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Secrets of the Self-Made Billionaires

Secrets of the Self-Made Billionaires In examining the Forbes’ list of the wealthiest, one is astonished by the concentration of so much wealth in so few hands. Such excessive inequality is indeed bothersome: because not only it is an ethical outrage but also it is undercutting growth and creating one of the most significant hurdles to ending poverty.

Observe the “humble beginnings” of many on the Forbes lists. Much of the self-made fortunes are ascribable to vibrant entrepreneurial capitalism. Few become billionaires by exploiting others … most get rich through millions of happy customers.

Intersting Trivia About the Forbes’ Billionaires List

  • Of the Forbes’ billionaires, John Paul DeJoria, Richard Branson, and Leonardo Del Vecchio never attended college. Ross Perot attended community college.
  • Many individuals going to great lengths to keep their finances discreet. Public companies are required to disclose information. Private companies can be trickier. Forbes calculates net worth by trying to determine the value of every asset and use only what they can prove. They also always give the billionaire a chance to provide input.
  • There are possibly many billionaires that aren’t on the list, whether due to secrecy or lack of evidence. It’s hard to amass that much money and hide its source or where it’s parked without drawing attention.

Secrets of the Self-Made Billionaires

  • President Donald Trump’s contrarian advice: “Screw ‘em back. If someone screws you, nail them to the wall.”
  • Telecommunications mogul Kenny Troutt‘s hardest lesson he had to learn: “Money does not buy happiness.”
  • Media proprietor and investor Mortimer Zuckerman‘s greatest guilty pleasure: “There used to be guilt associated with most of my pleasures and now there is none.”
  • Media proprietor and investor Mortimer Zuckerman on the correct amount to leave to children: “Enough to support them, but not enough to leave them without ambition.”
  • Banker Sanford Weill‘s hardest lesson he had to learn: “Recognizing a problem and addressing it right away before it becomes a bigger problem.”
  • Sports promoter O. Bruton Smith‘s contrarian advice: “Hard work overcomes a lot of incompetence. You can talk about trying to be highly qualified with an MBA and all of that, but hard work seems to overcome so many negatives in life.”
  • Investor and money manager Ken Fisher‘s hardest lesson he had to learn: “That others usually don’t see me as I see myself.”
  • Retail entrepreneur John Catsimatidis‘s hardest lesson he had to learn: “Some people may just not like you for no reason at all.”
  • American attorney Joseph Jamail Jr.‘s contrarian advice: “Don’t trust politicians who are convinced they have the answer and who say “trust me.””
  • Sports team owner Michael Heisley‘s greatest guilty pleasure: “Stealing an hour or two to be completely alone and not reachable.”
  • Sports team owner Michael Heisley‘s hardest lesson he had to learn: “Wealth is one of the most corrupting influences in my life.”
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Posted in Investing and Finance

Arnold Schwarzenegger Rejects the Idea of a Self-Made Man

'Total Recall' by Arnold Schwarzenegger (ISBN 1849839735) Actor and politician Arnold Schwarzenegger‘s story has an inspiring premise. The son of Austrian police officer who was a Nazi party member, he moved to New York in the early 1968 to further his career as a body-builder and winning six Mr. Olympia body-building tournaments. In the intervening time, he put himself through business school at the University of Wisconsin Madison, invested in real estate, and parlayed his passion with fitness into a lucrative video- and book-sales company.

Schwarzenegger may have remained a businessperson if not for the success of the documentary Pumping Iron (1977) which transformed him into a minor celebrity and planted the seeds of his Hollywood aspirations. It wasn’t he played a 74-word part in an obscure sci-fi film called Terminator (1984) that he finally became a star.

Even after Arnold Schwarzenegger’s long march from a penniless immigrant to a Hollywood star and later the Governor of California, he declares that the notion of the self-made man is a myth. He states that we must all help each other because no one can get anywhere on their own.

