How to Improve on THINK AND GROW RICH
Napoleon Hill’s famous book THINK AND GROW RICH. It’s the “business bible” of hedge fund managers and other high earning entrepreneurs. This episode takes a look at its teachings. And offers a fresh perspective on how to make its advice more believable in the modern age.
Napoleon Hill’s famous book THINK AND GROW RICH is a bible among hedge fund managers and other high-earning business owners.
In this episode:
- We’ll look at the book’s teachings, and tease out the reason that mindset is not always enough.
- You’ll learn what entrepreneurs need, in addition to mindset.
- And you’ll hear my favorite joke of all time!
LISTEN TO THE FULL EPISODE:
Welcome to How to Make More Money, a podcast that helps you get seriously good at the game of making serious money. I’m your host Kelly Hollingsworth, and I’m thrilled you’re here today. Today I thought we would dive right in and discuss Napoleon Hill’s famous book, THINK AND GROW RICH and specifically how we can take its teachings and dial them up a notch to create a contemporary approach to making money that meets the demands of this century. If you haven’t read THINK AND GROW RICH in a while, or if you haven’t read it at all, I don’t suggest that you rush right out to buy this book. In my mind, there are better books on the subject of making serious money, but I came up in the hedge fund industry and THINK AND GROW RICH is the Bible in that business. So let’s not dismiss this book entirely out of hand. Many of the highest earning business owners on the planet love this book for good reasons.
So today I’d like to recap it’s major lesson and why it’s so valuable. And then I’d like to add a few thoughts of my own to help all of us make this idea that you can THINK AND GROW RICH a little more believable and more applicable to a modern business environment. So the book opens with its famous introduction, “Truly, thoughts are things,” that’s a quote. “Truly, thoughts are things.” What Hill means by this is the basic gist of the book that men really do THINK AND GROW RICH. He mentions women too here and there in the book. So women are of course not excluded. If you have a human brain, women included, you can use it to make money. The idea that money is created twice, first in your mind, and then in reality, isn’t new, nor is it controversial. We convey this concept in many different ways.
Napoleon Hill says, “Thoughts are things, men really do think and grow rich.” In the modern parlance of Jack Canfield and others we say, “What you think about you bring about.” Brooke Castillo would say that, “Thoughts create results.” Ed Seykota says that, “Everyone gets what they want.” All of this is super powerful and super helpful, but if you’re struggling to make money, believing that money comes from your mind can feel like a tall order. Can you really just think and grow rich? So here, my background is a lawyer is going to come in very handy because the answer is yes, and no. And now I’ll explain why. The premise of THINK AND GROW RICH, that thoughts are things and that men truly can think and grow rich is illustrated in the books retelling of the story of Edwin C Barnes. Barnes had a burning desire to become a business associate of the great inventor Thomas Edison.
Barnes didn’t know Edison and didn’t have any money to travel to East Orange, New Jersey where Edison lived, but his desire was definite. So he hopped a freight train, presented himself at Mr. Edison’s laboratory and announced he had come to go into business with the inventor. And everyone laughed. And Edison gave him a job sweeping floors for nominal compensation, but Barnes’ desire was so great that he kept showing up to the lab and doing the menial work until an opportunity to partner with Edison presented itself. Edison’s salesmen weren’t enthusiastic about a new invention called the Edison dictating machine later known as the Ediphone, which is I understand thinks was an early version of the tape recorder. In any case, Barnes was excited about the Ediphone and he stepped in with a plan to distribute this invention. Distribution went well according to THINK AND GROW RICH and Barnes became wealthy as a result of his partnership with Edison.
That’s the basic story. From it, Hill gleans 13 principles that sum up to the idea that you can use your mind to make serious money. And I first encountered this idea as a 20 something hayseed from Idaho who landed her first real job in the hedge fund industry. Initially, I was a fraud examiner. I flew around the country examining both legit and illegitimate hedge funds, looking for improprieties. And that’s where I first began meeting these guys who managed hedge funds and who believed that you can think and grow rich and who worship at the throne of Napoleon Hill. And yes, when I say they were guys, I mean, they were all guys. I’m the only woman I know who has managed her own hedge fund.
But in any case, as I said earlier, all these guys think that their Bible is THINK AND GROW RICH. That’s the Bible of that business. And at the time when they were sharing this idea with me, I hadn’t read the book and it made perfect sense to me that this idea you can think and grow rich would work for hedge fund managers because what do hedge fund managers do? They think about what to do in the market, and if they think that in the right direction, i.e. to buy when the market’s going up, or sell when it’s going down, then they do make money. They do get rich. It wasn’t until later, this made sense to me initially, it wasn’t until later when I actually sat down to read the book that I realized that the idea of think and grow rich was intended by the book to apply not just to hedge fund managers, the book was intended to apply to everyone no matter what business you’re in. And that was a head scratcher for me. And here’s why.
If all you’re doing is trading financial instruments, it’s just you versus the market’s direction, what’s in your mind is all that matters. However you play it, buy low and sell high or sell high and buy low, trading is a one person game. Yes, of course, there’s someone on the other side of the trade who’s selling the financial instrument that you’re buying or buying what you’re selling. But as long as there’s liquidity in the market and a stock or a futures exchange between the two of you, you don’t have to know them and they don’t have to know you for a transaction to occur. They don’t even have to agree with you. And they don’t agree with you. They’re taking the other side of the trade. So it’s necessarily the case that they don’t agree with you. So if you’re a trader and not an entrepreneur, you could live in a cave, never come into contact with another human soul and do just fine making money with your own thinking and a working internet connection.
