--of the economy and those who wonder why they haven’t.  It is also something that anyone can learn and develop if they really want to.  

The best way I can illustrate the process of change from conventional thinking to the Entrepreneurial Mind is a very personal example.

As a young man, I used to have a fantasy that one morning I would wake up rich and never have to work again.  Then one New Year’s morning as I read the morning newspaper, I realized something:  I didn’t have to work that year—or any other year, ever!  Nor would I have to lower my standard of living or change my lifestyle.  

An even greater realization came later—and that is what I want to share.  I didn’t get to financial and personal freedom because I started out rich

Or was smarter

Or had a better education

Or won the lottery or a Las Vegas jackpot

What really happened was that, over time, using some of the techniques we have already discussed, I was lucky enough to realize that the power to change my life was within me and not dependent on anyone else’s rules. 

Your definition of success can be anything from wanting to create highly successful companies to wanting to cure cancer, but if you can’t wake up every morning wanting to achieve that goal—and loving even the tedious things you have to do to get there—then just get a job, put in your 40 hours per week, and hope that the pension they promised you will actually be there.   For some, that is enough. For me, it would have been a slow death.

But most of us are programmed from a very early age to believe that a lot of things are just impossible for us, that we are too poor, to uneducated, from the wrong ethnic group or have the wrong skin color to succeed.  Those negative belief systems can destroy our dreams.

I could tell you story after story—all true—of friends of mine who have started with nothing but a belief in themselves and achieved incredible success. One was an orphan in a war torn foreign country who came to this country with no money and without speaking English; another was a young man who had to flee from Iran after the revolution at the risk of being put to death by the revolutionaries and arrived in New York with little more than the clothes on his back; another is a woman whose mother was murdered, she herself was raped, and her business destroyed.  Yet each of these people is now extremely happy and successful.

The reason:  they each believed that they had the power to create their own success, no matter what happened to them from the outside.  And they did just that. How does one do that?  You replace every negative thought that tells you why you can’t succeed with one that says, “Why not; I can do that.”  It takes time and practice and there are many resources, books, courses, mentors that can help you get there, but the key to it all is to believe and act as if you were already the success you intend to be; and make that the overwhelming priority in your life.

Episode 7: Skills Are Tools

Welcome back to the Toolbox. We’ve talked about broad based tools like belief systems and active imagining.  Now let’s start getting more specific.

No one would think of building a house without tools and materials, hammers, nails, lumber, etc.  So what tools do you need for financial success? Over a lifetime, there may be many, but if you start with these two, all the rest can be mastered as needed.  What are they?

1. Master the English language and how to use it to persuade others to meet your needs!

Let me get personal for a moment.  I have started 10 successful companies in biotech, medical devices, finance, and other fields.  Did I have skills in those fields? No!  I never had a math course beyond high school algebra; never had a science course at all, and didn’t study accounting until my second year of law school.

What I did study was how to use language to persuade, excite and explain my dreams to others and get them to support them.  I found scientists who would develop the products, I found financial experts to fund my companies, and I found accountants and lawyers to guide us through the process.

If you truly understand the power of language—English in particular, and other languages if you can—you can learn anything else you need to know or find someone who already knows what you need to help you.

But if you don’t know why “Me and him went to the store” is bad grammar, or if you think the language of some ethnic group is “cool”, and you use it in business, I can just about guarantee you will fail.  So learn to use language as the powerful tool it is.

With a command of language, skill in public and private speaking and writing, and the understanding of how money works as a tool and not an end in itself, there is no reason to fail. 

Learn from those who are already successful. You don’t have to re-invent every skill.  You can, instead, find someone who is already successful and learn from him or her just by observing, or, if you have the chance, by asking questions.  

Tony Robbins, the motivational speaker who built his early fame by convincing people they could walk on a bed of coals did not just build a fire one day and try walking on it.  He found someone who actually did it, asked how they did it, and then put that knowledge to work to begin building his fortune. 

Warren Buffet, the most successful investor of all time, learned from his mentor, Ben Graham, how to find undervalued stocks; then improved on that technique and became one of the richest men in the world. 

There are hundreds of other skills and techniques you can learn, but it all starts with realizing that everything you learn, in school, on the job, or just living life, can be a tool to help you achieve success.  Learning some of those skills can sometimes be hard work.  But who cares?  Once you realize that the skills are the tools to your success, the work can become pleasurable—because it has a purpose: to make your life better.

We’ll talk more about converting skills into investment assets in the next blog.

Episode 8: Skills Are Investment Assets

Let’s talk about skills as investment assets.

Consider these facts:

1. No wealthy person I know depends on a paycheck to live the life they live. They own assets, stocks, real estate, businesses that work for them while they sleep or play. 

