Editor’s note: This article was first published in April 2022. Its view of crypto as the industry attracting the most new money, and its prediction that hype merchants would soon be selling the metaverse, reflect that moment. Felix Dennis died in 2014.
Of all the tips, steps or secrets on how to get rich out there, Felix Dennis’s advice may be some of the most sensible and logical you’ll read in a long time.
Despite the title of this article, though, the truth is that there are no secrets to getting rich. There are only models that move you in the right direction.
In Felix Dennis’s own words, more or less:
Looking for the “secret” to getting rich is not a sensible exercise. If such secrets exist, I’ve never discovered them. But since humans love lists and “secrets”, here you have them. The essence, so to speak, of what I’ve learned along the way.
Felix Dennis went on to become one of Britain’s biggest entrepreneurs and one of the richest men in England, even though he started from nothing. He wrote several books about getting rich, but the curious thing about him is that in his book How to Get Rich he spends more than half the book advising you not to chase wealth, because it probably isn’t worth it.
But if you decide to ignore that advice and want to get rich, these are the tips he gives us. Every one of them is worth reading.
1. Work out why you want to get rich, and understand that desire isn’t enough: compulsion is mandatory
To get rich you need to be compulsive about it, but most importantly you need to know exactly why you want it. There are several things you need to understand.
Wealth won’t necessarily bring you happiness. The proof is the countless music and film stars who end up even losing their minds.
Wealth won’t bring you better health either, although you’ll have far more financial means to pay for more expensive treatments.
Nor will it bring you better romantic relationships. Often the exact opposite happens: you end up meeting people who wouldn’t be with you if it weren’t for your money. In other words, wealth often leaves you with a gold digger.
And wealth certainly won’t bring you peace.
Once all this is clear, you need to consider whether you really want to chase wealth and whether it’s really worth it, because you may naively think that more wealth will make your life better when, in many cases, chasing wealth brings exactly the opposite.
That’s why the irony of Felix Dennis’s book is that he spends half of it trying to talk you out of trying, throwing several warnings at us.
This is roughly how Dennis puts it:
I hope this book makes you think very carefully about whether your inner demons really drive you to be rich. If they don’t, my sincere advice to you is not to attempt it under any circumstances.
What is wealth anyway, compared with health and the peace of mind that even a modicum of contentment brings? Great wealth rarely, if ever, brings real contentment in itself.
Wealth gives you only one thing: freedom. If freedom is what you want, becoming independently rich is the only way to get it.
These words are certainly worth bearing in mind.
2. Free yourself from negative influences. Don’t give up and stay the course
Most of your friends, believe it or not, will be annoyed by your progress. They don’t want you to get rich. Make no mistake. They probably want to see you happy, but not happier than them. They want you to make progress if they can benefit from it in some way, but under no circumstances do they want you to get further than them, because your success holds up a mirror to what they haven’t managed to achieve.
With family it’s different. At least with part of the family. The relatives who truly love you probably won’t want you to chase wealth because you’ll have to take a lot of risks, and they’ll genuinely worry about you. They want you to be very successful, but they don’t want to see you ruined, because deep down they really think you won’t make it. In many cases they think you’ll take risks and lose.
In both cases, you can’t let yourself be influenced either by the relatives who want you to succeed but also want to protect you, or by the friends who want to see you happy but secretly hope you’ll crash. You have to stay your course.
Getting rich is a lonely undertaking. Most of the people you meet have no interest in it. That’s why the internet has become a powerful tool for connecting with people who want to follow that path.
Use those people, use the stories of people who are making the same journey as you, because that will help you keep your confidence that, if you do things right, anything is possible. And it will also help you remember why you set out on this journey.
And always remember that success isn’t linear. There are plenty of bumps, ups and downs along the way. In fact, you’ll have to glimpse the darkness before you see the dawn. Very few people can bear that darkness, but if you’re willing to, if you’re willing to bear the darkness even knowing there’s a chance you won’t see the dawn, you’ll have a better chance of achieving your goal.
To put it in a simpler, less poetic way: if you accept that there’s a high chance you might fail, and that you could live with that failure without it crushing you, this journey is for you.
Stay in the game, stay your course and run from negative influences.
3. To get rich, keep your eye on the ball marked “The money is here”
This is easy to understand. If you want to fill a bucket with water, it’s easier to fill it in a river than in a puddle. If you want to get rich, go and look for water where you can fill the bucket most easily.
It’s much easier to get rich in a growing industry full of new money than in a saturated industry, or one whose business is shrinking or even about to disappear.
The people who know this best are the snake-oil sellers. They ask themselves: what are people paying for right now? What are people interested in? That’s why you see many hype merchants who a few years ago talked about personal development, sales or seduction, then moved on to health or finance, and finally jumped to trading or crypto, the latter being the industry attracting the most new money.
Soon, most hype merchants will be selling something to do with the metaverse.
And here Felix Dennis describes the ideal industries for getting rich rather well. In his view:
New industries offer us three things:
- People willing to risk capital.
- The power of a rising tide.
- The ignorance of the masses.
If you position yourself correctly in an industry like that, you may well find yourself making a lot of money, even if only by luck. And that’s where you need to be.
To be clear, Felix doesn’t say this so that you’ll deceive people, but as a way of adding value in an industry where people are going to need your services or knowledge.
The problem is that today, entrepreneurs entering these industries do so with the idea of making as much money as possible while there’s still cake to share, even if it means inflating the prices of the courses or services they sell.
