Get understanding

The man was wearing a dark gray sports coat, a light blue button down, and a debonair smile. He had a clean-cut look, was well built, and sitting casually in front of a charcoal gray backdrop. The word “Forbes” was etched above him in bold white lettering and the sub-title read “Who wants to be a Billionaire?” The magazine cover was an image of power, peace and control.

A moment ago, this magazine came out of nowhere and slapped on the desk in front of me. Startled, I looked up to challenge but was shocked to see Jim, the owner of my company, standing there. I was stunned because one he never came to the office, and two I haven’t actually spoken to him since starting at the company three years ago.

As I stumbled to say something intelligent, he cut me off. “Quickly, if given the opportunity, would you pick what a billionaire has or what they know?”

“Um, what they have, for sure,” I answered.

Jim – frowned.

“Read that,” he said as he nodded towards the magazine, “and then come find me,” and without waiting for a response he turned and walked away.

My heart sank. Smooth! I said to myself as I watched him walk away. After he disappeared around the corner I slowly looked back at the glossy image. Jim didn’t look like the guy on the cover. Jim had plain brown eyes, short curly hair, and a “dad-bod”. If you asked me, Jim was the spitting image of Seth Rogen (Knocked Up, Neighbors). Not to forget, his professional attire was found wanting. Today he was wearing a plain white linen button-down, dark tan shorts, and flip-flops.

So like I said, no similar features, but he did have similar wealth. To give you some history, Jim launched his tech company sixteen years ago in Northern California and just recently joined the billionaires club. Overtime I learned from the rumor mill that he has more cars than days of the month, several houses, a massive yacht, a private jet, and a passport with more stamps in it than the local post office. So Jim may not look like the guy on the magazine, but he definitely has a lifestyle of power, peace and control.

My eyes dropped to the fine print, “The peer-to-peer share economy is creating millions of micro-entrepreneurs…” Just then it hit me. For a while now I’ve been badgering Jim’s secretary, Sue, to set me up with an interview. You know, so I could ask him questions about his wealth and how he got his start, but like clockwork, she always shut me down. Maybe this was finally my shot? I considered for moment, and then jumped for the magazine.

Two hours later I find myself riding the elevator up to Jim’s top floor office. Getting off the elevator, I see Sue sitting at her desk in front of his door. As I approached her head snapped up from her computer. However, this time instead of her usual glare, she smiled! She then gave me a wink and a nod in the direction of Jim’s door, and then returned to her work. Well that’s different! I thought to myself. I paused for a moment but then carefully eased past her, still half expecting her to stop me.

His door being opened, I peered in. His semi-circular office was massive. It had vaulted ceilings and three large bay windows on the far wall that filled the room with sunlight. The room itself had several odd artistic chairs, three sofas, a few small coffee tables, and two crescent bookcases outlining the left & right contoured walls. To my surprise, I didn’t see a single desk or computer. Jim was by the bay windows swaying in a brown padded legless chair anchored to the ceiling with cords. At the moment he was reading from a little blue book and sipping from an oversized white coffee cup. Not knowing what to say, I reached across the threshold and knocked on the open door.

Jim looked up, “Come in Vic,” he said and sat up in his chair. He placed his book and coffee cup on the table in front of him and gestured for me to sit in one of the empty chairs across from him. I nodded and walked in. As I took my seat I glanced at his book on the coffee table. He was reading The Greatest Miracle in the World, by Og Mandino. It was a thin book of some sort and I was amused to find that he wasn’t reading something more… technical.

“Do you know why I invited you here?” Jim questioned as he sat back in his swinging chair.

It took me a moment to refocus my thoughts. “Umm, yeah, I think. Because I uh… asked your secretary if I could… have an interview?” I stammered.

“That simple huh? You asked my secretary every Monday for two years,” he stated, “and she told me yesterday that if I didn’t meet with you, she’d quit,” he added with a chuckle.

I awkwardly chuckled as well. I was so nervous.

“So, tell me Vic. What did you learn about overnight success?” he said abruptly.

Huh? I was so confused, but then realized he was referring to the magazine, now sitting on my lap. I thought back to what I read and recalled several articles explaining the perils of instant wealth.

“Oh. Well, basically… that… it… can be unstable,” I answered timidly.

“How so?” he inquired.

“Well… the one article said that most lottery winners lose their wealth within a few years,” I regurgitated.