2. A quality investment can last a lifetime, and beyond. A job is only as good as yesterday’s paycheck.

Most of the World’s wealthy people, particularly in the US, did not start out with a lot of investment assets. They first developed skills that had value and then converted those skills into assets.  Every single one of the young billionaires you see in the news got that way by trading his or her skills for ownership in a company they created or helped to create.

Let me share a personal example of how these factors can work.  Early in my career, I developed some good skills in the area of finance.  As a result, I got a job with a promising company in the real estate business.  One day, I was offered a chance, along with other executives and junior executives of the company to purchase an interest in a real estate project being developed by the company in conjunction with a major insurance company.  

I didn’t really have enough money to be able to make the investment comfortably—it involved foregoing some things I would have preferred to do with what little money I had—but I studied the investment until I understood it well.  I was pretty sure I was right, and when I learned that the CEO and President of the company were also investing their own money, I decided to take the risk. For several years I got nothing back on my money while the project was being completed.  

Then something wonderful happened.  One of the two apartment developments that made about half of the total project was sold and my share was over 30 times what I had invested.  The other half that was not sold has been providing me annual income for the last 35 years that is 4 times my original investment—each and every year! 

You could say I was just lucky, but consider these things:

I would never have had the opportunity if I had not developed skills that put me in position to be offered a share in the project.

I was willing to use some of the very limited amounts of money that I had to take a calculated risk on something that might move me up the economic pyramid. Notice that I did not take a Las Vegas type risk.  I wasn’t gambling. There was ample evidence from the actions of the more senior executives and my own research that this was probably a good investment. It was not a sure thing; nothing is; but the ratio of risk to reward was in my favor.

What I didn’t know then, but have learned later, is that this kind of opportunity happens far more often than most people realize. I even made an investment a few years ago that returned 100 times my original capital.  It was not without risk, but I had developed over time the ability and confidence to think that by using wisely the skills and capital I had, I had a much better chance of winning than losing and that the profits from my winners would far outweigh any losses on my mistakes.  That is the formula for wealth.

Above all, it started with my developing skills that other people wanted and needed, not just having a job.  In fact, the skills that led to that investment were developed through 4 different jobs that I held until I had learned all that I thought I could from them.  Then I moved on and added more skills.  Skills are assets and are worth more—and are many times more secure—than any actual job you will ever have.

Episode 9: Converting Dreams To Goals

There is profound truth in the saying, “If you don’t have a dream, how are you going to have a dream come true?”

But it sometimes needs to be changed to this: “If you don’t have a goal, how are you going to achieve it?”

The difference is profound.  A dream is something that floats in the air of fantasy and always in the future, a bit out of reach.  A goal can be seen, can be measured, and progress toward it can be charted. And when you reach a goal, there is the chance to celebrate that you have accomplished something important.

Equally important, having clear—and preferably big and audacious—goals is the only way one can measure achievement.  Think about the first manned space flight to the moon.  That was a Big Audacious Goal, particularly when you recall that the US started that program before we had ever even flown in space and the whole mission was accomplished using computers that were not as powerful as the smart phone in your pocket.  

The other remarkable thing about that achievement (and it is true of every successful entrepreneurial venture I know) is that most of the time that moon rocket was off course. Minute course corrections and adjustments were constantly being made.

But, those corrections would have been impossible without a very clear goal.  Unfortunately, the goals in our entrepreneurial dreams are not always that clear. But they need to be.  Otherwise, you never know if you are off course or not.  

One of the drills that every entrepreneur should do—and few actually do—is to spend a ridiculous amount of time developing a very short and simple description of what the goal of the business he or she is creating should be.  

I’m not talking about those lofty and vague “Mission Statements” that the textbooks on entrepreneurship often tell you to write.  If you can’t describe in one or two sentences what your business is designed to do, you probably haven’t given it enough thought.  Think about the statement, “The Ultimate Driving Machine”.  No one with any exposure to TV or radio advertising will fail to recognize that as the tag line for a BMW auto product.  But is also one of the finest descriptions of a business goal I have ever heard.  A million things have to come together actually to build that automobile, but asking, “Will this help create the Ultimate Driving Machine?” can be the test of every decision that is made.  Is what we are about to do getting closer or farther away from that goal?” That kind of clarity has real power.

I’m not arguing that BMW has achieved their goal, but could anyone in that company possible not know what the goal is?  If you can articulate what your business is designed to achieve that clearly—even if it takes a few more words—you will be well on the way to achieving that goal.

It all starts with clear goals.  Without them, you will never know if you have succeeded or failed.

Episode 10: Problem Solving

Perhaps the most striking difference between those who have an entrepreneurial mindset and those who don’t is how they approach the problems—whether in business or personal life—that everyone faces.

The conventional thinker immediately looks to see if there are known solutions, on the Internet, in books, among friends, etc.  If not, he or she concludes they can't proceed any further and looks to do something else.