I came over here with absolutely nothing. I had $20 in the pocket and some sweaty clothes in a gym bag. But let me tell you, I had this one little apartment and on Thanksgiving, the bodybuilders from Gold’s Gym came to my apartment and they brought me pillows, dishes, silverware, all of the things I didn’t have. None of us can make it alone. None of us. Not even the guy that is talking to you right now, who was the greatest body builder of all times. Not even me, that has been the Terminator and went back in time to save the human race. Not even me that fought and that killed predators with his bare hands.

I always tell people that you can call me anything that you want, but don’t ever, ever call me a self-made man. It gives the wrong impression, that we can do it alone. None of us can. The whole concept of the self-made man or woman is a myth. I would have never made it in my life without the help. So this is why I don’t beileve in a self-made man. Why I want you to understand that is, because as soon as you understand that you are here because of a lot of help, then you also understand that now it’s time to help others. That’s what this is all about.

Source: Arnold Schwarzenegger—Together on the Goalcast Podcast

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Posted in Philosophy and Wisdom

Make connections with People by Applying President Reagan’s Three Simple Principles

President Ronald Reagan - Great Communicator

Ronald Reagan’s Chief Strategist Dick Wirthlin walked into the Oval Office and found President Reagan at his desk holding a photograph.

“Mr. President, what’s that?”

“Well, Dick, I just got off the phone with this young man.”

As the President turned the photograph around, Dick winced at the haunting image staring him in the face. It was the picture of a 12-year-old boy who had been severely burned while attempting to rescue his two younger brothers when their family’s trailer caught fire. While frantically searching through the flaming trailer, the young man sustained severe burns before carrying his siblings to safety. As a result, the boy’s face and body had been seriously scarred and disfigured.

“I called this little fella to see how he was doing and to tell him how proud I was of his heroism,” Reagan said.

He then looked back down at the little boy’s visage. “Dick, at the end of our conversation the youngster said, ‘President Reagan, I sure wish I would have had my tape recorder on so I could remember our call together.’

So I said, ‘Do you have it there?’ He said he did. So I told him, ‘Well, son, turn it on and let’s chat some more.”

Did you catch that? “Let’s chat some more.” This is the language of leadership. These aren’t the words of a great communicator. These are the words of one of the greatest communicators.

Three Core Lessons

Ronald Reagan taught us three core lessons that all leaders must embrace.

Lesson 1: Issues Change, Values Endure

'Ronald Reagan: Life Changing Lessons!' by William Wyatt (ISBN B00HRLDLHO) Ronald Reagan believed values are the lynchpins of effective persuasion. The reason: while issues change, values endure.

New challenges emerge—sometimes daily. This constant state of flux can create uncertainty about how the leader will respond. If, however, he or she is guided by a core set of beliefs that have been articulated consistently, you can know the direction your leader’s decision making “compass” is likely to point. By knowing a leader’s values, you know where they will lead, regardless of shifting circumstances.

This assumes, of course, that the leader has identified his or her guiding values and embedded them in their communications. While this requires thought, the rewards can be immense.

When it was time to devise his 1980 acceptance address for the Republican National Convention, Reagan designed his speech around three value-laden institutions and two core values: family, work, neighborhood, peace, and freedom.

Once Reagan was finished, the nation had a firm grasp of who Reagan was and where he wanted to lead.

Ronald Reagan Spokesman for General Electric

Lesson 2: Persuade through Reason, Motivate through Emotion

'An American Life: The Autobiography' by Ronald Reagan (ISBN 145162073X) You can persuade through reason, but you motivate through emotion. How? By doing what Ronald Reagan did best: using stories to showcase values and frame his vision.

Even during his days as a radio sports announcer and spokesperson for General Electric, Ronald Reagan always loaded his speeches with stories that illustrated his values. He was never the focal point of the stories. Instead, he told stories that exemplified his values while elevating the importance of others and their contributions. This leadership trait was summarized in the placard on his desk: “There’s no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.”

