Sunday, October 7, 2012

Advice from Jean Paul Getty

Jean Paul Getty's Secrets to Wealth: 8 Strong Rules for Acquiring or Creating Wealth.

Rule No. 1: To acquire wealth today, you must be in your own business.

The first rule to creating wealth is to start your own business. In fact, it’s the most important among all the secrets to wealth. You may think that the corporate executive with a $100,000 salary is better off than small shop owner, but the executive will be hard-pressed to double his income and taxes will eat up most of any increase.

Building a business is probably the best investment opportunity with the highest returns on investment. The simplest peanut vendor has unlimited opportunity to expand his business and his income and even salesmen; who in most cases are able to write their own paychecks, can control their sale increases.

Rule No. 2: You must have adequate knowledge of the business.

"Risk comes from not knowing what you are doing." – Warren Buffett

You must have a working knowledge of the business when you start and continue to increase your knowledge of it as you go along. If you don't know what you're doing when you start; your mistakes will be costly and often unnecessary, and you won't be able to keep up with the technological explosions in any field. Start smart and stay that way.

"One of the most stupid things to do is to pretend you are smart. When you pretend to be smart, you are at the height of stupidity." – Rich Dad

Rule No. 3: You must learn to save money.

You must save money in your personal life and in your business venture as well. Discipline is the key to saving money. You must develop the will power to deny yourself immediate gratification or the temptation to gamble on the quick buck. Resources will be needed for expansion and should be guarded carefully.

Rule No. 4: You must take risk.

"To win big, you sometimes have to take big risks." – Bill Gates

This is another hard core secret to wealth. In fact, it’s the singular difference between the rich and poor. You must take risks, both with your own money or with borrowed money. Risk-taking is essential to business growth. Nelson Bunker Hunt is admired for his guts in trying to corner the silver market; not scorned for losing money on this deal. Some of the richest men have staked their entire fortunes and lost, several times over, before the risk-taking paid off.

"In today's rapidly changing world, the people who are not taking risk are the risk takers." – Robert Kiyosaki

When taking risk, back it with good judgment, experience, commitment, and the right support. Always seek advice on risks from the wealthy who still take risks, not friends who dare nothing more than a Football bet.

“Before making an important decision, get as much as you can of the best information available and review it carefully, analyze it and draw up worst case scenarios. Add up the plus or minus factors, discuss it with your team and do what your guts tell you to do.” – The Mafia Manager

Rule No. 5: You must learn to live with tension.

"Yet a little sleep, a little slumber and a little folding of hands to sleep; so shall your poverty come." – Proverbs 6: 10-11

You must not only learn to live with tension, you must seek it out. Thrive on stress! Even If it means getting physically fit, having a psychiatric overall or losing 50 pounds before you can handle it, do it. Once you can learn to thrive on stress, you will not only enjoy it, you will seek it out willingly and enthusiastically.

Men of means look at making money as a game which they love to play. Consider it serious business and you will suffer far more stress than you need or want. Keep your perspective or your stress level will rocket beyond your control.

“Work hard, have fun; make history.” – Jeff Bezos

Rule No. 6: Build wealth as a by-product.

"Wealth like happiness is never attained when sought after directly. It comes as a product of providing useful service." – Henry Ford

Build wealth as a by-product of your business success. If wealth is your only object in business, you will probably fail. Wealth is only a benefit of the game. If you win, the money will be there.

"Every few seconds it changes, up an eighth, down an eighth. It's like playing a slot machine. I lose $20 million, I gain $20 million." – Ted Turner

"I don't make deals for the money. I've got enough much more than I’ll ever need. I do it to do it." – Donald Trump

Rule No. 7: You must be patient.

"I never attempt to make money on the stock market. I buy on assumption they could close the market the next day and not re-open it for five years." – Warren Buffett

Patience; it’s the most important attribute to creating wealth, it’s the greatest business asset. Wait for the right time to make your moves. Let your business grow naturally, not by pressing your luck.

Rules No. 8: Diversify.

"If you are moving, even fire will not hurt you. If you are standing still near the fire, even though you are not in the fire, the heat will eventually get to you." – Rich Dad

Diversify at the top; this is the last rule to creating wealth and one of the essential secrets to wealth. Once you've made it, you'll understand that any business is limited in the challenges it offers. You'll want and need other games to play, so you'll look for other ventures to hold your interest. Take a look at the richest people in the world and you will see they have a well diversified portfolio of investments ranging from businesses to stocks, real estate and commodities.

"I think you might see us growing much deeper into banking. You might see us acquiring companies in the banking area. You might see us acquiring companies in the retail area. I think you might see us acquiring companies in the telecommunications. I think you will see us getting stronger in business intelligence." – Larry Ellison.-

On how Jean Paul Getty made his millions


Shrewdly investing his resources during the Great Depression, Jean Paul Getty acquired Pacific Western Oil Corporation, and he began the acquisition (completed in 1953) of the Mission Corporation, which included Tidewater Oil and Skelly Oil. In 1967 the billionaire merged these holdings into Getty Oil.

Beginning in 1949, Getty paid Ibn Saud $9.5 million in cash and $1 million a year for a 60-year concession to a tract of barren land near the border of Saudi Arabia and Kuwait. No oil had ever been discovered there, and none appeared until four years and $30 million had been spent. From 1953 onward, Getty's gamble produced 16,000,000 barrels (2,500,000 m3) a year, which contributed greatly to the fortune which made him the richest person in the world.

Getty increased the family wealth, learning to speak Arabic which enabled his unparalleled expansion into the Middle East. Getty owned the controlling interest in nearly 200 businesses, including Getty Oil. Associates identified his overall wealth at between $2 billion and $4 billion. It didn't come easily, perhaps inspiring Getty's widely quoted remark—"The meek shall inherit the earth, but not the mineral rights."