I’m doing an intro because I can’t believe I’m talking to one of my business heroes, Mark Ford, author of Ready, Fire, Aim, the guy that has helped over 100 businesses and he describes them all on this podcast here. I also recommend people check out MarkFordBook.com to see what he’s working on. Thanks and I hope you enjoy the podcast.
This isn’t your average business podcast and he is not your average host. This is the James Altucher Show on the Stansberry Radio Network. Click here to listen to the full interview.
James: Okay, we’re in the cubicle. This is a good example though where he’s being an intrapreneur and you were talking about companies where you’re either the type of company where you’re becoming an entrepreneur or you leave and find one. But what if I also want to make that transition to entrepreneurship? You’re a big believer in information products, products that you could make relatively cheaply and market even relatively cheaply and that’s a good way to kind of get your feet wet in terms of entrepreneurship. But again, I’m really capable and I’m scared because I’ve never done that before.
Mark: Well, it just so happens I wrote a whole book for that person called The Reluctant Entrepreneur. I myself was never an entrepreneur per se. I was an intrapreneur. I created businesses within businesses and then while I had businesses and I was making more money than I needed then I would invest in other businesses and start other businesses with my partner, other partners and so and so. My thing is never leave your day job until the income from your side job is equal to your day job’s.
James: That was my exact technique when I was at HBO.
Mark: Well, there you go. Great minds think alike. What I would say is this is a real challenge. It’s easy to tell people and motivate people but how do you actually help people go beyond that? That’s what I’ve been doing since about three or four years since we started this business called the Palm Beach Research Group. My contribution to it, I agreed to go into it if I could focus on creating wealth in the non-stock/bond or non-financial areas.
James: Which is really important because stocks and bonds aren’t going to change your life if the economy is completely changing and that’s what’s happening.
Mark: And they do go up and down. One of the decisions I made after I decided to get wealthy was I had this thought one day, wouldn’t it be cool if every day I got just a little bit richer? Because you’ve got to remember, back then we already invested in a business, a publishing business. Even though I had no interest in it, I was watching what was going on and I was seeing that a lot of people were making money, losing money, especially people that were doing penny stocks, people that invested in mining stocks. There were so many volatile aspects of that market. What way is that to make ends?
So I thought what if I just got richer every day? That was one of the first things I said. I will do whatever it takes, even if it’s just a nickel richer. I will get richer every day. I never want to get poor. So I developed all these strategies and one of them was multiple incomes. You have to have multiple incomes. The other is I kept a very minimum amount of money in volatile investments like stocks and so on. In fact, the only thing I really did in stocks were Index funds.
My whole approach and my recommendation for people who want to get outside of that and to do their own is to keep their day job. Just work extra hours. You do have those extra hours. You can be better than 80% of the other employees working 25 hours a week. Even if you give your 48 hours, you’ll be in the upper tenth percentile. What I did was I worked 80 hours a week. I’m dying to talk to Tim Ferriss. I don’t think he’s ever worked a four-hour workweek in his life but that’s what you have. You do have those extra hours.
James: I agree with you but I think what he did was he figured out once his first business was rolling, he then fired the difficult customers and outsourced everything. He told me he originally wanted to call his book the Two-Hour Workweek because on his original business, that’s all he was working. But then he was then working the 80 hours on marketing the books.
Mark: Right. I think he’s a very smart guy. Since I started listening to you, I started listening to him, too. I’m definitely a little competitive so I wasn’t going to listen but he’s a very fun guy. He makes a lot of sense. It’s a good angle. Look, the book sold like crazy. How could I, Mr. Marketing, be upset with him for gilding the lily a little bit? Anyway, I think he uses extra hours.
The reason why I tend to focus on information marketing, I started doing this when I started writing Early to Rise as Michael Masterson in the year 2000. I went through all the information publishing areas, all the ways you can do that and I was writing stuff that nobody was writing. That whole market is flooded with experts and pseudo experts right now that teach people how to do that.