The person with an entrepreneurial mind almost instinctively sees every problem as an opportunity.  Rahm Emanuel, former chief of staff to President Obama, is famous for saying, “Never waste a crisis”.  He was talking about politics, but the same is often true in life and business.

In business, the fact that something is not working and someone, or a lot of people, need it to work, perhaps desperately, means that whoever can solve the problem has the potential to create a new product or a new business.  And the lovely truth is that there is probably no problem—except perhaps death itself, and some would disagree about that—that can’t be solved. 

Long before I was born, every document was written by hand.  Then Guttenberg invented the printing press with movable type and, quite literally, changed the world by making knowledge available to everyone.

When I was a kid, if you wanted copies of a document, you put in multiple sheets of carbon paper—and heaven help you if you made a mistake.  You had to correct it on each and every copy.  Then Xerox developed the copier and once you had a perfect original, you could make as many copies as you wanted.   

Then others created the computer driven word processor and making a typing mistake was trivial.  The computer even corrected your mistakes for you—often with the wrong word, but that is another story.

If I may get personal for a moment, let me tell you a true story.  When I was in high school I needed to take the SATs to get into a good college. I had studied Latin for 4 years because that was essentially the only language course my high school offered.  Either I was a very bad student or the teacher wasn’t very good, or both, but when I got to college I found I couldn’t even translate the Latin inscription over the gates.

But before that, I had to take the SATs.  The test consisted of a long passage from Caesar’s Gaulic Wars, and I couldn’t read it—a phrase here and there perhaps, but I simply couldn’t get past “Omnia Gaulia in tres partes divisi est.”  I could have just quit, but I, fortunately, even then, I had a mind that was wired to look for solutions.

So I read the questions, which were in English, and discovered that if I used the few phrases I could translate, I could eliminate some obviously wrong answers.  Then I realized that some of the questions depended on answers covered in earlier questions.  From that, I could begin to tell what the story was about and that gave me the answers to even more questions—without ever knowing the Latin at all.

I handed in the test, convinced I had failed in spite of my clever attempt, only to find out later that, not only had I passed (they never told you your actual scores in those days), but I had scored so high that I was exempt from further language requirements at a very prestigious Ivy League college—and I still couldn’t read the inscription over the college gate.

I tell that story, not because I am proud of my genius.  Anyone with a willingness to look for alternative solutions could have done the same—and certainly not because it says anything good about the SAT testing of those days—but because it illustrates the difference between the mindset that automatically assumes that if the answer can’t be found in books or the classroom it does not exist and the mindset that says, “there has to be a way to do this; how can I find it?” 

I was lucky in that I seem to have been born with that instinct.  But it is one that I absolutely know can be learned.

A problem is only a problem if you fail to see it as the opportunity it really is.

Episode 11: The Myth of Someday

There is a myth that pervades the way most of us were brought up that success will somehow come (if it ever does) in some future “someday” because of a fortunate promotion, “being discovered” or gradually working our way up some ladder of success. 

Any of those things could happen, but what makes this way of thinking so destructive is that it ignores one of the most powerful tools we all have—the power of the mind. I know of no formal study that has ever been made, but my own experience with successful entrepreneurs--and what I have read about others whom I have never met convinces me that in almost every case, those people believed in the core of their being—long before they actually became rich or famous—that they already had the keys to wealth and success within them and did not need anyone else to say “attaboy.”

There is a much abused saying, “Fake it until you make it.”  But behind that glib phrase is a powerful truth.  If you can wake up every morning already knowing in your very bones that success is already inside you, the subconscious mind takes over and seeks out ways to make that happen. We have talked about this already, but it is worth repeating—often.

That doesn’t change the fact that most successful people have spent thousands of hours developing their skills before they achieved what the world often thinks is “instant success”.  But what most people miss is that just spending those thousands of hours is meaningless without the core belief that “I am already a success” and the equally important definition of clear and definable goals.  You could say, “I am destined for success”, but that is not as powerful because it puts success in the future.  The real success is the day you begin to see yourself as successful now, with the cars and houses and other badges of success to come later.

I told you earlier the story of my own imaging of my success. But all the while I was waking up each day and seeing my dream as a reality, I was still doing all the things I needed to do to build my first business, working long hours, adding to my education, and planning ahead. 

Notice two things in my story:

I still had to put in the thousands of hours needed to achieve the financial rewards I wanted, but once I made that image of being successful already a part of my mental DNA, those hours no longer seemed like work, just part of the course I had to run to a finish line that I already had reached in my mind.

 What I didn’t tell you was that when I reached my goal, I made a terrible mistake:  I neglected to set a new set of goals.  The result was that I drifted for a lot longer than I like to remember, feeling discontent with my success, until I woke up one morning and realized I needed a new set of goals.  Then life got exciting again and I started the first of the next 9 companies.