“Go on,” he encouraged.

“And… that… over 90% of all inherited wealth is lost by the third generation,” I responded, still somewhat apprehensively.

He didn’t respond. He just sat there, looking at me. I shifted uncomfortably in my chair,

“Oh, and there were also a few case studies in here about how a high percentage of business owners also lose their wealth very soon after gaining it,” I added as I tapped the magazine.

“And why do you think that happens?” he pressed.

This time I didn’t answer immediately. I looked down at the magazine. I really wanted to give him a solid answer. The articles and case studies listed a bunch of stats but didn’t produce any concrete conclusions. What did they all have in common? I thought to myself. I slightly bent the magazine between my two hands and thumbed the edges. After a long moment, a thought came to mind.

“Maybe… because… well most just never… develop the right mindset about their wealth?” I answered cautiously while slowly looking back up at him.

“Exactly,” Jim responded.

I sighed with relief.

“It wasn’t the money that caused their failure, was it?” Jim asked rhetorically, “It was their lack of understanding. Whether you win it, inherit it, or build it, having wealth without comprehension,” he said as he tapped his left temple, “will inevitably lead to loss.”

I nodded in agreement. I felt my jitters starting to fade. Jim was actually quite personable, I thought to myself. I also started to realize that my “interview” was not going the way I planned. In fact, I’m the one being interviewed!

I decided to take control, “So, what do you know about wealth?” I asked, somewhat aggressively. “I mean, what do wealthy people know that we don’t learn about in school?” I added in a softer tone.

“Schools teach…” Jim started to say but then stopped mid-sentence. He paused for a moment and then started again with a change of direction, “Vic, If I asked you to describe wealth, how would you explain it?”

“Well um, I don’t know. Somebody with a lot of money?” I answered weakly.

Jim sat up slowly, “Okay then, so let’s say your neighbor makes a hundred thousand a month but has to work ninety hours a week. Would you say that he’s wealthy or that he’s just rich?” he asked with a smirk.

Ah man, I walked right into that one.

“I’d say he’s just rich,” I conceded.

“So then, what is wealth?” he asked again.

“I guess it would be the combination of both time and money,” I replied.

“There you go,” he said as he pointed at me. “See, you first need to know what wealth is before you try to understand it.”

Jim shifted the subject again, “Did you know that our schools were modeled after the Prussian Education System?”

I shook my head no. The question took me off guard. Every time I think I know where he’s going, he changes direction, I thought to myself.

“Yup, in the late 18th century American business owners were shorthanded on semi-educated workers for their factories, and politicians were struggling to get their constituents employed. Thus enter the Prussian Education System,” Jim said as he ushered in an imaginary system with his hands in the space between us. “They chose it because it excelled at mass producing citizens who could learn and execute task-oriented requirements.”

He continued, “Unfortunately, not much has changed over the last hundred and fifty years. The education system is the same, and the modern-day factory has just evolved into an office building with cubicles.”

Jim picked up his coffee cup. He took a long sip and rested it on his thigh and sat back in his chair. “Now, I’m not complaining,” he defended, “In fact, I’m taking advantage of the system as we speak,” he stated as he nodded at me, and then over in the direction of his secretary. “However, traditional schooling is an issue if you’re trying to learn about wealth. Remember, the Prussian Education program is not designed to teach wealth. It’s only designed to teach active income,” he said and then paused for a moment, “Do you know what active income means?” he asked inquisitively.

“No. Not really,” I answered honestly.

“Well, there are two ways to generate income. One of which is active income. Active income is when you physically have to work in order for money to be made. If the work stops, the income stops; like being a laborer, a teacher or an engineer,” he explained.

I nodded.

Jim continued, “If you think about it, teaching active income on a macro level makes perfect sense. A job provides wages, benefits, and paid time off. Long-term, and with the right investments, and if the stars and moon align, there is the hope one can retire in their late 60’s with financial stability.” he chuckled.

“The system is also predictable,” Jim went on. “If you graduate from high school, you can get a job. If you go on to get a Bachelor’s Degree, you can get a better job. If you get your Masters Degree… well, you get the point. Basically, our society encourages active income because it’s safe, predictable, and needed for the economy.”

“So then, what do the wealthy teach?” I pressed.