But business is different. When we’re talking, not about trading financial instruments, but about selling goods or services in the marketplace, then what happens? We see that business is a two person game. It takes a customer to make money in commerce. So what’s in your mind isn’t all that matters when you’re an entrepreneur. When it takes two to tango, you don’t just need to worry about your own thoughts, you need to worry about the other person’s thoughts. What your customer is thinking. Does he or she agree to buy from you or not? Do your prospects need or desire what you sell or not? When we think about business as a two person game, as the two person game that it is, this is where it becomes readily apparent that the power of one mind, your own in entrepreneurship, isn’t going to be enough to get you there.
In commerce, money doesn’t come from your mind all by itself, but rather from a meeting of the minds between buyer and seller. Which brings me to a joke I have loved since I saw it in a standup comedians act years, or maybe even decades ago. I don’t remember when it was, I don’t remember his name, but I’ll never forget what he said. He talked about going away to college for his freshman year and when he came home after the first semester, he told his dad, “I’ve decided to major in philosophy.” And he said that “This is of course every parent’s dream.” His dad thought about this for a minute and then said to his son, “Hmm, why don’t you get a double major in communications? Because then you’ll be able to think out loud.” Why did the dad in the joke recognize the need for his son to be able to think out loud? Because he doesn’t want his son living in the basement.
The moment the kid says philosophy with no other skills attached to it, the dad gets a vision of the kid living in the basement, perhaps forever. It’s instantly and abundantly clear to this father with all his common sense, that mindset isn’t enough. If his kid is going to make any money, he can’t just think, he has to be able to think out loud and do it well enough for others to want to buy whatever it is that he’s selling. This is the missing piece that has always bothered me about the story of Edwin C. Barnes and his partnership with Edison in the book, THINK AND GROW RICH. To be fair, Hill addresses the need for a meeting of the minds in the first few pages of the book. He doesn’t use those words, but there’s an excerpt in the book in which Hill describes what Edison had to say years after his first encounter with Barnes.
Here’s a quote. Edison is being quoted here. “He stood there before me looking like an ordinary tramp, but there was something in the expression of his face which conveyed the impression that he was determined to get what he had come after. I had learned from years of experience with men that when a man really desires a thing so deeply that he is willing to stake his entire future on a single turn of the wheel in order to get it, he is sure to win. I gave him the opportunity he asked for because I saw he had made up his mind to stand by until he succeeded. Subsequent events proved that no mistake was made.” That’s the end of the quote. That’s Edison talking.
Of this quote by Edison, Napoleon Hill goes on to say, “Just what young Barnes said to Mr. Edison on that occasion was far less important than what he thought. Edison himself said so. It could not have been the young man’s appearance, which got him his start in Edison’s office, for that was definitely against him. It was what he thought that counted. If the significance of this statement could be conveyed to every person who reads it, there would be no need for the remainder of this book.” I agree that it’s a significant statement. What Barnes thought when he met Edison, mattered. So let’s repeat this part to make sure it sinks in. “Just what young Barnes said to Mr. Edison on that occasion was far less important than that which he thought. Edison himself said so.” With this, I wholeheartedly agree. Belief in your product comes first. Without it what you say isn’t going to help you much if at all but let’s not forget something really important. Edison’s quote that I just read to you about his first encounter with Barnes occurred years after their first meeting and years after their fruitful partnership.
With the benefit of hindsight, Edison could recast that story and essentially say something along the lines of “Yes, of course I knew I was going to go into business with Barnes. I took one look at him and I knew he meant business.” And this is essentially what he did say. And I quote, “When a man really desires a thing so deeply that he is willing to stake his entire future on a single turn of the wheel in order to get it, he is sure to win. I gave him the opportunity that he asked for.” But is that what really happened in the famous first encounter between Barnes and Edison? Did Barnes walk into the lab with that thought, I’m going into partnership with Edison, looking like an ordinary tramp and who knows what he actually said and get what he wanted. Was just the thought enough to get it done? No. In that first encounter, the thought was not enough. Barnes did not get the opportunity he asked for. He wanted a partnership with Edison. And in that first encounter, he received not a partnership, but a broom.
Today in many businesses around the world, if this encounter happened just as it’s described in THINK AND GROW RICH, Barnes would have gotten not a broom, but the boot. So what can we glean from this? What you think matters. Your belief, a product of your brain matters. But why does it matter? If you don’t believe, your buyer won’t either. So belief is important because it’s a big contributor to creating that all important meeting of the minds that is inherent in every commercial transaction. But here’s the thing, it’s necessary but insufficient. Mindset is what got Barnes in the door. It got him a job sweeping floors. What got him the partnership with Edison was not mindset, but the message of how he was going to distribute the Ediphone. That’s what sealed the deal. So it’s not just enough to be able to think. You also have to be able to think out loud and to do so well enough that it creates a meeting of the minds between you and your buyer.
What I’d like you to take from this is that if you want to make money and you’re not trading your own money using stocks or derivatives or doing something else that you can do all by yourself in the comfort of your cave, if you are instead in business and you want some clients to buy the amazing product or service that you’re offering, what’s in your mind, isn’t all that matters. Mindset plus message equals money. That’s the formula because people can’t read your mind. What people hear in your message is what causes them to buy, not just what’s in your mind. So that’s what I have for you today my friends. The foundation of our work in the show is going to be based on the formula, mindset plus message equals money. So stay tuned for more on how to do that and thank you for being here today.