Sunday, 5 October 2008

How To Get Rich

Early last Friday, I was pacing about in the bookshop at Luton Airport, waiting for my mate, Jonny to appear, en route to a weekend break in Barcelona. A weekend break really does mean a break – from everything. It’s a chance to get out of the capital of Rat Race and chill by a pool, eat food, eat more food However, crucial to this plan of action is an enjoyable book and so as I paced, I searched the shelves of the airport’s bookshop for something suitable.

What I was hoping was for a book to beckon me like a shining light, something compelling and intriguing, literally begging to be read. Unfortunately, my luck was clearly shot because absolutely every single book in that shop looked to be a piece of trash – and not good trash but bad, boring, life wasting dross. I simply couldn’t find anything interesting and by the time my long suffering pal had located me, I was beginning to panic. Screw the credit crunch; I couldn’t sit on a Barcelona hotel sun terrace just picking my nose and belching. My mind needed to be gainfully occupied.

As the plane was about to leave and Jonny was very hungry indeed, he displayed little patience for my dithering. He quickly surveyed the cramped shelves, snatched a book down and made me pay for it. It was decisive action. We rapidly grabbed a couple of smoked salmon sandwiches from Pret a Manky and boarded the Easy Jet plane to Barcelona.

Now, I could very easily write a couple of blogs explaining how flipping difficult it is for a six foot seven inch, 250 pound man to get on a tiny Easy Jet plane and the supreme grovelling skills required to get decent seat. But I’m not going to do that right now, dear reader. I’d like to discuss the book I’d bought.

You see, my buddy and I were in such a damn rush to get fed and boarded, I hadn’t actually checked what book he’d forced me to buy. When I finally did manage to sneak a peak, I saw that it was How to Get Rich by Felix Dennis.

The book, published in 2006, describes Dennis as a poet, publisher and planter of trees. His Wikipedia entry also describes him as a philanthropist and the first man to say the “c word” on television (on a live 1970 edition of David Frost’s The Frost Programme). The Sunday Times Rich List 2007 ranked him joint 95th with a fortune estimated at £750 million. This is serious wealth. He is also described as dividing his time between homes in Mustique, New York, and Britain.

When I asked Jonny why he made me buy a book with such an embarrassing title, he replied that Dennis was a “geezer” and worth paying attention to.

Ordinarily, I never would buy a book like this. I don’t, as a rule, like self-help books which I think, in attempting to appeal to a mass audience cannot simultaneously deal with the intricacies and complexities of each individual reader. In particular, I have little time for the numerous get rich publications. I just assume they are published to make an already financially successful author, even more financially successful.

Like many things in life, I think the ability to make large sums of money is something you either have or don’t. You can’t for example buy a book to teach you how to be witty, you either are or you aren’t. A book can divulge academic knowledge or it can entertain you or it can make you look at things from an entirely different perspective but it cannot change who you are genetically. That’s nature, or if you like, God’s job.

Having said all that, I didn’t have anything else to read so I gave it a go. At this point, I have to say thank you to my canny friend who I suspect knew exactly what he was doing.

How to Get Rich is a very interesting book, extremely frankly and entertainingly written. Unlike Richard Branson, Dennis is an entrepreneur who started in the early 1970’s with absolutely nothing and proceeded to make, as well as spend, hundreds of millions of pounds. Why is it so interesting?

Well, firstly, how many people do you know who have made (or spent) that kind of money? Not alot, I bet. (Funnily enough because of my profession, I know a few, including one or two billionaires but I’ll come to that in a minute). The book distills 40 years of learned wisdom into 300 compelling pages.

Secondly, it clearly demonstrates the mindset you have to adopt if you genuinely want riches (which Dennis defines as a minimum of £15m to £40m). This has to be a combination of an absolutely focused determination (to the exclusion of virtually everything else, including sometimes health and relationships), a crocodile thick skin together with – incredibly – the wisdom that the accumulation of immense wealth is just a game, chum.

Dennis agrees that this type of steely personal trait is partially genetic but believes that making money is a knack that you can acquire.

