My latest Business Insider piece

If you were to ask most what the definition of an entrepreneur was the majority would probably say fearless business owner. The actual definition of an entrepreneur is:

“A person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.”

But what is financial risk? Financial risk is taking action that has two possible outcomes:

1. Good – Some probability of losing a lot of money.
2. Bad – Some probability of making a lot of money.

When you take financial risk, you are exposing yourself to either a good or bad economic outcome.

Most individuals are risk averse. They do everything possible to avoid taking risks, preferring the old, worn path taken by so many. They pursue careers that avoid risk at all costs.

Why? Fear. When it comes to risk, the vast majority focus only on the possibility of a bad outcome. They only see the pitfalls, failure and the negativity of taking a risk. In fact, they view those who take risks as reckless and irresponsible. This fear grabs them with both arms and prevents them from taking any action at all that involves risk.

Successful entrepreneurs, however, are able to overcome fear. They are like Harry Houdini, able to break free from the grip of fear and take action on their dreams and goals. Are successful entrepreneurs simply more courageous than most people?

Not really. They have certain Fearless Habits that enable them to overcome the fear of risk:

1. They Prepare Before They Leap – Successful entrepreneurs study and practice relentlessly and become experts before they take a leap. When they do take risk, it is typically an educated risk – a risk they studied and prepared themselves for over many years. Educated risk means you understand what can go wrong. There is no uncertainty about all possible outcomes.
2. They Expect and Prepare for Failure – Fear loses its grip when you pursue anything expecting mistakes and failure. Because successful entrepreneurs expect and prepare for failure, if the worst does happen, they are able to navigate around it because they prepared for it. They have a plan for the worst case scenario.
3. They Know How to Pivot – Successful entrepreneurs are constantly seeking feedback. Feedback gives you the information you need to allow you to pivot and adjust. Pivoting means you are not locked into a specific way of doing things.
4. They Focus on Their Vision – They have a clear picture of the outcome they desire. This means they are not easily distracted when something goes wrong. Their vision allows them to stay focused and persist.
5. They Surround Themselves With Experts – In any project, initiative or pursuit, things will go wrong. Successful entrepreneurs anticipate that things will go wrong so they surround themselves with individuals who have done what they are trying to do; who are experts at what they are trying to do. When something does go wrong, they lean on their experts to help them navigate the pitfalls.
6. They are Eternal Optimists – Successful entrepreneurs live in a world of possibilities, where optimism rules their behavior. This habit of being positive every day clears away the fog of fear and negativity.
7. They Persistently Take Action – Every day, successful entrepreneurs take action. Fear is at its greatest just prior to taking action, so forging the habit of persistently taking action will lessen or even remove fear.

If you want to succeed in life, if you want to become rich, you need to understand the success beliefs of the Rich and develop more of these and drop the beliefs of the Middle Class or Poor. 

Beliefs represent the acceptance of something without any proof to back up what we accept as fact.

They are inherited unconscious programming.

In Tom Corley’s five-year Rich Habits study of 233 rich people and 128 poor people he discovered that your beliefs dictate your circumstances in life.

Those who are wealthy have different beliefs than those who are poor or stuck in the middle class.

We adopt the beliefs our parent, family, mentors, culture, and environment.

Most who were raised in poverty inherited limiting beliefs that hold them back in life.

Those who are able to rise from poverty and become wealthy found mentors who possessed success beliefs or employed certain strategies that enabled them to remove their limiting beliefs and implant success beliefs, effectively re-programming their entire belief system.

In this week’s video we discuss how the wealthy adopt certain beliefs that promote success:

These include:

• Money and wealth are good
• There is good debt and bad debt
• No one succeeds on their own.
• I can only succeed if I surround myself with other success-minded people.
• Birds of a feather flock together.
• I will avoid toxic people and surround myself with success-minded people.

You can can up with past episodes of this weekly webcast here – Rich Habit, Poor Habits – Tom Corley & Michael Yardney

Rich Habits Poor Habits Episode 9 | Rich Beliefs part 2

If you want to succeed in life, if you want to become rich, you need to understand the success beliefs of the Rich and develop more of these and drop the beliefs of the Middle Class or Poor.

Beliefs represent the acceptance of something without any proof to back up what we accept as fact.

They are inherited unconscious programming.

In Tom Corley’s five-year Rich Habits study of 233 rich people and 128 poor people he discovered that your beliefs dictate your circumstances in life.

Those who are wealthy have different beliefs than those who are poor or stuck in the middle class.

We adopt the beliefs our parent, family, mentors, culture, and environment.

Most who were raised in poverty inherited limiting beliefs that hold them back in life.

Those who are able to rise from poverty and become wealthy found mentors who possessed success beliefs or employed certain strategies that enabled them to remove their limiting beliefs and implant success beliefs, effectively re-programming their entire belief system.

