The Ten Roads to Riches

The Ways the Wealthy Got There (And How You Can Too!)

Kenneth L. Fisher, Elisabeth Dellinger, Lara W. Hoffmans

• Publisher: Wiley
• Year: 2017
• ISBN:
  9781118445037
• Edition: 2
• Topic: Business
• Subtopic: Business Biographies
• Index: Business

Profiles of some of America's richest people and how they got that way—and how you can too!

While we can't promise that this book will elevate you to the ranks of the super-rich, we can say that within its pages you'll discover everything you need to know about how, exactly, many of America's most famous (and infamous) millionaires and billionaires acquired their fortunes. The big surprise is that all of the super-wealthy it profiles got where they are today by taking one of just ten possible roads—including starting a business, buying real estate, investing wisely, and marrying extremely well. Whether you aspire to shameful wealth or just a demure fortune, bestselling author and self-made billionaire, Ken Fisher, will show you how to walk in the footsteps of tycoons—all the way to the financial success you dream of and deserve.

• Packed with amusing anecdotes of individuals who have traveled (or tumbled) down each road to wealth
• Extracts valuable lessons on how you, too, can achieve serious wealth, and, just as importantly, hold onto it
• Provides powerful tools for determining what you need to do to position yourself for success and "Guideposts" and "Warning Signs" to help keep you safely on your road to success
• Second Edition features more profiles and instructive examples than were found in the bestselling first edition

1
THE RICHEST ROAD

Have a compelling vision? Leadership skills? An understanding spouse? You just might be a visionary founder.

This is the richest road. Founding your own firm can create astounding wealth. Eight of the 10 richest Americans did this, including Bill Gates (net worth $81 billion), Amazon maestro Jeff Bezos ($67 billion), Facebook titan Mark Zuckerberg ($55.5 billion), Oracle CEO Larry Ellison ($49.3 billion), info magnate and former New York City mayor Michael Bloomberg ($45 billion), and Google wunderkinds Sergey Brin and Larry Page (around $38 billion each).¹ Close behind are gambling magnate Sheldon Adelson ($31.8 billion), Nike’s Phil Knight ($25.5 billion), financier George Soros ($24.9 billion), Dell’s eponymous founder, Michael ($20 billion), Tesla visionary Elon Musk ($11.6 billion), and many of the richest Americans from nearly every industry and angle.² Even better? These folks get wealthy and spawn rich ride-alongs, too. (See Chapter 3.)

This road works with scant restriction by industry, education, or pedigree—PhDs and college dropouts are equally welcome. Continental Resources founder and CEO Harold Hamm ($13.1 billion) was the son of Oklahoma sharecroppers, grew up dirt-poor, and never went past high school.³ Instead he pumped gas, drove trucks, and learned the oil industry ropes. Now he’s known as the “world’s richest truck driver” and the titan of the Bakken shale.

Be warned: This road isn’t for the fainthearted. It requires courage, discipline, Teflon skin, strategic vision, a talented supporting cast, and maybe luck. Those lacking entrepreneurial spirit needn’t apply—nor fear-driven folks.

Make no mistake, it’s tough. Few new businesses survive more than four years.⁴ But starting a business is the American Dream. Succeeding is the realm of supermen and superwomen. The key to success is a novel twist making what you do different—the difference that works.

Are you a person who can’t be stopped? Can you, as Phil Knight would say, “Just do it”? You must be great at your core business and the business of business. Vision alone won’t do! You need acumen, charisma, tactical thinking, and leadership skills. I’ve never met a successful founder whom folks didn’t want to follow. They’re just super. They know their product cold. They’re skilled at sales and marketing. They become great delegators. They also build a common culture into repeated waves of new employees so their firm takes on a life of its own beyond the CEO. This is a tall order.

Before you start down this road, you must answer five critical questions:

1. What part of the world can you change?
2. Will you create a new product or innovate an existing one?
3. Will you build a firm to sell or one to last?
4. Will you need outside funding, or can you bootstrap?
5. Will you stay private or go IPO?

PICKING A PATH

First question—what part of the world can you change? Make no mistake, founders create change, be it little or big. Ideally, you can create change where you’re passionate. Change creates value even in lousy industries. Changing lousy to not-lousy is huge! Or if you aren’t really passionate about something, it might be OK just to follow the money—focus on high-value areas. For this, flip to our Chapter 7 exercise on how to determine what fields are most valuable.