We have in our program, we had about 14, 15, maybe 18 information publishing, advisory, information-related businesses that you, people can do on your own. It’s called the Extra Income Project. I would write an essay of about 3,000 or 4,000 words, sometimes 5,000 words, where I would describe from my point of view all the businesses that I’ve been in or owned or managed or consulted with. I would describe how the business looks and feels but they were all businesses that you could start for a reasonable amount of money. You could make a reasonable amount of money and so on.
James: What’s an example?
Mark: Well, you could become a copywriter for an example. I started that business teaching people how to be a copywriter many years ago because it was a big problem, finding copywriters in our industry. We have a business called American Writers and Artists, Inc. that does nothing but that. They have thousands of students. Agora probably hires a hundred copywriters a year and I’ve yet to meet one in the last five or six years that wasn’t at one time a student of this business. So you can go into the business of teaching people how to be copywriters or you could become a copywriter yourself. It takes some time to learn how to be a copywriter.
James: And just think about it – copywriting is kind of this specialized ability of writing that is extra persuasive, you might say.
Mark: Well, I would say that technically what it is is writing advertising copy of any kind.
James: And most people don’t realize that that’s actually a skill. I would say the average person doesn’t know that there’s a special skill required.
Mark: Right. In fact, when we started this business, we got all kinds of hate mail from copywriters because I had by that time trained 100 people to be copywriters personally. We were saying I’ll teach you how to become a copywriter and they were very upset because they thought that they were Hemingways and Fitzgeralds and so on and they were just far from it. The level of literary quality in advertising copy is very seldom very high. It is occasionally, David Ogilvy and people like that but generally speaking it’s quite low. The persuasion techniques can be taught and can be learned. I have taught guys that are basically illiterate to be pretty good copywriters.
So there are skills you can learn and there are plenty of people out there that understand them. So you can learn that. In that program, if you go into direct response advertising writing and particularly if you want to write investing or natural health, you can easily make $100,000 to $150,000 a year. At Agora, we have several people that make over $500,000 a year.
James: And what they’re doing is they’re selling what you read whenever you get an email like 500% opportunity potential, click here or buy more. I’m simplifying it really but that’s a copywriter’s writing on average, the newsletter writer who is writing the newsletters.
Mark: Right. A copywriter that would try to sell a newsletter by promising 500% is not a very good copywriter, in my opinion. But yeah, that’s the idea. There are all kinds of them. You could be a copywriter for charities or for political groups. You could attach that skill to passions if we get back to our passion discussion.
James: Do political groups realize they need copywriters or they just hire the right one?
Mark: Oh no, they hire the best.
James: So they know.
Mark: The whole industry, the whole political world has changed in the past 15 or 20 years because of copywriting. Part of Obama’s great success was from direct mail copy. The Republicans originally mastered it. There was an organization—I forgot what it was called—that basically was creating all the funding for the Republicans. Then the Democrats finally decided they would dirty their fingers in and they’ve been raising billions of dollars that way. The NRA, any kind of advocacy groups, they all use copywriters and if they had money, then you’re going to make a lot of money. If it’s a poor group, if your passion is for some missionary work in Angola, you’re probably not going to make a lot of money.
James: Well, let’s take the political situation. A pathway might be I’m sitting in Proctor & Gamble. I’m going to find the local candidate. I’m going to learn a copywriting skill and write copy for him and then I can show other candidates hey, look he won. I wrote the copy and then you could start getting say 12 candidates as clients and now you have a business.
Mark: Absolutely. In fact, if it’s a world that’s that circumscribed as the political world is or even fund-raising, you won’t have to tell anybody. If you write a package that works, everybody will know about it. What generally happens is that kind of success, if you’re very good it happens once every ten packages you write. So generally, people don’t have those big hits. But if they do good work, they get better and better and then they get to write higher profile things and their compensation. As we said, we have a whole business that teaches people every aspect of it. But that’s just one way. It’s an obvious way of making money but depending on how much money you want to make, you can make money by buying and selling products online.
James: Like what?