Episode 12: Money

Let’s talk about Money. We can’t talk about the tools of success without talking about it. Most everyone thinks they know what “Money” is.  And most everyone is wrong!

Some people say, “Money is the root of evil”.  It’s not.  The real quote is: “The love of money is the root of evil”, which is a very different thing.

In fact, until you do something with it, money has no value at all.  You can’t eat it; you can’t drink it; you can’t wear it (except perhaps as a silly costume), and it won’t keep you warm—unless you set it on fire, but that won’t keep you warm very long.

I recently visited the Federal Reserve in Los Angeles where they have a room about the size of a football field completely filled with US currency.  It is quite impressive and actually “smells like money.”  But as long as it sits in that room it is totally useless.

But when you do something with money, it can become an incredibly powerful tool.  And that is the way to think about it. It is a tool!  No more; no less.  It is a lot like those incredible Swiss Army Knives I grew up with that have blades for almost any task you can think of, whether cutting a steak or putting in a screw. It can be used for almost anything. 

Once you begin to think about money as a tool, like a hammer or a screwdriver or saw, but incredibly more versatile, you have taken the first step toward using that tool to change your life and the lives of those you love.

The really interesting thing about money is that is a tool that can be made to grow to any size you need it to be to accomplish what you want to do. If you need something small like a hamburger, money can make that available to you.  But if you need something bigger like a house or an education for yourself or your children, it can do that to.  And if you want to build a huge business to try to cure cancer, it can do that too.

And here is the amazing part—even if all you have at the moment is the money for the hamburger, you can make it grow to any size you need it to be. And I really mean YOU!  Not someone else, not some nameless corporation, and above all, not the government—but YOU or anyone who truly understands how the tool called money really works.

The bad news about that is that most people will never understand how to use the tool called money and will spend their lives envying those who do—and buying lottery tickets while waiting for their “luck” to change.

The good news is that if you are hearing or reading this, you are already on your way to becoming one of those people who understands how to use the tool called money to change your life.

It won’t happen without work, but if you truly want to succeed and are willing to spend the time and effort to understand what money is and how to make it work for you—as a tool, not your master or a goal in itself—you are already on the first step of the ladder that leads to the top of the pyramid.

Episode 13: Freedom and Happiness

You have no doubt heard it said, “Money can’t buy happiness.”  And that is true.  I know many unhappy millionaires.  But I know many more unhappy folks whose lack of enough money to feel safe in their daily lives creates its own unhappiness.

The truth is that having enough money cannot assure happiness, but it can assure freedom from many of things that can turn even a happy life into an unhappy one.

It is hard to be happy and joyful if:
you are not sure how you will pay the rent,
or the car payment,
or a trip to the doctor,
or tuition for next semester.

But now I have to tell you the secret most people will not tell you: having a good job is not enough.  That is a dangerous belief to have—and yet it is all around us.

When I apply for a loan to refinance one of my pieces of real estate, the first thing I am asked to provide is a copy of my W-2 (the form you get each year to prove your salary and tax deductions) or a copy of my last two paychecks.

Since I have not worked for a paycheck for over 40 years, it always takes a while before I convince the borrower to look instead at the assets that provide enough income to pay all my loan payments many times over, whether I ever work a day or not.

What the people who write those loan applications don’t realize is that a job is the most vulnerable—almost useless—asset you can have. The only asset that really matters is the skill to make whatever money you need, no matter what.  Even having stocks and bonds and real estate is not as valuable as understanding how money works and how to create it in your life.  You can lose the stocks and bonds and real estate through bad investing or a market collapse (although you never will when you really understand how to use money as a tool), but your skills will always be there as long as you have health and strength to use them.

Don’t misunderstand.  It is important to build tangible wealth because someday all of us will be too old or too ill to use our skills, but without the skill of understanding how to use money as a tool for better living, none of your assets are safe.  However, if you use the job you have to build skills that will survive the loss that job, you are well on your way to the kind of financial security that means you will never have to fear losing a job again.

I have worked for two different very big companies that became insolvent and had to be sold for pennies on the dollar—and with that sale, my job disappeared almost overnight.  Yet the collapse of those employers and my job with it—had almost no impact on my life except to force me to look at new and better opportunities.  Why?  Because the skills I had gained could be translated into other jobs or—in my case—new businesses that created wealth and income without my having to work at all in those businesses.  That leaves me free to pursue other dreams.  And it all starts with the knowledge that knowledge and skills, not a particular job, are what creates financial freedom.  We’ll pursue that thought in the next blog.

Episode 14: Building Wealth

Everywhere you turn today, you hear people lamenting the income gap between the top 10% of earners and the bottom 50%, or below.