“Well, I can only speak for myself,” Jim replied earnestly, “but I teach my children about passive income. I am teaching them how to acquire assets that generate cash-flow without being tied to their time. See assets produce cash-flow whether the owner is present or not; whether the owner is working or not. Think real-estate rentals or dividends from stocks. I teach my kids that if they want lifestyle then they have to either buy assets or build assets,” he stated, “as well as develop the corresponding mindset of course,” he added. “Otherwise, as we’ve already discovered, they won’t be able to maintain their wealth for very long.”

I decided to cut in, “So what does this corresponding wealth mindset entail?”

Jim took another sip of his coffee as he thought about my question, “Well, for example, look at the difference between an employee and a business owner and the way they think. The employee locks the door at closing time, even if new customers are about to walk in; the other keeps the doors open until every approaching customer is served. One spends their earnings immediately on goods and entertainment; the other invests into assets, and then overtime lets the cash-flow from their assets buy their goods and entertainment. One gets to the end of the day, clocks out and says “job well done”; the other clocks out and says “how can I move forward?”

Jim took a breath, “Now I know I’m generalizing all employees here, but for the most part I think we agree here, no?” He didn’t wait for my response, “Hell, I know it’s true because I was one for a time. Anyway, to get to my point, the typical employee mindset is short-term feel good thinking, but the business owner mindset is a long-term continual improvement focused,” He said and then turned slightly to me, “Does that make sense?”

“Yes, yes it does,” I replied, and it actually did – for once.

“Great. Further, you’ll need to learn about risks,” he declared. “Now let me be clear, I said learn about risk, not avoid it. If you avoid risk you will never be successful, do you understand?” he asked pointedly.

I nodded.

“Good! Learn how to evaluate risk and act on any opportunity that you feel – I’d say – sixty percent sure about. If you wait until you’re eighty percent or more, you’re too late. And that’s not even coming from me, that’s advice I learned from Bill Gates,” he elaborated.

I nodded again.

“Lastly, but most importantly, you must develop your dreams.”

“My dreams?” I asked sarcastically with a slight snicker.

Jim didn’t respond. In fact, Jim didn’t say or do anything. He just – stared at me. The room became quiet, real quiet. I saw Jim’s jaw was clenched. I don’t know what I just said, but I really stepped in it, I thought to myself.

I wasn’t sure what to do, so I just gave him the most apologetic look I could muster and softly said “sorry”.

After a few more awkward moments, he finally released his jaw. He then started speaking again, slowly and stern at first, “Take… time… to think about… what you really want out of life,” he then returned to his normal pace, “You must have something that will keep you from quitting when times get tough, and times will get tough – trust me. Find something that will keep you going when business prospects say no, when friends or family criticize you, and when haters mock you on social media,” he stated earnestly. “Most of it will happen whether you know it or not; whether you believe it or not. In fact, it’s probably the number one thing that amateur, I mean new, business owners can’t handle.”

“Why do you think people are so critical?” I questioned.

“Oh, that’s easy,” he said. “Most people will criticize you for two reasons. First, just by you moving outside the active income box, as in your day job, it indirectly highlights theirdesire to stay within it. As a result, they feel the instinctual need to defend their decision by criticizing yours,” Jim answered, “the ego is a sensitive matter, ya know?”

“I gotcha. And the second?” I asked.

“And the second?” Jim asked himself as he sat back in his chair, and then answered his own question, “Well, sometimes people just get scared of what they don’t understand,” he said curtly. “Take Steve Jobs for example. He felt so strongly about computers that he dropped out of college to start a computer business. Now, do you really think his parents understood him when he dropped out of college to launch a ‘widget business‘? Remember, most people didn’t know what personal computers were at that time. And better yet, what do you think they thought when Steve decided to set up his office… in their garage?”

After a short pause, we both broke into a good laugh.

“Probably not,” I replied, still laughing. I’m glad the mood is light again, I thought to myself.

“We laugh, but do you know that Apple is now worth over a trillion dollars? A t-r-i-l-l-i-o-n dollars!” he exclaimed with open hands. “Only now do people understand that his fanaticism was really just a higher level of unbroken focus,” Jim exclaimed.

“Wow. I never thought of it that way.” I said.

I paused for a moment and then went for it, “So what was your dream?” I asked.

Jim smiled slightly, but instead of answering my question he looked out the window. I followed his gaze. On clear days like today we could see the ocean, a few boats in the marina, and a flock of seagulls heading out to sea. I could tell he was focusing on the birds.