Mark: Well, you can make money buying and selling collectibles. There are all kinds of businesses out there. I had an interest for a while. I collect certain things and I got an interest in cigar lighters, old cigar lighters. I went online and sure enough, there’s a whole market out there. If you know how to become a collector, a dealer, you’ll focus on one area, you’ll learn what things are worth, you’ll buy them cheaply and sell them.
James: How will you know to buy them cheaply? Won’t everybody know these are valuable?
Mark: The margins do get smaller on the internet because everything’s available. It’s happening to every aspect of the industry. But you have to really focus. I’ll give you an example. I was at a store, a fancy clothing store and they had these very cool old books, vintage books out there, coffee table books. I was going to pay $180 for it because I was very excited. Cathy didn’t want to pay $180. She goes online right away and finds the same book. This was the most obscure book and man, I couldn’t believe it was online. There must be 30 in existence and 18 of them were listed. So there’s somebody out there that knows these types of books—I don’t how to describe them—and knows them so well that he’s going to be out there buying them when people—
Obviously, what you’re doing in any market is when you’re buying and re-selling, you have to be smart enough that when you see something that’s underpriced you buy it and then you sell it at a markup. When you’re in a market that’s beginning where there’s a large interest in it, then you can make a lot of money. For example if you decide to buy surfboards, vintage surfboards or some kind of surfboards, a friend of mine, Steve Sjuggerud, bought up a bunch of them. He had a very interesting theory. You buy what your generation thought was cool when they were in their 20s or so and then when they hit their 50s you sell it. I think this is brilliant actually.
James: That’s a long-term holding.
Mark: It’s long-term, yes. He’s a long-term guy. Anyways, we have like 18. You can be a graphic artist. You can be an editor. There’s a huge demand for editors in business. I know four people that are looking for editors right now and they don’t know where to find them. Well, we’re looking for an editor right now on our projects.
James: There you go.
Mark: But the problem is people need skills and they need skills in our industry. So American Writers is now going to start training people to be editors. You can make money as a photographer, not much but you can make money. We have a program like that. There are so many. This is on the information side. I knew I should have prepared myself and brought you a list.
James: No, that’s okay because what’s interesting there is people often ask me, “I have $5,000. How should I invest it?” and I often tell them buy a camera, a really great camera and a book or watch YouTube videos on how to be a good photographer because all you have to do is one or two weddings and you’ve just made your investment back and now you’re going to make 3,000% on your investment. Why buy a stock?
Mark: That’s a perfect example. Being a wedding photographer is always in demand. This isn’t on information. Well, I guess that is information.
James: But then you could write a newsletter on how to be a successful wedding photographer.
Mark: Absolutely. And because there is knowledge, there are things to be learned there. So I wrote like 12 or 14 essays and all of them but most of them were on the information side. Bob Bly, he’s just an amazing guy. He’s doing another 12 of them so we’ll have 24. But I’ve also asked him to do something that are not information-oriented because we’ve got to be honest. To be good in the information industry you basically have to be pretty smart. You don’t have to be brilliant but you’ve got to be a pretty smart person because you have to learn some part of the industry better than most people, not better than everybody but better than most people. Then you have to learn how to market and so on.
There are a lot of people that read our publications that I know are either too old or they don’t have that kind of smarts but they can do fine, too. There are plenty people that are wealthy that aren’t particularly brilliant so I feel committed to teaching people how to develop their own carpet cleaning business, for example, or a business maintaining lawns. You can get very wealthy in Del Rey beach. There a thousand-one services but probably only two that are any good because they’re all terribly managed.
James: So what’s like the secret of the two out of the hundred?
Mark: Well, amazingly good service. The secret is that most people that go into that business are really irresponsible people and don’t do good jobs, don’t know what a good job is.
James: So if you just show up.
Mark: Show up, do a good job and talk to your customers. Make them happy. These businesses require less skill in a way except basic human, emotional intelligence-type skills. So you can do that. Or you can develop a specialty. The kind of grass I have here is not common in South Florida but it’s very expensive to maintain and there are thousands of these properties from here to Palm Beach and you can make a lot of money doing it. You can make money starting a service putting up Christmas lights and taking them down every year. I have a friend whose first business he started, he had a Guatemalan wife that couldn’t speak service—he started a maid service around here and he ended up with 40-odd maids. So there are all kinds of businesses also outside of the information area.