Those people are half right.  There is a big difference between those who earn the most and those who just barely get by. But, as we will discuss in detail later, it is not a gap but a pyramid, something else much easier to manage. The reality is that anyone who learns the skills they need and develops the mindset of the wealthy and not the poor can create wealth and never have to work again.

But first, let’s look at what will not work:  a better job or a raise will not get you there.  Think about it.

In the US, to join the top 10%, you need an income of about $250,000/year. That is the equivalent of a salary of $125/hour.  The average family income for those who work for a salary is about 10% of that.

There just aren’t that many jobs like that.

And, any job you have can be gone tomorrow.

So what will work?

There is a sign in Malibu, where I live, that says, “One good investment is worth a lifetime of toil”.  That is absolutely true.  

To create real financial security, what you need is to create Wealth

A job is not Wealth. A job is just income that can be gone tomorrow.

Wealth means that you have created investment assets that will work for you 24 hours a day.  Wealth will provide for your retirement, help launch a career for your children, or fund a charity you love. If you build Wealth, having “a better job” will never matter to you again.

But how do you start if you don’t already have money?

To create Wealth, you need assets to invest.

But, cash is not the only asset.  Skills are also an asset

So forget about just getting a better job.  A job--even a very good one—can be gone tomorrow. Instead, look at any job as an opportunity to learn skills and turn them into assets.  A job is a tool—nothing more. It is a tool to help build Wealth and Financial Freedom.

There are two basic ways to convert skills to assets

Seek Ownership Opportunities.  Whenever possible, find jobs where some equity in the business is part of the pay package.  Most of the new billionaires that you read about did not start the company that made them rich; they joined it when it was young and took part of their pay in equity.  Steve Ballmer, who is a billionaire and just bought a basketball team in Los Angeles, started out by going to work for a little start-up company called Microsoft.  In the beginning, there were some risks, but he undoubtedly knew that he had the skills to try again if the first company failed.  

Use OPM. That is just an abbreviation for “Other People’s Money”, and it is what you can attract if you develop skills that other people either do not have or do not have the time to use.  I have a friend who just a few years ago suffered the complete collapse of the business he was in through no fault of his own.  In less that 5 years he has built a new business in a field he was never in before that provides him a nice house, college tuition for his children and expensive vacations for his family. The secret was two things: he had developed skills that could be used anywhere (which we have talked about, and he knew he would need money for his new business and used the skills of language and persuasion that we have also talked about to convince other people with lesser or different skills, but who had money, to invest with him.  He has made himself rich and his investors richer.

I built my wealth the same way and anyone with marketable skills can do it—so develop those skills!

Episode 15: Wealth Building Tools - Corporations

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We hear a lot of talk these days about “corporate greed” and many people, particularly young people, believe that their chances of success are being “oppressed” by the power and greed of big corporations.

Let me let you in on an important secret: there is no such thing as “corporate greed.”  To understand why that is true requires that we realize that corporations are nothing more or less than tools and the greed or altruism associated with them is no more or less than that of their owners.

Thinking of corporations as some kind of enemy and failing to understand how they really work is a recipe for the failure of dreams.  Think a bit about these things:

1. A corporation is a tool that enables someone with a dream to pursue it without fear that one mistake could destroy everything they have built or created for themselves or those they love.  Suppose you made toys that children loved and were selling like crazy and both children and parents loved them.  Then one day, through no fault of your own, a child injures itself with one of your toys and you are sued for millions.  If the business were a corporation, that could still be very bad, but losing that suit would not mean you lose your home or your car or your savings.  Only the business would be at risk.  A loss would be traumatic, but you could begin again.  That is what corporations do.  They separate the owners’ personal assets from the risks of running a business.

2. That separation is what makes it possible for an entrepreneur to find the capital needed to start a new business.  No one would have invested in Tesla Motors if they ran the risk that one defective automobile could wipe out their life savings.  The same would be true of Uber, or Google or any other successful company.  A corporation is what makes it possible for almost all the new innovations, from iPhones to electric cars, to happen.  Without that thing called a “corporation”, no one would risk their money and nothing would ever get done.

3. But can corporations be used for evil?  Yes, of course, and in time they will almost always be found out and go out of business.  But that will not destroy the lives of the people who innocently believed they were investing in something good.  The founders and managers of the corporation may have great difficulty ever getting money for their next venture, and in some cases might go to jail, and the people who invested will lose their investment---but not their most cherished personal assets.  That is the magic of a corporation, and its power to do good as well.  

4. A corporation is a tool, an incredibly useful one without which your chance and mine of success would be much less.  I use a separate corporation for each business I create or invest in and that enables me to enlist others to invest their money with me because we both know that failure will not destroy us and we can recover to build a new great business.

Episode 16: Zero Sum Games

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Welcome back. We need now to talk a bit about one of the most important concepts you can ever learn about building wealth and financial freedom. It is actually quite simple and can be summed up in one phrase: “Success is not a zero sum game.”