You can also focus on sectors likely to become more relevant—in the United States and globally. For example, service industries have grown tremendously—indeed, America’s economy is almost 80 percent services.⁵ Technology will become more critical, not less—count on it—and with it cybersecurity. Same with health care—good or bad economy, we still want ever more medication. Financials took it on the chin in 2008, but folks always need to invest and borrow—particularly entrepreneurs starting firms. These are all areas likely to become more relevant.

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Pick a field that will only become more relevant.

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Or flip this concept a bit and focus on industries likely to become less relevant. Now, I’m not forecasting what happens to any industry in the next few years, but long-term, firms in unionized fields (like autos and airlines) die a slow and painful death, have lousy stock returns, and ultimately get replaced by something—somehow, some way—that sidesteps unions. Maybe you want to start the firm that creates the change and does the replacement. Think: Which industries need an Uber?

Start Small, Get Bigger—Always Think Scalability

Starting small is best. Few set out to found the next Microsoft—they start tinkering with computers in Mom’s garage. When I started my business, I started small. If you had asked me then if I’d be running a firm as big as it is today, I’d laugh. Start small, get bigger—always think about scalability. If your business is a hit, will it be foiled by its own success?

For example, a dry-cleaning facility is small. Demand is fairly inelastic—folks always need clean clothes, even in bad times. And it’s easy entry. But for these same reasons, it’s unlikely to grow into a massive national business—it lacks scalability. Dry-cleaning chains basically don’t exist. How rich can you get owning one or a handful of local stores? Then again, maybe you become the person who cracks the scalability issue and figures how to create a huge dry-cleaning chain—sort of the Sam Walton of dry cleaning.

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Start small—think huge.

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Taco stands are tiny, like dry cleaners. Easy entry, too—just tortillas and a cart—but massively scalable. You wouldn’t pull off the highway to visit your favorite dry cleaner, but you would to grab lunch at your favorite taco joint. For example, Chipotle was a tiny regional burrito joint in Denver. McDonald’s invested, and Chipotle went national, then public in 2006. It did this by focusing on scalability and taking every advantage it could from centralized buying, mass advertising, and, yes, technology. Tiny into huge.

NEWER OR BETTER?

Next question. Entrepreneurs change the world in two basic ways: Creating something entirely new—filling a product or service hole—or making existing products better, more efficient. Which is for you? The entirely new crowd is like Bill Gates and late Apple founder Steve Jobs.⁶ Or Will Keith Kellogg—creator of corn flakes and the cold breakfast cereal genre. Or John Deere, an ironsmith who invented the steel plow and one of America’s oldest firms. Entirely new!

Your initial motivation can be more personal—maybe changing a small slice of your world. That can pay big. My friend Mike Wood was an intellectual property lawyer frustrated by the lack of good electronic games to help his son learn phonics. Inspired by this product hole, he founded Leapfrog in 1995. When he stepped down nine years later, his stake was worth about $53.4 million.⁷ When Mike isn’t serious, he shows his creative side, doing a heck of a job playing guitar and singing cowboy songs. You may think you need an MIT degree to discern the next great product. The truth is, sometimes all it takes is having a need you believe others have, too—and maybe some creativity and cowboy songs.

If you can’t visualize new products, try improving existing ones. Many of today’s wealthiest entrepreneurs simply did a fresh take on something existing—improving performance, productivity, or profit margins—making it better.

Charles Schwab ($6.6 billion)⁸ didn’t create discount brokerage, but he made it widely accessible. The late Bose CEO Amar Bose didn’t invent stereo speakers. He made them sound awesome. WhatsApp cofounders Brian Acton ($5.4 billion) and Jan Koum ($8.8...

Table of contents

• Cover
• fpraise
• Title page
• Copyright
• Preface: Now, More Than Ever
• Acknowledgments
• About the Authors
• Chapter 1 The Richest Road
• Chapter 2 Pardon Me, That’s My Throne
• Chapter 3 Along for the Ride: Ride-Alongs
• Chapter 4 Rich . . . and Famous
• Chapter 5 Marry Well. Really Well
• Chapter 6 Steal It—Like a Pirate, But Legally
• Chapter 7 OPM—Not Opium: Where Most of the Richest Are
• Chapter 8 Inventing Income
• Chapter 9 Trumping the Land Barons
• Chapter 10 The Road More Traveled
• Index
• Eula