But every business has two parts. One is the product which could be a service. If you ask me about lawn service, just give better service. But then you have sales. The sales part is pretty easy for those kind of businesses. What he did is he just went up to the people’s doorknobs and left a note, but a handwritten note and that’s not the typical thing. If I ask you James, if you wanted to start a lawn service, you’d get the feeling from what it’s priced and you went up to and you wanted to get your first job, somebody to try you out, you wrote a handwritten note that said, “I’m James Altucher. I’m new in the business. I’m an honest guy. I’d like to show you what my business is. I think I can do it, make your lawn look twice as good at 10% less. If you give me a shot, I’ll do your first service for free.” If you put that on a thousand homes, do you think you would get the job?
James: Yeah, particularly if I added, “I see that you have this type of lawn in your background.”
Mark: Even better.
James: I was in Thailand and they had this kind of lawn.”
Mark: Perfect. I’ve got to hire you for me next—if we ever get into lawn service together.
James: I got first learn how to use a lawnmower machine.
Mark: That’ll be our retirement day. The point is after that, it’s just numbers.
James: And you test. You might try one type of letter here and another type of letter there to see what works.
Mark: Absolutely. They’re the same principles that you’re doing over the whole world because the internet is growing.
James: And I can do this while I’m at cubicle. I can go out at night and put the ad, hang them on people’s doors or we’re sending out emails or rent an email list or whatever.
Mark: And everybody has an otherwise unemployable friend or relative that you can get to do the actual grunt work while your business is growing.
James: So okay, I’m in my cubicle. I’ve come up with an idea that people need. I’ve come up with the basic technique for marketing it. I’m going to wait until I can equal my pay before I’m quitting. What next piece of advice would you give to the start-up entrepreneur?
Mark: Well, the book that you looked at last night, Ready, Fire, Aim is all about that.
James: How did you know I looked at that book last night?
Mark: Because I had said to somebody I can’t believe he’s coming to me. This guy interviews Tony Robbins. What am I going to say to him? I’m a little nervous about having this interview and Giovanni wrote me back, “Well maybe he’s nervous, too. He just asked for your book.” I felt better about that.
James: No, but I asked for the Living Rich book not the Ready, Fire, Aim.
Mark: I know but I said send him the Ready, Fire, Aim book because to me it’s more interesting. The Living Rich book is a good book but Ready, Fire, Aim is really about this core thing. It’s about how you get a business from zero to a hundred million dollars.
James: There was something very interesting about Ready, Fire, Aim I wanted to ask you about. There’s kind of an evolutionary aspect to it because you had divided up the four types of businesses: 0 to 1 million, 1 million to 10 million, 10 to 50 million and then 50 to 100 million and beyond. But that also implies a certain number of people at the business and I think that’s evolutionarily speaking more interesting in the sense that we grow from tribes where everybody knew each other to let’s say groups of tribes where you didn’t know everybody but you could gossip about everybody and then kingdoms and civilizations where you have to have a story like we’re the best beer in the world or we’re the best country in the world. You have to have a visionary story that bonds people together so they could work together.
James: I thought you divided it up in kind of maybe a subconscious way along those lines.
Mark: Well, it’s more than subconscious. In fact, I think I did mention it. I was grappling with the idea of whether I should divide it up. It could have been numbers of people. I thought I talked about it in that book.
James: You said you thought you could divide it up in terms of numbers of people and I thought the numbers were specifically almost like evolutionary numbers.
Mark: Right, and in one of Malcolm Gladwell’s books, it might have been the Tipping Point, he goes into this idea and it’s an idea that I always think that he’s been reading my newsletters because he always comes up with stuff after I do. I just want to say for the record that I know it wasn’t his idea—he got it from somebody else about the 10,000 hours?
James: Yeah, he got that from some guy in like 1991.