What does that mean? Think about any sports contest. Whether it is baseball, football, or any other competition, there is only one winner. Second place is only the first loser. But financial success is not like that. Think about Apple Computer, the most valuable company in the world as I am writing this. One of the reasons that Apple is so successful is that it has created platforms for apps on which independent developers can produce and distribute apps that
can make their creators very wealthy very fast.

But consider this: everytime one of those app developers creates a successful app, Apple computer gets richer. But this is an important distinction. Apple does not get rich by making the app producer poorer. It gets rich by making the app producer richer. This is the exact opposite of a zero sum game. It is a game in which success by one party increases the success and wealth of the other. That is how business in a free society works at its best.

Are there exceptions? Sure, in some rare cases there is competition in which there is only a winner and a loser. I own interest in a company that frequently bids on US and foreign contracts. These can result in revenues of 10’s of millions of dollars. In those bids, there is only one winner. But notice something even here. In order to increase our chances of success, we often form partnerships with companies who have skills our people lack. That increases our chances of winning the contract. But it also means we have to share the income from the contract if we win.

Is that bad? No, quite the opposite. By sharing the wealth and the skills of two companies, we increase our chances of winning more contracts. Thus, even where there is a clear winner and loser, the players who share skills and profits are more likely to be successful than those who do not.

Let me give you another personal example. Many years ago I was part of a team that was helping and owner decide which of several bidders was going to acquire some real estate worth hundreds of millions of dollars. One investor was the clear favorite, but he made a crucial mistake. He tried to drive such a hard bargain that no one else could benefit. My clients heard his pitch and walked away from the negotiations. In business you often hear the saying, “you have to leave something on the table for the other guy”. This bidder did not understand that. He wanted it all. What he got was nothing and another bidder, who offered some attractive benefits to the seller, my client, won the contract. He gave up something in the beginning but ended up one of the richest men in the world as a result. He understood that Life (and business) is not a zero sum game.

If you can apply that principal in life and business, always looking for ways to make those around you wealthier as well and looking for ways to make the result of your efforts greater by cooperating instead of wanting everything for yourself, you have taken a giant first step toward success.

Success in business is not a Zero Sum Game. If you try to make it one, you are almost guaranteed to lose. Help others succeed and you will help yourself.

Episode 17: Race, Gender, and Success

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We hear a lot these days about “White Privilege” and “Gender Bias”.  If you can change the way you think about those things, you can increase your chances of success in business and life dramatically.

First of all, everyone who is not blind to reality knows that in the United States (and most of the world), it is extremely helpful to be a white male instead of black or Hispanic or Asian, or a female.  I would be lying if I did not say that in the United States today, it is a great advantage to be born white—and also an advantage to be born rich.  But there is a huge difference between an advantage and a privilege.

In this, as in life, words matter. If you are black or part of any other minority race and I say to you, “White Privilege”, your mind will immediately think of some special entitlement that is granted to white people that you cannot hope to have.  But if I change that phrase to “White Advantage”, notice how differently that makes you see the world.

Let’s take an example.  If you are on a basketball team and are only 5’10” tall, and an opposing player is 6’10”, he has an enormous “advantage”.  But does it give him the “privilege” of always winning?  No. If in your mind, instead of saying “advantage”, you think “privilege”, you will have missed a huge opportunity. Just having an advantage does not mean you win. That was proven dramatically in the basketball world a few years ago by a player named Muggsy Bogues.  Muggsy was 5’3” tall, but became a star player in the NBA, playing against 7-foot giants for 14 seasons in a league where even a 6-foot tall guard was considered too short.

His story is inspiring in its own right, but the point is that if he had considered being tall equal to the privilege of winning games, he would have stayed away, never tried, and never had the success he did.  Did he have to work harder than everyone else?  Yes.  But he considered his short height an obstacle to be overcome, not the lack of the “privilege” of being a basketball player.

By the way, the same is true of gender bias. The reality is this:  life is not fair, never has been and never will be, but, particularly for those living in the United States, there is almost always a way to overcome any obstacle of race or gender.  A black man was elected president of the US for two terms.  A black man was for many years the CEO of American Express, a company that most people consider almost of a symbol of white wealth. There are and have been female CEOs of several Fortune 500 companies.  And with the passage of time, as more and more women and racial minorities succeed in high profile jobs and in politics, the advantage will be less.  

But the key to success, whether you are in a minority or a white male, is to recognize that life is not fair, but never to consider someone else’s advantage to be a privilege; it is just an advantage that can be overcome. If you are part of a minority and see what others call privileges as just obstacles that can be overcome, you are very likely to succeed. By the way, if you are white and think that you are entitled to success as a “privilege” you will almost certainly fail and lose out to someone who worked harder and played the game of business and life better. 