Reagan believed that sincere emotion was the spark that ignites the fuse of action. Many leaders feel uncomfortable infusing emotion into their communications, but ignoring this element is a mistake. People don’t just want to make intellectual connections; they want to experience emotional ones as well. To be sure, leaders can go overboard in their use of emotion by banging the drum of values too forcefully. But the greater danger is to appeal only to the mind and to ignore the heart. Ronald Reagan knew how to balance the two.

Ronald Reagan Debate with Walter Mondale

Lesson 3: Humor Makes a Human Connection

'Ronald Reagan: How an Ordinary Man Became an Extraordinary Leader' by Dinesh D'Souza (ISBN 0684848236) Ronald Reagan loved to laugh and tell jokes. It revealed his core love of people, and he used it to build bridges between people, even those with whom he disagreed. Still, his use of humor was often strategic.

Take, for example, Reagan’s second debate with Walter Mondale. After their first debate, some questioned whether Reagan was too old to serve a second term. When the question about his age came up, Reagan delivered one of the most famous lines in presidential debate history: “I will not make age an issue of this campaign. I am not going to exploit, for political purposes, my opponent’s youth and inexperience.”

The line was a masterstroke, and it was all his own. Reagan had displayed self-deprecation and supreme confidence while defusing a divisive issue.

The Greatest Communicator has now exited the stage. Yet in his passing he has left behind a legacy of leadership. Americans rate Ronald Reagan as the greatest president in American history. But while politics was one of Reagan’s passions, it was not his greatest passion. This he reserved for people.

Reagan took time out of his day to invest in people and make them feel special. You can do the same.

Recommended Reading: Ronald Reagan

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Posted in Leaders and Innovators Management and Leadership

Emotional Intelligence: Transforming Motivation to Change

Emotional Intelligence

Sitting in the corner office in her leather chair, Barbara Smith exhales as she gazes out the window. Reflecting on her life, she is amazed by the journey. Once a line worker, at age 58 Barbara is the Senior VP of Manufacturing.

As a girl, Barbara had a curious mind. She always invented her own toys, yet as the youngest of five children, she was the “runt of the litter” and was picked on frequently. To avoid being bullied, she had to find ways to befriend people. It took a lot of energy to break free from the caste that made her who she was the introverted shy-gal.

'Emotional Intelligence: Why It Can Matter More Than IQ' by Daniel Goleman (ISBN 055338371X) At the same time, she learned a lot from these experiences, which eventually earned her respect. As she moved through her college years, Barbara learned more about dealing with people. She formed lasting friendships. Barbara knew from experience that cultivating these relationships was a wise choice.

Sure enough, a college friend helped Barbara land her first full-time job, an entry-level position at a Detroit car manufacturer. The job fit with Barbara’s introverted personality. However, Barbara’s inclination to solitude was not rewarded at work.

More and more, her professional success and happiness was based on her ability to inspire and motivate others. Today, Barbara is able to reach out to people. She knows that people like to be around people who like them, or at least understand them, and she is not one to do this naturally.

Indeed, Barbara has spent much of her life finding the motivation to connect with other people. The world always found a way to reinforce this behavior. In her own words, “I couldn’t really understand other people until I understood myself. When I was younger I simply catered to others, but now I’ve learned how to really connect with them.”

Barbara had to take the time to get intimately familiar with her own tendencies, strengths, and shortcomings. This required many years of self-reflection. Barbara had to discover new things about her and her leadership style before she could take her game to the next level. To learn about herself, and discover new ways to excel in connecting with people, Barbara directed much of her focus to her emotional intelligence (EI).

Social Competence and Emotional Intelligence

Social Competence

Emotional Intelligence (EI) is your ability to recognize and understand emotions, and your skill at using this awareness to manage yourself and relationships with others. EI is comprised of two main skills,

EI is dynamic and it is easy for definitions to get unnecessarily complicated. There is one nutshell description people prefer to keep things simple, “Emotional intelligence describes the side of life that typical smarts cannot.” EI explains why two people of the same intelligence can attain vastly different levels of success in life. EI is the intangible “something” in each of us that incites how we manage behavior, navigate social complexities, and make personal decisions that achieve positive results.