Mark: I’ve got to find out who that guy is because I wrote that essay ten years before that book came out. My number was 5,000 hours and this guy, whoever he got it from, probably actually did some research. It was early. If it was in 1991, he was ahead of me. I did not read his research but I was just thinking about how long it takes to become good at something. I completely lost track again, James.
James: So does it take 5,000 hours to become good at something?
Mark: Well, my rule is it take 1,000 hours to be competent—in my first essay, this is what I wrote—and 5,000 hours to be a master. I realized later after I wrote that, I changed the essay that if you have somebody that can help you, can teach you and mentor you then you can knock 30% of that off because I realized I was in the business of helping and mentoring people so I wanted to give them an incentive to keep reading my stuff. But I think that’s roughly true.
James: Yeah, that’s a good point.
Mark: I thought about Spanish. I thought about the languages I’ve learned, learning musical instruments, all the experiences that I had, different kinds of complex skills and then I thought I think it applies directly to everything. It applies jiu jitsu. I learned jiu jitsu anyway. I think it’s basically, too—I don’t know. Who knows whether it’s 5,000 but the main idea of that is that—
James: Whereas Tim Ferriss knocks his down to four hours.
Mark: I know. I know. He did it again. I heard him just yesterday. I was listening. He said he could learn to be fluent in any language. Actually, what he said was true. He said you can become fluent in a language in some number of weeks and I became fluent in French in ten weeks so he’s right.
James: Let’s say to get competent at business, at doing a business.
Mark: The four stages I talk about, yeah, we’ve talked about something interesting there which is how do businesses grow? I try to classify it in terms of dollars only because I thought it would be more interesting for people to start off with. I’m going to get to a million then I’m going to get to 10 million.
James: Right. It makes you feel competitive.
Mark: Right, it’s fun.
James: I’m going to hit this mark then I’m going to get to that mark.
Mark: But a lot of businesses, the number of people, probably more of the dynamic of the business and how it changes depends on the number of people. There have been some number of studies and I’ve done this but my feeling is always you can only directly relate to six, seven or eight people. I think Malcolm Gladwell mentioned that directly. The thing about a business is when you’re a business owner and you hire seven people, those people only need one skill primarily, the skill of keeping you happy to keep their jobs. Then each of them is going to hire their own seven people. Now you’ve got 50 people.
The people that you hire, however great you think they are, they might not be skillful at training or teaching or inspiring those other people below them but at least those other people below them can see you through them because when you’re in an office of 50 people, they always see the boss and they see their boss interacting with you so there’s that kind of communication. Smart people like I was when I entered that, the story I told you when I sat down at lunch and I said sorry, I’m with that guy, I could do that because there were only 50 people or less in that office. But once you get to the next step, 350, 7 x 50, then you don’t see the boss anymore and you don’t really know what the core culture is and what’s important. Then the whole business can break down, you can be in a political environment and so on.
So for me, from an owner’s perspective of the business, that creates problems. I could say at 350 people, once you go beyond 50 people your business develops some real potential problems and challenges. So it is partly that. But it’s also partly cash because when you’re in that first level 0 to 1 million, the whole big challenge is learning how to make an efficient first sale, how to bring in a customer cost-efficiently. That is your number one job. If you don’t do that, your business won’t work. 80% of the people when they get involved in business, you know how to read them. Well, I’m talking about real entrepreneurship, not starting a business that you plan to sell to an internet company. That’s not something I know anything about. There’s a whole different idea there. Well, actually the sale there is the sale to the internet companies so I guess it would apply.
James: Right, that’s your revenue.
Mark: Right, but from my point of view, the more traditional type of company, until you get to $1 million dollars, 80% of your time has to be spent figuring out how to sell that product. So if it’s a lawn service company, it’s doing that and testing it. We talked about what letter works better, better on hanging on the door know or sending an email and so on so that you get a customer efficiently and then you have cash flow. Cash flow solves all kinds of problems and also gives you all kinds of opportunities.