As someone who has founded 10 successful companies, invested in many more and observed what happens in the real world of business, I am going to go a step further.  If you are in a minority, but take the trouble (and make the huge effort) to understand how the game is played, prepare yourself better and work harder, you can actually make your minority status into an advantage. How can that be?

Consider this, I am considering hiring or promoting two employees, one is a minority and the other a white male. They appear to have accomplished pretty much the same things, but both are young and have potentially long careers ahead of them. I am very likely, either consciously or unconsciously, to give preference to the minority person. Why?  For a very simple reason.  I care about who can add value to my company for the long term.  If at a young age I am presented with two candidates who seem to have accomplished the same amount, but I know that one had to overcome big obstacles to get where he or she is, who do you think I am going to believe is more likely to succeed when my business faces the obstacles that every business does?  I’m going to favor the one who has already proven that they can face tough odds and succeed anyway. 

It doesn’t always work that way.  There is still prejudice in the world, but particularly in business, hard work, acquired skills, and toughness of mind will prevail.  So please, never think of “privilege”; think only of obstacles to be conquered.

Episode 18: Failure vs FEAR Of Failure

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Believe it or not, one of the biggest obstacles to achieving financial freedom and an abundant and successful life can be summed up in three words: FEAR OF FAILURE. Notice that I did not say, Failure. I said Fear of Failure. In reaching any goal worth having there will be failures along the way—often many of them. No, it is the Fear of Failure that dooms most people to lives of frustration, living far below their potential.

The reasons are actually quite simple. Fear of Failure does several things, all of them bad.
1. It persuades us never to try, or
2. It makes us give up on ourselves or our dream at the first major barrier,
3. It paralyzes us at exactly the times when bold action is needed.
4. And, it undermines the inner belief of “I can do that” that we have talked about already and are starting to build.

But to deal with the fear of failure, we first have to look the possibility of failure in the eye. Every time I start on a new project that I think has any risk of failure, I do something that most of us find very uncomfortable. It is not comfortable for me either, but I have learned that doing it is one of the best predictors and guarantors of success I know. What is that something?

Before I ever take action, I ask myself these questions:
1. “What is the worst thing that could happen if I try this?”
2. “Can I survive if the worst thing goes wrong?” I’m not thinking about the kind of physical survival that could happen in a war or natural disaster I mean can I survive it economically and can the relationships that I cherish survive it.
3. If the worst happens can I do more than just survive the failure; can I rebuild my dream and try again?

My experience has been that in almost all cases, even the worst case situation can be overcome, but looking at the risks squarely, in the beginning, takes the fear out of the equation.

Fear of Failure is the biggest cause of actual failure, usually because of one basic reason: Fear of failure causes us to give less than our best. It is human nature to build in an excuse, “I could have succeeded but I didn’t have the chance to give it my full attention.” Whatever that excuse is, banish it from the beginning. It is a little scary to put all your hopes and dreams into a project, but anything less almost guarantees failure. There is a saying, “Don’t put all your eggs in one basket.” Mark Twain turned that around into a saying that is much better when you are talking about committing to a project. His phrase was, “Put all your eggs in one basket: and watch that basket.”

The lesson from all this is very simple: Look the risk of failure squarely in the eye and decide if you can deal with that risk if it happens. If so, commit completely and make sure that failure doesn’t actually happen.

Every successful business I have ever created has had one or more “near-death experiences” in which failure was possible. But because I had faced those possibilities in advance and was committed to success in spite of those risks, I managed in almost every case to turn potential failure into success. Out of 11 businesses I founded, one did fail, but the failure was of the business. It was not my failure and I went on to more successes. You can too.

Episode 19: Getting Started

Dream Toolbox - Getting Started

Welcome back to Dream Toolbox.  We have talked a lot about changing core belief systems, visualizing your dream and making it real in your mind, as well as creating useful waypoints to make sure you stay on track.  There will be more to say about each of these as we go along.  They are the critical pieces in making any dream come true.

But now it is time to talk about more mundane things.   The first of which is just getting started.  For most people, dreams remain just that—dreams—and are never realized because of a critical missing piece:  those who had the dreams simply never took the first practical steps to make them a reality.  So let’s talk about those steps.

1.  Take a hard, realistic look at where you are in life and where you want to go. If you have no money and perhaps belong to a minority race or have any of many other obstacles in your way, don’t pretend those obstacles are not real.  Instead, start thinking about what you will have to change about you, your surroundings, your education, or your lifestyle to turn those obstacles into stepping-stones to success. 

I know that I have said that those kinds of obstacles do not define you or prohibit you from achieving success.  But, and this is a big “but”, if you don’t address them realistically, they can block your success.  I’ll give you a trivial, but illustrative example.  I had a business partner a few years ago who was an incredibly talented black man.  I noticed that when we went to business meetings, he was inevitably the best-dressed person in the room and then when we traveled together he always carried a travel iron and pressed his clothes before each new day.  