Emotional intelligence taps into a fundamental element of human behavior that is unique from your intellect. There is no connection between IQ and EI; you simply cannot predict emotional intelligence based on how smart someone is. This is great news because regular intelligence cannot change. Your IQ, short of a traumatic event like a brain injury, is fixed from birth. You do not get smarter by learning new facts of information. EI, on the other hand, is a flexible skill that is readily learned. While it is true that some people are naturally more emotionally intelligent than others are, a high EI can be made even if you are not born with it.

Leaders with Low Emotional Intelligence

Leaders with Low Emotional Intelligence

The trend seen when emotional intelligence is compared to job title is puzzling and dramatic. Scores climb with title from the bottom of the corporate ladder upwards toward middle management. Middle managers stand out with the highest emotional intelligence scores. However, the surprise comes as you continue looking up beyond middle management. There is a steep downward trend in emotional intelligence scores for individuals holding director titles and above. In addition, CEOs, on average, have the lowest emotional intelligence scores in the workforce.

We often think that the higher your job title, the less “real work” you do, and so your main function is to “get work done through other people.” However, it appears that too many people are promoted for what they know or how long they have worked, rather than for their skill in managing people. Once they reach the top, they spend less time interacting with staff.

Among executives, those with the highest EI scores are the best performers. The same holds true for every job title: those with the highest EI scores within any position outperform their peers. Emotional intelligence has more influence on job performance than intellect or experience.

Recommended Reading

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Posted in Education and Career Management and Leadership Mental Models and Psychology

Dealing with Deference: Causes and Solutions

Dealing with Deference

We often defer to the boss’s suggestions, even if we disagree with an idea or, worse, think the idea is moronic. We withhold our objections to these “ridiculous ideas” for obvious reasons: We want to be polite and nice and continue making the house payment. But deference plagues organizations, saps effectiveness, stalls success, and erodes resources. While some managers are blind to the deference disease, others are desperately seeking an antidote.

Once the boss of a company I was working for called and asked if it would be okay if he took home the “wood scraps” to use for fireplace kindling.

Two hours later I received a phone call from the boss’s wife thanking me for the “lovely wood” that was delivered to her home. As the boss’s request reached the people assigned to pick up the scrap, the request was transformed into a command. So, instead of sending over discarded scrap wood, employees cut expensive oak planks to size, banded the wood, and transported it to the boss’s home. Then they complained the boss was misusing resources. The boss had no idea this was going on.

Four Clues to Recognize Deference

People often complain about deference to authority, in fact, it comes up in almost every survey. Here are four cues to help you recognize deference, as well as some dos and don’ts for dealing with it.

Cue #1: A pause should give you pause.

You’ve just shared an idea with a direct report who thinks it’s sort of stupid, but he doesn’t want to hurt your feelings or get canned. So he thinks, “How can I let the boss know I’m not keen on this idea?” He pauses to think. Of course, his brain is moving at light speed as he conjures a script. Nevertheless, there is a two-second pause as he searches for just the right words.

DO: Now, if you’re a caring, sensitive, high self-monitor, you immediately recognize the pause as a warning sign. You think to yourself, “Oh oh, there’s a pause. My bet is he’s thinking of a way to let me down gently.”

DON’T: If you’re like most people, you desperately want your idea to be implemented, so you are not looking for signs of disapproval. You’re looking to make your argument quickly, articulately, and with as much enthusiasm as possible. So you completely miss the two-second pause and don’t back off.

Cue #2: Faint praise should hit you like a truck.

Following the brief pause the other person chokes out a response. Since he’s worried about the horrific things that might happen if he disagrees, he consents to your whacked-out suggestions—but woefully. He comes back with something like: “I don’t know,” (he pauses again while looking distressed) “I guess your idea might work.” This, of course, is code for: “Are you nuts? Your idea will crash.”