The book is full of valuable lessons including (to name just a few) always retain ownership, delegate cleverly, recruit young talent, toady to greed and watch overhead. Dennis teaches how to learn from failure and retain your wealth, once finally achieved. He also says that extremely few people get rich through having a great idea or just being lucky. To quote that terrible cliché: it's one percent inspiration and ninety nine percent perspiration.

To paraphrase F. Scott Fitzgerald in The Great Gatsby, the very rich are different to you and me. Of course, this does not mean that they are physiologically different from the rest of mankind. However, one thing I have noticed about the financially blessed is that they have an innate confidence which can be observed no matter whether they were born rich, inherited it or aquired it through their own efforts.

By the way, Barcelona was truly wonderful. I think it’s the most beautiful city in the world and even more enjoyable when you have the company of a good book.

Wednesday, 1 October 2008

I Predict More Predictions

If you’re not well, one of the first things you'll want to know is when will I get better? It's human nature to ask how long your suffering will continue and when respite will eventually arrive. To get an accurate answer, you can ask a friend or relative who has experienced something similar. Or if it’s a more unusual condition, you are entitled to ask a doctor, search the internet or read a medical book. You can also seek a second or third opinion, or pay a fortune to a specialist.

But what if the truth is no one knows. Are you happy to be fobbed off or accept the discomfort of uncertainty?

Whenever you ask someone for a forecast, you are making a fundamental assumption that they know something you don’t. They have superior knowledge, or intellect, or expertise or machinery that allows them to analyse a bunch of possibly complex factors, or variables and then make a prediction. However, an assumption is a terribly dangerous thing. During the Vietnam War, a sign was kept nailed above a particular marine commander’s desk which said: “Assumption is the mother of all f***-ups.” Those seven words should be nailed above the desk of every Prime Minister and President of the United States, especially now.

A fortnight ago, I was watching BBC24. A Wall Street financial analyst was asked to comment on the latest bit of terrible news to hit the markets. He did a proficient job before being asked “and how much longer will this all go on for?” Without any hesitation, the analyst gave some half spun yarn about matters getting worse before they got better and concluded everything would be fine within the next couple of years. I shook my head. To be fair to the BBC interviewer, he was, as noted above, merely seeking respite to an ever worsening financial situation. And, while we’re at it, in fairness, the Wall Street analyst is a highly paid talking head whose business is to provide economic forecasts. But his business is a foolhardy and arrogant one. For the truthful answer to the interviewer’s final question was, “I’m afraid I don’t have a clue” Unpalatable but true.

A few weeks ago, my September 12 blog “Thoughts on Eastenders and the Credit Crisis” was considered for publication by the Legal Gazette. However, the editorial team wanted the following removed:

“Expert” predictions in newspapers are ten a penny and usually completely worthless. The truth is absolutely no one knows how long this unholy mess will drag on for. Indeed, for all we know, it could continue for at least another decade. Accurate forecasts are virtually impossible due to the complexity of the issues involved and the consistent possibility of unforeseen random events that can powerfully affect the economy.”

It is fairly obvious why they found this paragraph distasteful. Newspapers, magazines and documentaries thrive on “expert” predictions, notwithstanding the fact that the vast majority of “experts” could not predict a snowstorm in the Arctic. (However, I should add, another professional journal, Estates Review, agreed to publish the article in full.)

Interestingly, the Council of Mortgage Lenders finally became aware of the sheer uselessness of making housing predictions after all their forecasts were rapidly disproved. Finally and incredibly, on the 24 September, they admitted that house price predictions were “futile”.

Let’s be clear, there are some things that can be predicted in newspapers – they are good at getting cinema and theatre viewing times correct. But social, economic and housing matters, to name just a few, are complex and variable fields and no mortal can accurately foretell their long term future. How many people predicted 9/ll, the First World War, 1987 Black Monday, or even the rise of the personal computer and internet? Extremely few.

The credit crunch is a crisis that continues to unfold rapidly but no one knows where it will lead or when it will be resolved. Let us have some humility and accept this. For all we know, the crisis could lead to world war, another holocaust, the destruction of capitalism or the coming of the Messiah. We don’t know. We just don’t. But there is one thing I can confidently predict – more predictions.