The Billionaire's Strategy for Success

John Paul Getty became the richest man in the world by practicing a few basic principles of risk-taking and reward throughout his life. In this newsletter, you learn his key insight to risk reduction and success and how you can apply it to any decision you have to make. You learn a series of additional ideas that can help you to make better decisions and reduce the risks associated with success. The Billionaire's Strategy for Success Remember Murphy's Law: "Whatever can go wrong will go wrong." There are several secondary laws to Murphy's Law, such as "Whatever can go wrong will go wrong at the worst possible time" and "Of all the things that can go wrong, the most expensive thing will go wrong at the worst possible time." Another sublaw is "Everything takes longer than your best calculation." In advising businesspeople, I suggest that they take their very best estimate of break-even for any business venture and then triple it to arrive at a more realistic number. Whenever businesspeople follow this advice, they are amazed to find that, in spite of their best initial calculations, it indeed takes about three times longer than they thought it would to start making money. Always Add a Fudge Factor Another sublaw is "Everything costs more than you can possibly anticipate in advance." In minimizing risk in any venture, always add a "fudge factor" to account for the degree of uncertainty. Whenever I do a business plan, I always add 20 percent to the total of all costs that I can identify, to come up with the probable cost. Anything less than this, whether in business or your personal life, is likely to be an exercise in self-delusion and open you up for some unhappy surprises. Once you have identified the worst possible things that could go wrong, make a list of everything that you could do to offset these negative factors. Engage in what is called "crisis anticipation." Look down the road, into the future, and imagine every possible crisis that could arise as the result of changing external circumstances. Be Intensely Realistic Men and women who have achieved a high level of success are intensely realistic. They do not put their trust in luck. They carefully calculate every possible risk, and then think about what they would do should it occur. They always have a backup plan in case things do not go as they wish them to. They have a "Plan B" and options to that plan that take all kinds of variables into consideration. Do the Things You Fear One of the very best ways to develop your ability to take intelligent risks is to consciously and deliberately do the things you fear, one step at a time. A very good way to overcome the fear of risk taking is to set clear, written, measurable goals for yourself, and then to review those goals regularly. When you have clear goals and plans, and you continually work on them and evaluate your progress each day, you will see what you're doing right and how you could improve your performance. You'll feel more competent and capable and better about yourself. You'll become more thoughtful and reflective and willing to take on even greater challenges. You'll feel like the "master of your fate and the captain of your soul." And your likelihood of success will become greater and greater. Action Exercises Here are three steps you can take immediately to put these ideas into action. First, take any worry situation in your life today and ask, "What is the worst possible thing that could happen?" Then go to work to make sure it doesn’t occur. Second, look into the future in your life and determine the worst things that could happen. Engage in "crisis anticipation" regularly and continually be taking steps to guard against them. Third, work from clear, written goals and detailed plans. Review them regularly. Consider alternatives and always look for ways to increase the likelihood of your success.