Book review: Business Brilliant

The skills you need to get rich

Thanks to friend of the publication

Pitchfork Papers

for another solid book recommendation. After I wrote about my experience working with a wealthy New Yorker, Steve recommended that I read Business Brilliant. I took him up on the suggestion and I’m glad I did. To summarize in a sentence: Business Brilliant teaches the practical skills that regular people use to grow their wealth, as well as the beliefs they inculcate to help them make more than everyone else.

In reading Business Brilliant I found one idea that hit me particularly hard…

Lewis Schiff explains that millionaires improve upon their core competencies, while letting their weaknesses fester. In other words, if you’re great at something you should spend all your time doing that thing. If you suck at something you shouldn’t try to get better; hire someone else to do it.

That advice goes against the mainstream narrative, doesn’t it? It seems like society teaches us that we need to be well-rounded in all areas, and the best way to better ourselves is by working on our weaknesses. As commonsensical as that advice sounds, if you want to get wealthy you should do the opposite.

Schiff goes on to explain that millionaires do one thing over and over again, until they succeed. For example, one millionaire developed a timeshare project and successfully sold all the units. However, due to an exploitative business partner and a poorly worded contract, the man ended up with almost no profit despite selling dozens of condos.

Rather than start fresh in a new industry, the man used the lessons he learned from his initial failure to do the same thing again, only better. The second time around he sold all the units, but did so on far more favorable terms and made a bankload of money. As that example shows, the path to profitability lies in mastery. Every failure is a chance to learn how to not do it, such that each iteration gets better.

I would tend to agree.

I have designed and built more than a dozen websites, and I’ve started about half a dozen blogs. All of my previous publications failed either because they didn’t gain traction, or I pigeon-holed myself into a niche topic and ran out of things to write about.

I learned from those experiences, and have applied the lessons such that this Substack is the most successful writing venture I’ve ever undertaken. My experience in web design helped me to create (what I believe to be) a cool branding package. My previous writing experience taught me to keep things loose and open, which is why you’ll see me expanding on topics as diverse as trading bonds, philosophy, interest rates, Bitcoin, book reviews, energy stocks and macro commentary.

On to business

Another nugget of insight that I found valuable: wealthy people don’t start business concerns with their own capital, they seek outside investment. Warren Buffet got rich because he got people to invest with him back in the paleolithic period, when his career began. Wealthy people have investors so that if the project fails, they aren’t broke. They can dust off and give it another go.

Furthermore, the wealthy seek an equity stake in whatever they’re working on. For example, say that you start at a new company. Would you rather have a guaranteed raise in six months, or some stock options? The capitalist desires the equity so that he or she can participate in the upside. In general, a person who wishes to become wealthy should desire to benefit from the rewards of their hard work. That’s in direct opposition to a salary, which might not increase even if a company’s market cap quadruples.

More lessons

Other chapters of Business Brilliant explore why knowing the right people is better than having the best skills, and how successful entrepreneurs rarely come up with a groundbreaking innovation. Rather, they take an existing product and improve upon it. Or hell, they don’t even improve the damn thing they just do a better job marketing it. Imitation is common too, as you’ll see with Bill Gates the ostensible genius.

Also, you’ll find a reiteration of the truism that the people we spend the most time with shape who we are. Here’s a quote that I bookmarked.

So is success contagious? Does it help you to follow the money if the people within your network are also following the money? The answer to both questions is probably yes, since so many of the behavioral differences found between the middle class and self-made millionaires are highly social habits such as seeking equity, negotiating higher pay, imitating success in others, and finding investors. It makes sense that self-made millionaires with these habits of mind will gravitate toward and influence others with similar habits, especially because they share a common belief in the power know-who.

A consistent theme runs through Business Brilliant: wealthy people think and act different than their middle class counterparts. Whether it’s negotiating a deal, taking an equity stake or persistence in the face of adversity, there is a surprising amount of overlap in how the prosperous approach life.

Business Brilliant was a good read, and another commendable recommendation from Sir Wilkinson. Sea also my review of Production versus Plunder, another h/t from Steve.