After a long moment, he responded, “I wanted to be free. Like those birds.”

I looked at him quizzically, “Free?” I pressed lightly.

“Yes,” Jim said still looking out the window, “I wanted to be truly and honestly free.” He then looked back at me, “Did you know that Mark Cuban [Shark Tank] retired when he was only 26?”

I shook my head no.

“Yeah, one day he just stopped working and he sold his company. His biography said that he just wanted to be free of responsibility and travel the world. So, he sold his company, invested into assets, and retired. Sure, he came out of retirement a decade later, but you can tell that he’s always in control. He chooses when, where, and how to get involved,” Jim declared. “And I wanted that lifestyle. In fact, I burned for it. I wanted to make my own decisions, create my own schedule, and set my own salary. I wanted it so bad that after reading his bio, I quit school and started chasing down the passive cash-flow I needed to fully control my life.”

Jim looked around his office, “Unfortunately, it took me another five years before I even got my first victory. And it was another ten years after that before I was able to hire Alex [the company’s current CEO]. When Alex took over all the day-to-day mess and I was finally free. Nowadays, I only get involved in the projects that I choose. Sound familiar?” Jim questioned proudly.

“It does. It sounds amazing. So why don’t more people pursue passive income?” I questioned.

Jim ignored me.

“You know, my journey all started with a simple idea. When I was still going to college, I worked part-time in the admissions department that received all the incoming applications. Organizing them was chaotic and time consuming. Reviewing them took even longer. This was before everyone turned to electronic applications of course. Anyway, I felt like there had to be a better way, and I was getting good at coding, so I pounded out a program within a few months. Within one week of using my software, they were organizing applications in minutes which used to take hours. I knew I was on to something so I dropped out of school to work on perfecting my software. It took me another sixteen months until I was ready to approach other universities.”

He continued, “It was rough at first. I got shut down a lot. I was really discouraged,” Jim stated, “Now, I knew my product worked, I just didn’t know if I could make it work,” he sighed, “What I mean is, I started doubting my ability to help potential buyers believe in my software. At first, I was cocky and naïve, but after thirty-three rejections in a row, fear and doubt was starting to take over. Luckily, I had a mentor who encouraged me to fight that fear and doubt by spending time visualizing my success. She basically kept my focuson my goals, not my setbacks.”

“How’d you do it?” I asked.

“Well she always said to get and keep my dreams out in front of me, so I created a photo album with all the things I would do when I was free. And I spent hours crafting that album; selecting the perfect photos and fabricating others when needed. By the end, it fully embraced my vision of freedom and I looked at it day and night. It was filled with photos of sleeping-in, playing golf, nice clothes, and jet skiing. It had detailed shots of luxury cars, fast boats, and big houses. It had several pictures of restaurant menus I couldn’t afford, plane tickets to far off places, and front row seats to every sporting event you could imagine. Heck, I even added personal pictures, like a father coaching his kid’s football team and I wasn’t even married at the time. That first album was amazing,” Jim reminisced.

He continued, “You know what I didn’t have in it? I didn’t have pictures of traffic jams, office meetings and ever growing to-do lists. That’s for sure,” he chuckled. “You may mock the concept of dream casting, but that album kept me from quitting many, many times.”

“Now, to answer your question, it’s not that people don’t want passive income,” he finally answered. “In fact, I have a Gallup Poll over there in a magazine that proves it,” Jim said as he gestured to the bookshelf behind me. “It states that like over 55% of all Americans want to start their own business, and something like 70% of all millennials. Mainly because they want more time, more money, or more control over their lives.”

“However,” Jim injected, “the poll also asked why they hadn’t started a business already, and I was not surprised by their answers. They gave excuses like risk, knowledge, and capital. But the most common, and worst one I read, was time,” he said contemptuously.

“People always use time as their go-to excuse for not doing this or not doing that, and to be honest, it’s weak. Now some actually do think that one day they’ll have more time, but to be honest, it’s an illusion. So you’re telling me that you’re gonna have more time when you have toddlers running around, or when you have more debt from car loans and a house mortgage, or when you have more job responsibilities from promotions? Hah! Bet me,” he snuffed.

He continued, “Look at it this way, if you had a guarantee that you would be successful at XYZ business venture, then you would move heaven and earth to figure it out. Therefore, time is not the reason; it’s just an excuse to mask the real reason – fear. Whether it’s the fear of failure, the fear of wasted effort, or the fear of being misunderstood, fear is what keeps you from taking action. I know because I had the same fears,” he proclaimed.