These hype merchants know that as supply grows, prices will fall to satisfy demand that now has many more options to choose from.
That’s why it isn’t just whoever enters a new industry who gets rich: whoever gets in first gets much richer and much more easily, mostly because they have the “ignorance of the masses” factor on their side.
Basically, he’s telling us to start a business wherever the money is gravitating at that moment.
4. Ignore great ideas and focus on great execution
The truth is that, ultimately, what you do matters much less than how you do it.
Execution beats desire and obsession.
Here Felix Dennis gives the examples of both Henry Ford and Bill Gates. Paraphrasing his point:
Their ability to take risks and then exploit their initial success mattered more than their leaning towards any particular industry. Their execution of a strategy triumphed over desire and obsession.
Great ideas are a dime a dozen. But when you combine a great idea with above-average execution, that’s when things start going your way.
5. If you want to get rich, learn to share the pie. In other words, learn to delegate and hire
The secret of wealth is using leverage correctly. The day has 24 hours, and nobody has an advantage that lets them make the day any longer. The only way to do more in those 24 hours is to use leverage, which basically means having more resources: capital, labour and means in general.
In a technological age, you need to learn to automate everything that can be automated, and if you want to get rich, you’ll have to learn to hire other people. Here Felix gives you a good piece of advice you probably already know, but it never hurts to repeat it: if you’re going to hire someone, make sure that person is smarter than you at the job you’ve hired them for.
Apple’s success didn’t lie in Steve Jobs’s talents. Remember that Steve Jobs had no idea how the products he sold worked on a technical level. Steve Jobs’s success lay in collaborating and knowing how to hire the right people.
Here’s Felix Dennis’s view, in short:
If you have trouble delegating, getting rich won’t be an option for you. You have to learn to let go and let others shine at what they do best.
6. The real secret is ownership. Hold on to every percentage point you can
In this respect, equity is everything. The only way to get rich while you sleep is to own a share of a business or a product.
You get rich while you sleep in the following ways:
You can own a business.
You can own shares in another business that’s just starting out.
You can buy shares in a listed company.
And you can own “shares” in a product, whether it’s intellectual property, a patent, books, scripts or works of art. We saw this when we talked about ways to earn passive income by creating assets.
Here is the gist of what Felix Dennis says:
In the race to get rich, nothing matters except what you own. If you don’t have much skill, much wit or much talent, and yet you insist on owning far more than other people of the shares in a leading company, an acquisition or any thriving business, then you can become very rich.
If, on the other hand, you settle for what you’re given, you probably won’t get rich. It’s hard to own wealth while working for someone else. Realising this made me rethink my whole career. If you own nothing, you’re forced to trade your time for money for the rest of your life. And that’s what you should try to avoid, as long as you’ve decided that the pursuit of wealth is your goal.
7. Sell before you need to, or when you’re bored. And clear your mind when negotiating
This may be one of the best pieces of advice Felix Dennis gives us, and unfortunately many people learn it the hard way.
See also: The personality traits you need to become a millionaire, according to the most robust study to date
Never forget your goal: to get rich, to build wealth. So if you can make a great sale of something you’ve built, just do it. And do it before you need to. Let me explain. It’s better to sell from a position of strength than to wait until you need the cash. Negotiating from a position of weakness will always cost you if the person across the table is in no hurry to close the deal.
An example makes this much easier to understand. Today everyone says how foolish YouTube’s founders were to sell the video platform to Google, but the truth is the original founders would probably never have been able to turn YouTube into what it is today.
Dennis’s advice, roughly:
Try to sell before you need to. You’re an entrepreneur, and your companies are not your babies. They’re simply tools that serve one purpose: building wealth. Try to sell them before they peak. Buyers need something called “blue sky”: they love buying something they can see still has room to grow.
That way, buyers get excited about buying the business and end up offering a higher price.
Back to the YouTube example. Just before it was bought for more than a billion, the video platform wasn’t really worth a cent, since it was only making losses. Its founders couldn’t make a profit from it, so all they had was costs.
In other words, Google didn’t buy YouTube for the business itself, but for the business potential it could get out of it. That’s why it paid $1.65 billion. It was a fortune for the platform’s founders, but a bargain for Google, which could get much more than that out of it.
Other examples of this advice in action are Mark Cuban and Elon Musk, who built smaller companies and sold them for millions before creating their biggest and most profitable companies. That’s how wealth is built in a technological environment that moves so fast.
It’s about building something, showing its potential and getting it off your hands, passing the ball to someone who knows how to score more goals, before that business idea gets eaten. A clear example is the well-known Tuenti (a Spanish social network) and the smartness of its creator, who sold it to Telefónica for 70 million before it was crushed by Facebook.
And Felix Dennis’s best advice on fear in business
Don’t be afraid of anything. In business you can succeed or you can fail. Tough luck, my friend. Life’s a bitch and then you die. Get used to it. You can’t banish fear, but you can face it, stamp on it, crush it, bury it and leave it there; what you’ll never manage is to make it disappear.
Fear will always be present in everything, but it can’t paralyse you, just as you know you’re going to die one day and you don’t stop living because of it.
And those, basically, are Felix Dennis’s tips on how to get rich.
See also: The secret of self-made millionaires
Featured image: Miscellaneous Items in High Demand, PPOC, Library of Congress, Public domain, via Wikimedia Commons.