In this week’s video we discuss how the wealthy adopt certain beliefs that promote success:

These include:

• I create my own luck.
• Opportunities are everywhere.
• Opportunity does not knock.
• I have to go out and find it and take action
• Failure is just another way to learn
• Failure is the stepping stone to success.
• Risk is good when it is calculated risk.

You can can up with past episodes of this weekly webcast here – Rich Habit, Poor Habits – Tom Corley & Michael Yardney

I recently received an email in response to my piece titled Survive Until You Succeed. Evidently, I have a lot of Dave Ramsey fans who follow me. And for good reason. I usually espouse the evils of accumulating debt and the importance of living below your means. Both of those are Rich Habits – Avoiding Debt and Living Below Your Means.

But I want to clarify something I think is very important. There is Good Debt and there is Bad Debt.

When you have to rely on debt to maintain your standard of living, that is Bad Debt because it means you are living beyond your means. Accumulating any Bad Debt is a Poor Habit.

When you use debt to create and build assets that have the potential of generating a future income stream, that’s Good Debt and that is a Rich Habit. The majority of the self-made millionaires in my study used Good Debt to accumulate their millions. Let me give you some real-life examples: [Read more…]

Michael Yardney and Tom Corley share important information about the importance of beliefs:

There are so many out there pitching their own version of what it takes to become successful. The current A-list gurus pitching their success secrets, according to this list of the top 101 self-help experts, are many.

Why so many?

Because, in the self-help industry, what sets self-help experts apart from each other, and how they make their money, is their formula for success. Each self-help expert has their own proprietary “formula” for success. But, none of those experts will ever admit one simple truth – that success in life ultimately comes down to creating opportunities in which luck can occur.

According to my five-year study on the daily habits of self-made millionaires, success boils down to doing specific things that increase your chances for luck to occur. What are those specific things?

Step #1 Pursue a Dream

Step #2 Create Specific Goals Around That Dream

Step #3 Create Daily Habits Around Each Goal

Step #4 Engage in Those Daily Habits

Step #5 Get Lucky

Without luck, success is impossible. The only “formula” that works, is the formula that helps you create opportunities in which good luck can happen.

Mark Zuckerberg is rich because he got lucky.

MySpace had millions of users long before Facebook. Facebook was hatched on February 4, 2004 while Zuckerberg was a nineteen year old Psychology major at Harvard University. The site became an instant hit among Harvard students. After one month, more than half of the undergraduate population at Harvard had created a Facebook profile Soon, other college students around the Boston region began signing up and Facebook caught fire. In September 2006, Facebook was extended beyond educational institutions to anyone with a registered email address.

Zuckerberg tweaked MySpcae by adding a few features. Facebook allowed you to use your own name, allowed you to add a picture of yourself, included a relationship status classification (i.e. “in a relationship”), and the infamous “like” button.

While MySpace had a lot of things, they didn’t have any of those things. How did Facebook know adding those things would catapult it ahead of MySpace and help it gain 1.23 billion users?

They didn’t. Facebook was one big experiment. Mike Jones, former head of MySpace, in an interview with Business Insider, said MySpace put up certain barriers on member use that Facebook didn’t have.Those added features made Facebook more interesting than MySpace.

How is that luck? Its luck because it was completely unexpected. Read anything about Zuckerberg and Facebook or just watch the movie The Social Network and you’ll learn that he had no idea Facebook would become so successful. He got lucky because, it turns out, people just liked Facebook’s added features and its ease of use.

Larry Page and Sergey Brin, founders of Google, are rich because they got lucky.

Google was born in 1996 as a research project by Larry Page and Sergey Brin Ph.D., students at Stanford University. Page and Brin created an algorithm to rank Internet pages, called PageRank, to return more relevant results than other engines. They did this by ranking pages based on patterns of hyperlinks on web pages, rather than looking at the text of web pages, and then assigned a PageRank score. Then they designed a blank white page, with the now infamous Google search box. In December, 1999 PC Magazine remarked that Google had “an uncanny knack for returning extremely relevant results”.

How is that luck? That fortuitous little bit of publicity caught the eye of some influential PC magazine readers, namely Kleiner Perkins and Sequoia Capital, two powerhouse Silicon tech investors. They fell in love with the white page and superior search results and quickly became early Google investors. Soon thereafter, Main Street USA would also fall in love with Google.

Elon Musk, founder of Tesla Motors is rich because he got lucky.

There were many other car manufacturers out there making electric cars, long before Tesla arrived at the scene. In fact, the electric car pre-dates the combustion engine. But the big manufacturers could never get the electric car off the ground. GM’s EV-1, which cost $1 billion to make, failed miserably. They were slow and their range was too short, about 100 to 150 miles per charge. Plus they looked clunky.

