Lewis Schiff: Why Some People Are Rich and Others Aren't

To understand how some people become wildly successful in business and why others fall flat, I spoke to Lewis Schiff. Lewis is the author of the new book, Business Brilliant: Surprising Lessons from the Greatest Self-Made Business Icons. He is also the  executive director of Inc. Business Owners Council, a membership organization for Inc. Magazine’s top entrepreneurs and owners of closely-held family businesses and maintains a blog about behavioral entrepreneurship on Inc.com. Schiff has also co-authored The Influence of Affluence: How The Rich Are Changing America and The Armchair Millionaire.

In this interview, Lewis talks about how the priorities of the middle class are different from the ultra rich, his seven principles that all successful entrepreneurs follow, the skills professionals need to focus on in order to succeed and more.

How are the priorities of the middle class different from the rich?

This is a great question that goes right to the heart of the matter. The middle class would prefer to remain in their “comfort zone” rather than prioritize wealth creation. For the self-made rich, following the steps that lead to wealth is more important than being comfortable.

A simple example: It’s a common myth that “you have to have money to make money.” Most of the 400 self-made wealthy I surveyed for Business Brilliant would prefer to have other people invest in their ideas. Why? First, it’s a good filter to see if others agree that the idea is worth pursuing; second, it helps the entrepreneur preserve their own capital. The middle class are less willing to ask other people for money because they fear being rejected or, if they find an investor, fear of letting that person (often a friend or family member) down. The self-made wealthy ignore this concern.

What are the seven principles practiced by the ultra successful entrepreneurs?

Do what you love, but always follow the money. This is in contrast to what the middle class believe which is. Do what you love and the money will follow.

Save less, earn more. This is in contrast to what the middle class believe which is that you can save your way to wealth by cutting back on life’s luxuries. The self-made wealthy are too busy trying to earn more money to worry about saving their pennies.

Imitate, don’t innovate. The middle believe you need a big idea in order to become wealthy. The self-made wealthy know that it’s the excellent execution of ordinary ideas that really creates wealth in America.

Know-how is good, “know-who” is better. The middle class are much more likely to rely on skills learned in school while the self-made wealthy are more likely to rely on leveraging opportunities that can be found by serving groups of people who need each other but don’t know each other.

Win-Win is a sure way to lose. Self-made millionaires are masters at negotiating. The middle class don’t seem to appreciate the value that negotiating can create and they certainly don’t know how to do it well!

Spread the work, spread the wealth. The middle class seem to be overly committed to shoring up their weaknesses in order to be well-rounded in their work. The self-made wealthy tend to focus on being good at a few things and delegating everything else that they’re not good at.

Nothing succeeds like failure. Based on my research, the middle class tend to pull back just when they’re about to be successful. That’s because most success stories are preceded by business failures–often crushing failures. Quitting after a setback squanders the opportunity created by adversity and the self-made wealthy know that persevering in the face of adversity is the key to success!

What three skills should professionals focus on to stand out and achieve career success?

1. How to ask for more and how to negotiate better.
2. How to develop their strengths and delegate their weaknesses.
3. The importance of perseverance in the face of adversity.

Does selecting the right friends have an impact on your success? Why or why not?

Social contagion is real. If you spend time with people who smoke, you’ll probably smoke, too. If you hang out with people who exercise, you’re more likely to exercise, too. If you want to be more successful, you must spend more time with people who are more successful, as well. Identify a mentor inside or out of your office. Minimize your time with people who view work as a burden. Put yourself in situations where you are  the least successful person in the room and soak up everything around you.

What are a few attributes you don’t need in order to be business brilliant?

First, be willing to accept that the way you’ve been doing things may no longer be sufficient to help you realize your goals of financial security and will probably leave you a long way from achieving true financial independence.

Second, be willing to put yourself in positions of vulnerability. The first time you try these business brilliant techniques, you may fail. That’s ok and to be expected.

If you are prepared to try those two behaviors on for a while, you have what it takes to pursue your own business brilliance!

Dan Schawbel is the author of the upcoming book, Promote Yourself: The New Rules For Career Success (St. Martin’s Press, Sept 3rd). Listen to his Promote Yourself Podcast on iTunes for more interviews and career advice.

http://www.forbes.com/sites/danschawbel/2013/03/28/lewis-schiff-why-some-people-are-rich-and-others-arent/

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Failing Forward: Transforming Mistakes into Success

by J.D. Roth)  @http://www.getrichslowly.org/

Sometimes the best personal finance books aren’t about personal finance.