DO: The savvy individual would read the concern reflected in the pause and pay attention to the tentative language (“might,” “maybe,” “perhaps”). This tepid approval is bogus and means the person is afraid to speak his opposing views. The most obvious hint the person has serious doubts is his halted delivery and pathetic look of distress.

DON’T: You’re so hyped on the sheer genius of your idea you pay no heed to tentative language, pregnant pauses, or expressions of distress. For you to pick up on the vibe that your direct report wants to express a concern, he will have to fire off a flare, grab you with both his hands, and shout: “Listen up, I have real concerns here! Do you hear me? Real concerns!” After all, you’re excited about your idea and are looking for people to agree with you. So, you read any ambiguous clues as signs of approval.

Cue #3: Words of concern should be a signal to probe, not to defend.

Deference to Authority

As the conversation continues, you take your subordinate’s lukewarm response as genuine acceptance and move in for the close. At this point, your direct report realizes his subtle hints have gone unnoticed and he’ll have to say something clear, forceful, and out loud. So he says: “Actually, I’m a bit worried about your plan. I can see you’re excited about this idea and that you’ve given it a lot of thought, but I’m wondering if…”

DO: Note your subordinate’s clever words. He’s acknowledged your excitement, given you credit for thinking about your plan, and only tentatively shared his opposing views. It’s a textbook response tailored to catch your attention without making you defensive. Read these words as a clue to probe for more detail. After all, the person in a position of less authority took a risk and needs to be rewarded. At this point, it makes sense to stop and thank him for his candor and seek more information.

DON’T: By this point, you’re completely committed to your idea and aren’t interested in hearing objections—no matter how well stated—so you don’t listen. Instead, you move from being enthusiastic to being argumentative. What you’re really saying is you’ve made your mind up and if the other person doesn’t agree, you’ll keep serving up arguments until he crumbles. And, oh yes—did you forget to mention—you are the boss, right?

Cue #4: Fear should cause you to look at yourself, not to increase your attack.

'Never Mind the Bosses: Hastening the Death of Deference for Business Success' by Robin Ryde (ISBN 1118474406) As you step up your debate tactics, the other person starts to look frightened. His eyes dart wildly as he looks for an exit, sweat forms on his forehead, and he prepares for a full frontal attack. He has this really bad idea he has to contend with, his boss is turning up the heat, and he doesn’t know what to say or do. Savvy individuals take one look at the fear in the other person’s eyes and realize they have done something to create this unfavorable reaction. They also know that it now falls on them to restore the conversation. They’re in a position of power, they’ve probably caused the fear (even if they’ve been on their best behavior), and they’ll have to fix it.

DO: To restore safety (and kill mindless deference) you might say: “I don’t want to force my view on you. I really want to come up with an idea that serves us all well. My plan might cause problems with your team, and I’d love to hear any objections you might have.”

Notice how these words help restore safety by establishing mutual purpose, softening your position, inviting differing opinions, and playing devil’s advocate. This doesn’t come naturally. You must fight your tendency to increase your attack at the first sign of fear. If you want to nip deference in the bud, you have to find a way to create safety.

As you enter a high-stakes conversation with a subordinate, you’ll likely offer up a hefty load of deference unless you create safety. And since others are likely to avoid disagreeing with you directly and openly, you’ll have to pay close attention to subtle signs.

First, watch for each pause. Hesitancy will be your first warning. If a pause is followed by a visible drop in confidence and half-hearted support, assume others have differing views but are holding back. Invite their opposing views. Explain that you want to hear all sides.

If the other person finally suggests an opposing view, embrace the information. Don’t attack it. You can make your points later. For now, encourage others to clarify their opinions. Value criticism —it’s your best tool for continuous improvement. Thank the other person for his or her candor and ask for details.

If you see fear in others’ eyes, take this as a cue not to step up your debate tactics, but to step out of the conversation and restore safety.

Don’t pound your point home. Instead, establish mutual purpose. Share your good intentions. Make it safe for others to speak openly and honestly

Recommended Reading on Dealing with Deference

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Posted in Management and Leadership Mental Models and Psychology