“Here’s my point. Even though Americans say they desire lifestyle income, most won’t pursue it because of the fear. As a result, they’ll stick with active income because it is safe and simple,” Jim concluded with a sigh.

“What made you different?” I asked bluntly.

Jim responded quickly, “I’m no different at all,” he stated, but then added subtly “other than I had a mentor who advised me to make my desires greater than my fears.”

He let his answer hang in the air on purpose.

I caught it and nodded my head in agreement.”Outside of having a dream, a mentor is the most valuable asset you can have. As my mentor once put it, ‘without a dream, it’s like trying to navigate a parked car. Without a mentor, it’s like driving without a GPS’.”

“Okay, so what if you’re not afraid, but legitimately just don’t have the capital to get started?” I challenged.

“Well, twenty years ago you’d be out of luck,” he responded. “Your only option was through the industrial age business models and those require massive upfront capital, a store front, and employees. However, nowadays the informational age business model, or the “digital model”, is changing everything. I mean look at it, digital businesses are cutting down on risk, overhead, and physical effort. It’s also allowing people to form partnerships, which spreads the workload, decreases time requirements, and minimizes the financial danger,” Jim acknowledged, “Not to mention, your smartphone is the store front and scrolling is the new version of window shopping.”

“How so?” I asked curiously.

“Well, traditional store fronts and offices are no longer required to bring a product or service to market, are they? You can now use your smartphone or tablet to create apps, manage portfolios, run blogs, take payments, write e-books, and so on,” he affirmed, “As a result, people don’t need to have offices or traditional work hours. They can run their businesses from a the local coffee shop, at home, or even through a new concept called ‘shared-space’, all the while maintaining full-time employment until their side business is big enough to take over.”

“So, what’s the downside?” I asked skeptically.

“Well, it can take a lot longer to see true profits. Sure, you may see some quick simple returns, but it’ll probably take a year or two before you start seeing a residual four to five figure income,” he responded.

“You have to keep in mind though, most ‘micro-entrepreneurs’ only invest ten to fifteen hours a week on their assets. Most traditional business owners invest ten to fifteen hours a day to get off the ground,” Jim added

Jim sat up, “Overall, I would say that most budding entrepreneurs should focus on developing small assets first and then larger assets later. It’s less risky than a traditional business and has more upside than just a 9 to 5.”

Jim looked at his watch, a massive Breitling, and I recognized the universal signal.

“Well, I know you’re a busy man and I don’t want to keep you tied up, but do you have any other last-minute tips?” I slipped in as I stood up.

Jim downed the rest of his coffee and placed the cup on the table in front of him. As he was letting go of the handle he paused and took a long hard look at the little blue book still sitting there.

“Yes. Earn mentorship,” he finally said.

“Earn mentorship?” I asked.

He looked up at me, “Yes. Earn mentorship,” he stated again. “As I said before, having a mentor is the most important asset outside of a dream. If you want to skip years of frustration and lost profits, lower your ego and seek a mentor. Find someone that has the lifestyle you want, and then do whatever it takes to get in their back pocket. And when they suggest an action step, don’t make excuses, just do it! The biggest problem with our society today is that we accept excuses way too easily; a good mentor will not. You may not feel like doing this, or feel like doing that, but remember you don’t have to like it, you just have to do it,” he hammered again.

I nodded slowly. I was hoping for something deeper.

He caught the look of hesitation on my face. “Look, think about it this way, right now Satya Nadella is the CEO of Microsoft and he is mentored by Bill Gates. Bill Gates is the wealthiest person in the world and yet he is mentored by Warren Buffet. Warren Buffet is one of the top investors in history but he had a mentor too. I believe it was Benjamin Graham if I’m not mistaken. My point is this, if the most successful people in the world have mentors, don’t you think you should as well?” he protested.

“Actually, I do. Thank you,” I added as I set his magazine on the coffee table.

He nodded and picked up his blue book. I turned to leave but then decided to take one more shot, I turned back around.

“So, what does your mentorship schedule look like?” I asked optimistically.

Jim didn’t even look up, “That Vic, you’ll have to earn.”

“Challenge accepted!” I boasted as Jim… ignored me, but then again I swear I saw a slight grin.

-Bobby Campbell