In June 2006, for example, I shared a brief reviewof Steven Pressfield’s The War of Art. Ostensibly this book is about creativity and overcoming procrastination, but I found its lessons valuable for pursuing my financial goals. Last year I read Mastery by George Leonard. On the surface, this book has nothing to do with money, yet it’s one of the best books about money I’ve ever read.

John C. Maxwell’s Failing Forward is another of this ilk. It’s not meant to be a personal finance book, yet I’m willing to bet that more of you can improve your financial lives by reading it than by reading The Automatic Millionaire or Personal Finance for Dummies (though these are both fine books). Why? Because books like Failing Forward apply to your entire life rather than just one part of it.

Failing forward
I clearly remember a period during the late 1990s during which I felt like a failure. I felt washed up. I felt like I was sleepwalking through life, accumulating debt, eating too much, working in a job I hated. Every time I ate a hamburger or bought something on credit — or worse, bought a hamburger on credit — I felt this failure meant that I was a failure.

But what I eventually learned was that failing at one thing is not failing at all things. And, in fact, failure is a necessary part of growth. Life is filled with trial and error. In order to walk the path to success, you need to make some wrong turns along the way.

What I learned, to use John C. Maxwell’s terminology, was to “fail forward”, to use each mistake to make myself better. He writes:

One of the greatest problems people have with failure is that they are too quick to judge isolated situations in their lives and label them as failures. Instead, they need to keep the bigger picture in mind. [A successful baseball player] doesn’t look at an out that he makes and think of failure. He sees it within the context of the bigger picture. His perspective leads to perseverance. His perseverance brings longevity. And his longevity gives him opportunities for success.

There’s a reason that one of Get Rich Slowly’s core tenets is: Failure is okay. As I was paying off my debt, I made lots of mistakes. I still do. When I bought my Mini Cooper, for example, I didn’t do everything I could have done to get the best deal possible. That’s okay. I try not to let mistakes drag me down. Instead of focusing on the things I did wrong during that transaction, I remember that in the Big Picture, I’m doing awesome. And I’ll try to use my mistakes to do better next time.

Seven ways to fail forward
In Failing Forward, Maxwell writes that there are seven key abilities that allow successful people to fail forward instead of taking each setback personally. Successful people:

1. Reject rejection. Successful people don’t blame themselves when they fail. They take responsibility for each setback, but they don’t take the failure personally.
2. View failure as temporary. “People who personalize failure see a problem as a hole they’re permanently stuck in,” writes Maxwell. “But achievers see any predicament as temporary.”
3. View each failure as an isolated incident. Successful people don’t define themselves by individual failures. They recognize that each setback is a small part of the whole.
4. Have realistic expectations. This one is huge. Too many people start big projects — such as paying off their debt — with the unrealistic expectation that they’ll see immediate results. Success takes time. When you pursue anything worthwhile, there are going to be bumps along the way. And remember: The perfect is the enemy of the good.
5. Focus on strengths. This was one of the biggest lessons I took away from Tim Ferriss’ The 4-Hour Workweek. When I interviewed Ferriss last year, I asked him to expand on this idea. He told me: “Focus on leveraging and amplifying your strengths, which allows you to multiply your results. Fix any fatal weaknesses to the extent that they prevent you from reaching your goals, but perfection isn’t the path to your objectives; finding ways tocater to your strengths is.”
6. Vary approaches. “Achievers are willing to vary their approaches to problems,” Maxwell writes. “That’s important in every walk of life, not just business.” If one approach doesn’t work for you, if it brings repeated failure, then try something else. Maxwell is saying that to fail forward, you must do what works for you, not necessarily what works for other people.
7. Bounce back. Finally, successful people are resilient. They don’t let one error keep them down. They learn from their mistakes and move on.

These seven points form a firm foundation for dealing with failure in all parts of life, including personal finance. As you pay off your debt, as you learn to invest, as you cut your spending, remember that some failure is inevitable. But you are not your mistakes. Own them, learn from them, and move on. Continue to pursue your goals.

Stepping stones to success
Maxwell peppers his book with anecdotes from celebrities, entrepreneurs, and famous people like Edison and Mozart. He uses their stories to illustrate how successful people don’t let failure trap them; they “fail forward” instead. He also cites scientific research and shares stories from his own life.

Failing Forward is a motivational book, one that helped me break out of a funk and put me in the right frame of mind. Reading this helped me realize — again — that failure isn’t an end. It is, as Maxwell notes, just a stepping stone to success.

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