Then your business grows and then you get to this other threshold where everything is going quite good but the business starts to stall at about $10 million. This is very common. It stalls because you have one way of bringing customers in, basically one line of products and you push that particular monolithic path to its limits and it’s just hard to grow it after that. Then what you have to do is you have to identify what it is you’re doing, are you fish or are you fowl, your marketing, what kind of products are these, what are you really doing and then you start to replicate.
In that second stage, the skill that you have to develop there is the skill of innovation and speed because what you need to do is you have to replicate these things by innovating different versions of it but you have to test them very quickly. You can run out of money very quickly. You have to have a very efficient way of making the business grow without losing money.
Then the third stage—I don’t know what number I had in that book—is when you do have 350 people and your business needs to be corporatized. It needs it because even though you’re still making tons of money because you’re doing such a good job on innovating and replicating products and promotions, what you haven’t done so well is refining your system. Your IT system is slow. Your accounting department can’t bring you current accounts for two or three months and things are starting to bleed. Then you’ve got to bring in the managers.
You can if you’re an entrepreneur make the mistake of bringing people from Ivy League schools. I think that’s a giant mistake. Anytime I ever hear an entrepreneur that has a business that’s at least less than a billion telling me he’s hired an Ivy League person, I just know the business is about gone. He’s run out of ideas and he thinks these guys actually know something about small businesses. So you’ve got to bring in smart people like we’ve been able to do, people that understand how to manage businesses but believe they’re responsible for maintaining profits and will tell you the truth. We did that. We’ve done that in all of my businesses pretty successfully. You’ve got to find the right person to do that whom you can trust. At Agora, we have a superb person in Miles Norin and he understands that part.
You get that part of your business organized and then you realize at that time, those bean counters, however necessary they are, they do want to take over the business. The better ones want to take over it even more. We all want to take over everything, right? Then you get to the struggle which other people I’ve talked about, larger companies I’ve talked about of how to maintain a kind of entrepreneurial spirit within a company. The way we did it at Agora and I’ve done it with some other businesses is by fractionalizing the business, decentralizing the business and creating a cooperative but competitive environment.
What we do is we have different publishing companies that all publish the same type of information. There was a time when Bill and I had a lot of discussions about should we have the franchise model where all our hard money newsletters were going to be here, all our stock newsletters were going to be here, all of our option services were going to be there and then we decided that doesn’t work. What you really need are really good people running these businesses that want to compete with each other. But then you force them because it’s your business, to share certain information like marketing information. A lot of the trade secrets are not secrets at Agora. Our idea is the same idea that’s the I have about any skill – we want people to know how people were so successful in whatever their last advertising had been because I want everybody else to learn because I want the whole level to keep coming up. If you’re mad at me because I shared that secret, I’m going to say, “James, you’re smart enough. You’ll come up with the next thing.”
James: You should put out a newsletter about all the secrets, of all the campaigns that worked. Here’s what we tried. Here’s what works. Here are the percentages.
Mark: Believe it or not, we are just finishing a 900-page book that contains all of our secrets and I wrote in the introduction that I know everybody outside of Agora is going to have this, here are your secrets and enjoy them because it’s not about what was done yesterday. It’s about being smart enough to see what was done yesterday and to do something new tomorrow, something not entirely new but just new enough.
James: Well, you bring that up, too, that you don’t always want to create something incredibly new. You look at something that’s worked over and over and maybe tweak it a little bit.
Mark: Absolutely, just a little bit now.
James: Which is different than let’s say an approach like Peter Thiel wrote Zero to One. He basically says go from zero to one. Create an entire monopoly that’s never been seen before. It’s a little different approach but that’s kind of the Silicon Valley approach.
Mark: I don’t really think about anything other than what I know and what I know is the certain kind of business that’s easy to do. You’re just going to do it if you’re scared. You’re going to do it if you’re not brilliant and so on. But I do know this because I’ve been in the publishing and storytelling business for a long time. The stories that we love to hear are the exceptions not the rule. Think about this. We want a story about a thing that became successful, all the tough times we went through, the rejections of the inventor and finally it’s invented or advanced. The truth is for every one of those is 1,000 or 10,000 people that failed. I don’t want to give people advice that has a 99.99% chance of failing and a 1% of getting on the cover of Time magazine. I’d much rather tell you the advice that gives you a much better chance of succeeding and you probably won’t get on—
James: You said advice and we were talking earlier and you said you’re in the self-help industry but you’re not really. You’re really in almost the “help self” industry in the sense that you’re only talking about things that you’ve used to help yourself and you’re sharing those stories. You’re not kind of veering outside of that.