Tesla was actually not founded by Musk. In 2003, Martin Eberhard and Marc Tarpenning created and electric car they called the tzero. The tzero was fast. It could go from 0 – 60 in under four seconds. In 2004, Musk, flush with $200 million in cash from off the sale of his interest in PayPal, helped secure financing for Tesla and joined the board of directors as Chairman.

Tesla’s flagship Roadster, was introduced in 2008. It was sexy, fast and had a range of 250 miles per charge using a patented lithium battery as its power source. But it was expensive. It cost over $100,000 to purchase. So, Musk targeted rich people.

How is that luck? It turns out, rich people like sexy, fast electric cars, so long as they get 250 miles per charge.

Without luck, there would be no Facebook, Google or Tesla.

But their luck was luck that they created by virtue of chasing a dream. The individuals behind Facebook, Google, Tesla and every famous brand out there all had one thing in common – they engaged in repetitive action around their dreams. Those repetitive actions ultimately created the opportunity for good luck to occur.

From the very first days of preaching about the Rich Habits, I’ve never wavered. Right out of the gate I addressed the #1 important facet of success – Luck. In fact, in my first book, Rich Habits, you see that the Rich Habits Training Program begins with a discussion on the importance of luck. Why? Because without luck, success is impossible.

None of the success formulas in the world will produce success unless the formula provides you with specific action steps you need to take in the pursuit of a dream. That is why I focus so intensely on habits. Habits are repetitive actions, thinking, emotions and decisions. Good daily habits put you on a path towards success. They automate success. There’s no thinking involved with respect to habits. There’s no need for motivation or inspiration. Habits are automatic.

Because habits are repetitive, you mathematically increase your chances of realizing success when you engage in good habits that are built around your dreams and your goals. Habits, due to their repetitive nature, statistically increase your chances of good luck eventually happening, but only when they are the right habits.

The Rich Habits I often talk about are specific habits that I uncovered in my five year study of self-made millionaires. These rich people, I found, forged specific habits around their dreams and their goals. Eventually, those good habits resulted in good luck. Their good habits mathematically increased the opportunity for good luck to occur in their lives.

Two common traits of the self-made millionaires in my Rich Habits Study were: honesty and good health. I wondered if it was a coincidence that 95% of the self-made millionaires in my study had forged the Rich Habit of being truthful and that 95% of the self-made millionaires indicated that they were in good health.

So, I decided to do some more research. What I found opened my eyes about the negative health consequences of lying. [Read more…]

Are you thinking about pursuing something you are passionate about? Maybe it’s a start-up, side business, writing a book, a career change, creating an app or starting a blog or podcast.

If you talked to any entrepreneur who has been chasing their dreams for  some time you’d learn about something I like to call the Rejection-Redemption Cycle.

The Rejection-Redemption cycle is the emotional roller coaster ride you must survive in order to succeed in any venture.

The learning process in any new pursuit is littered with rejection. Everyone in the beginning says no to you, your idea, your product or your service. You will be rejected over and over again.

This is the Rejection part of the cycle. The negative emotions and self-talk you will have to endure during the Rejection cycle is harrowing. It pushes you to the edge. You second guess yourself constantly. You get depressed. It’s not an easy thing to endure.

But if you persist eventually someone will say yes. This is the Redemption part of the cycle. It’s exhilarating. For a short period of time you feel like you are walking on air. You feel imbued with confidence and motivation.

Until you get the next no. Then the cycle starts all over again.

The emotional ups and downs you must endure when you are pursuing a dream cause most to cash in their remaining chips, lick their wounds and go out and find a job.

According to Forbes Magazine, 90% of those who pursue a dream will, at some point, fail. According to my research, 27% of those 90% will pick themselves up, try again and eventually become multi-millionaires.

The ability to survive the Rejection-Redemption Cycle is the #1 factor of success for self-made millionaires. Adequate working capital is #2.

Seasoned entrepreneurs out there know exactly what I’m talking about. Money can always be found for the highly motivated but weathering the emotional ups and downs takes super-human resolve.

Do you have what it takes to survive the Rejection-Redemption Cycle? There’s only one way to find out.

In 2013 I did an interview with Dave Ramsey. After the interview, Dave decided to post an article about my research on his website: 2o Things the Rich Do Every Day.

Almost immediately the article went viral. Millions clicked on Dave’s list and began to comment on the post. It didn’t take long for the national media to take notice. A very prominent CNN blogger posted a scathing rebuke of the article. The Huffington Post put their two cents in, as did the Daily Kos and many other big-time blogs around the country.

Yours truly received thousands of emails, some good, some not so good. Some emails called me heroic, others called me things so offensive, they’re better left unsaid.

Clearly, Dave’s article hit a nerve. After the fog cleared, I realized why so many felt so strongly about Dave’s post. [Read more…]