Deep Blue Publications Group LLC, 9 Tips on Getting Rich From the Greatest Showman of All Time
P.T. Barnum knew how to make
money. By the middle of the 19th century, the master showman had become
America's second millionaire, and his estate was valued at over $10,000,000
prior to his death in 1891.
Fortunately for us, Barnum – who
is still remembered today for his "greatest show on earth" -- shared
his secrets for getting rich. In the short work "The Art of Money
Getting" published in 1880, he laid out his rules for creating wealth.
After reading them, I was struck by how applicable they remain today. Here are
nine golden rules for making money, according to Barnum.
1. Spend
less than you earn. Barnum writes that the key to wealth is quite simple:
"it consists simply in spending less than we earn." Despite the
simplicity of this maxim, he notes, "more cases of failure arise from
mistakes on this point than almost any other."
The problem is that we need to be
focused on both our expenditures and our income. Barnum shares an instructive
story about a woman who cut her expenses by refusing to burn candles in the
evening. She may have saved five or ten dollars by doing so, but she lost out
on the knowledge she would have gained by reading during those hours. That
benefit would have outweighed "a ton of candles." The bottom line for
Barnum is that "true economy consists in always making the income exceed
the out-go."
2. Take care of your health. Good health
is the foundation of success in life and is also the basis of happiness,
according to Barnum. Without good health, a person is very unlikely to
accumulate a fortune – he'll have "no ambition; no incentive; no
force." He recommends avoiding alcohol and tobacco, while also making
other healthy choices when possible.
Barnum was ahead of his time on
this important issue. Health is a key component of personal finance. A
University of Michigan health and retirement study in 2002 supports that view:
it found that the mean household wealth of married couples reporting excellent
health was approximately three times that of married couples reporting poor
health (an average of $500,000 compared with $164,000). Living a healthier life
is one of the easiest steps we can take on the road to building our wealth.
3. Persevere. To illustrate this rule, Barnum
shares a line from Davy Crockett, "This thing remember: when I am dead: Be
sure you are right, then go ahead."
Everyone must actively cultivate
a sense of "go-aheaditiveness," according to Barnum, and must not
become overwhelmed by the "horrors" or "blues." He found
during his business career that many men gave up right before they would have
reached their goal. Everyone will encounter difficulties and challenges – it's
how you respond that determines whether you'll succeed or not.
4. Be cautious and bold. This one
appears to be a paradox, but it is not, writes Barnum. He believes "you
must exercise caution in laying out your plans, but be bold in carrying them
out." A man who is all caution won't take on the risks necessary for
success, while a man who is "all boldness, is merely reckless, and must
eventually fail."
This rule is particularly
relevant for the investing world. The very act of investing in stocks is a
risky endeavor, as anyone who lived through the recent financial crisis of
2008-2009 knows all too well. And yet, stocks have delivered great returns for
investors over the long term, and have been a tremendous way for ordinary
people to create wealth for their families.
5. Use the best tools. Barnum
believes that workers must always have the very best tools to do their work. As
a businessman, he feels there is no tool he should be, "so particular
about as living tools." When looking for employees, therefore, one
"should be careful to get the best."
Barnum observes that good
employees get more and more valuable each year, and that retaining them should
be a priority. Recognizing the importance of your human assets – which Costco
(NASDAQ: COST ) and Starbucks (NASDAQ:
SBUX ) , for example, certainly do in
today's marketplace – is an often overlooked strategy for creating long-term
value.
6. Be focused. Barnum urges the
aspiring entrepreneur to focus on "one kind of business only, and stick to
it faithfully until you succeed, or until your experience shows that you should
abandon it."
This rule is related to
persistence in that sometimes we have to keep at just one thing until we're
successful. Barnum warns that "many a fortune has slipped through a man's
fingers because he was engaged in too many occupations at a time." As
Steve Jobs realized, focus sometimes means "saying no to the hundred other
good ideas that there are."
7. Advertise your business.
Barnum was a remarkable pioneer in the field of advertising. For one of his
promotions, he was able to transform a five-year-old dwarf named Charles Sherwood
Stratton into "General Tom Thumb, Man in Miniature." Tom Thumb
eventually became a gigantic hit in Europe, and was received by Queen Victoria
and numerous other crowned heads-of-state.
Barnum believed strongly that you
had to let the public know if you have something that will please potential
customers. Without promotion, you will receive no return, even if the item in
question is potentially quite valuable. When it came to advertising, Barnum was
always willing to invest heavily upfront whenever he knew he had something
people would enjoy. Nowadays, each of us should be willing to invest in
ourselves or our business whenever we believe doing so will deliver larger
rewards down the road.
8. Be polite and kind to your
customers. P.T. Barnum actually never said "there's a sucker born every
minute." Instead, he had great respect for his customers. He writes,
"the man who gives the greatest amount of goods of a corresponding quality
for the least sum (still reserving for himself a profit) will generally succeed
in the long run."
He didn't think you could get
away with not providing quality and value to customers, saying "people
don't like to pay and get kicked also." Instead of thinking his customers
were suckers, he thought they were deserving of respect and tolerance, since
the customer is the man "who pays, while we receive."
9. Preserve your integrity.
Barnum concludes his work by saying to all men and women, "make money
honestly." He sincerely believed that the desire for wealth is laudable as
long as the "possessor of it accepts its responsibilities, and uses it as
a friend to humanity."
This final rule, in relation to
Barnum's career, requires some context. In a lot of his promotions, he was
known to bend the truth somewhat, so "integrity" might not have been
the first word that came to the mind of his contemporaries. For example, he
once exhibited an African-American woman who was supposedly 161 years old, and
was formerly George Washington's nurse. When challenged about the truth of this
promotion, he replied, "the story seemed plausible."
Despite Barnum's occasional
"humbug," Brenda Wineapple, author of Ecstatic Nation: Confidence,
Crisis, and Compromise, 1848-1877, points out that he had a keen sense of civic
duty, and truly wanted to educate and delight his customers. In the end, Barnum
believed that "money-getters" were benefactors for mankind. In his
particular case, I think he was right.
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