I asked him why, and his answer was simple and insightful.  He said, “Although I am confident of my ability, I know that in any meeting I may encounter those who expect me as a black man to be less capable.  Being always the best-dressed person in the room helps to keep that issue off the table and requires very little effort on my part.”  I asked if he resented having always to be just a little bit better than his competitors.  His answer was wise and accurate.  He said, “Everyone has obstacles to overcome.  Mine just happens to be skin color, but the things I do to make sure that is not a barrier to success can also give me a better chance of success even if my skin color would never have mattered in any particular meeting. So, by solving one problem, I have created extra opportunities.  Why should I resent that?”

2.  Prepare to succeed.  Begin by doing the things we have already discussed and whatever else you have determined need to be done for success.  Above all, remember the words of John Wooden, perhaps the most successful basketball coach of all time, who said, “Failing to prepare is preparing to fail.”  

3.  Finally, just start.  That sounds simple, but when any of us faces the uncertain future and the risks that are involved in trying to make a dream that matters to us come true, it is very easy to say, “I’ll start first thing tomorrow.”  Procrastination is the greatest thief in the world; it steals our lives, one day at a time.  Whatever your age or circumstance, you have the power right now to begin reshaping your life for success.  Just begin—now.

Episode 20: Take Responsibility, Don't Blame

Dream Toolbox - Take Responsibility - Don't Blame

In life, lots of things go wrong for every one of us.  What matters is not the event, but what we do with it.  Suppose, for example, someone you trusted steals from you and causes you real harm.  You have several choices:

1) You can blame the person who cheated you and always believe that, if not for that betrayal, you would have had wonderful success; 

2) You can blame yourself and believe that, but for your foolish trust, you would have had wonderful success;

3) You can take responsibility for what happened, evaluate what damage control needs to be done, what steps need to be taken to prevent a similar event in the future, and then move forward.

The first two alternatives focus on blame and the harm that someone has caused.  But blame creates weakness where what is needed is strength.  It does so because blame implies a victim—in this case, you. 

Responsibility, however, is very different. It simply recognizes that everything has a cause and sometimes that cause is something we did or didn’t do.  Sometimes it is just an external event like fire or flood. But even then, there may have been something we could have done or avoided doing that would have kept the fire or flood from harming us.

Taking responsibility doesn’t mean you are a victim.  It just means that you look at what happened and make decisions for the future.  Could I have foreseen what happened and prevented it?  If so, how can I avoid that mistake in the future and how can I solve the problems the mistake has caused?

Sometimes, you will realize that you made the very best decision you could have made with the available facts and that choice was just wrong. In that case, looking to blame yourself is not helpful.  There is an old saying to the effect that once a cat has been burned by sitting on a hot stove, it will never sit on a stove again.  But a wiser cat might instead just make the distinction between a hot stove that could burn it and a warm one that offers warmth and comfort.

If the decision was trusting someone who betrayed you, one choice would be to blame that person and avoid ever being vulnerable to that again by just doing the job yourself next time. A better choice would be to acknowledge that you were the one who made the choice to trust someone who betrayed your trust.  But instead of never trusting again and trying to do everything on your own,  a better alternative is to try to learn how to prevent the person you trust from doing serious damage if you are wrong.   Former President Reagan had a saying in negotiating treaties with potentially hostile governments: “Trust, but verify.”  All it really means is to give trust where needed to get a result but build in some protections if the trust is misplaced.

The message in all this is, except perhaps in a court of law, blame is a useless pursuit because it just makes you into a victim.  Responsibility, however, gives you power because it reaffirms that, ultimately, you and only you can decide what meaning to give to an event. You own it, so you can fix the problem, takes steps to prevent it from recurring in the future, and learn from it how to recognize and avoid different future, but similar risks.

Let me give you a very personal example.  Some time ago I was diagnosed with what is almost always a fatal and fast moving cancer.  I was told that an immediate, but dangerous surgery might save my life, but would involve a long and difficult recovery.  I was also told that some less drastic actions might also solve the problem, but only if the cancer diagnosis was wrong and that by the time I learned if the diagnosis was right or wrong, it might be too late.  Knowing that the chance that what I had was not cancer was only about 5%, I elected surgery.

I was incredibly lucky.  Mine was one of the 5% of similar tumors that was not cancer.  Great news!  Except that I lost a year of my life to recovery.  I had two choices: 1) look back and bemoan the fact that I had made the wrong choice, 2) see if there was anything I could learn from the decision process I had used; then just move on with life.  I chose #2 and am today happy and productive again instead of unhappy and probably not nearly as productive. Responsibility trumps blame every time.