Mark: Right. You embarrass yourself very quickly the moment you—believe me, if you give me a couple of drinks I will veer outside of that and I will embarrass myself but in a sober state, I try to avoid that.
James: Well, let’s talk about your most recent book. I don’t know when it’s coming out. When is it coming out, Living Rich?
Mark: It’s actually out right now. It just went out.
James: Okay, it just came out. I read your individual essays and it’s basically about this idea that everyone thinks they need X amount of dollars but you basically say, why do you need that because for X minus Y, you’re going to achieve the exact same lifestyle? The Y is usually a pretty big number close to X so for almost zero, you get—and Tony Robbins has an example of this in his book, Money where some guy says that my goal is to make a billion dollars and he thought that was a great goal. Tony said why do you need a billion? The guy is like well, I want to buy a private jet. The private jet with maintenance costs like $150 million. Tony’s like you’re only going to use that ten times a year so you don’t need $150 million; you need like $600,000. Okay, now we’ve just wiped $150 million off your number. He goes down the list and it turns out the guy really just needs somewhere between $5 million and $10 million to have what he thought was a lifestyle of a billionaire.
James: I say just. $5 million to $10 million is quite a bit of money but what’s an example tip?
Mark: I think you can do it for much less than that.
James: Well, what’s the minimum viable number that you need to live the successful life?
Mark: I know that occasionally when you asked Tony Robbins a question, he answered you like a politician by telling you a story. I’m about to do this but I promise I’ll come back to it. I want to tell you that I was living in Africa for three years. I was in the Peace Corps. I was teaching at the University of Chad. I lived in basically a mud house with cement walls. I had water running outside, no hot water and so on and so forth. I was sitting on the porch. I was a poor thing from—Angela Ashes was just ordinary for me.
James: Frank McCourt, you refer to the book in, a great book.
James: By the way, he wrote his first novel at the age of 66.
Mark: That’s right. Anyway, so I’m sitting there and it’s raining. This is in the middle of Chad, one of the poorest countries in the world and I’m living in a mud house. I’m making $50 a month, it’s raining and we’ve got to go out there and across the street, I was teaching at the University of Chard, believe it or not, English Literature and Philosophy. This was really bringing them up by their bootstraps. Anyway, there’s a story behind that. I was sitting there and I was thinking. This is bizarre. I just knew that one day I was going to become rich. I thought to myself just remember this – no matter how rich you get, you’re going to live in a big, fancy house one day but it will not be better than this house. I’ve never forgotten that and it’s completely true.
I think we all know this. The quality of your life beyond a certain level has nothing to do with how much you make. I remember when I first made over $100,000 that first year after I made that decision, my accountant told me, “Mark, you’ve done it.” I go what have I done? He goes, “You’ve hit the big time.” This was $100,000, maybe it’s worth $180,000 today and I go what do you mean? He goes, “You’re as rich as you ever will need to be?” I go what are you talking about? I couldn’t get this. He goes, “Listen, the money that you’re earning right now, you can live in a nice house, you can drive a nice car, you can send your kids to school, you can go on a vacation, take your wife out to a restaurant. Everything other than that is just the size of the toy. They’re just toys and it’s the size of the toy.” I thought wow, that sounds pretty much right. But of course when you say that to yourself, you think hell, let me experience those big toys.
So I went through it. I had those big toys and so on and I still—Look, it’s fun to have those kinds of things. But the truth is, and I knew it back then and it has been true now, that the quality of your life has nothing to do with that. What’s worse is in the American economy, the American culture, we’re so attuned to that. Every time, I watch Sex and the City, I want to vomit. It’s such a repulsive view, not that I haven’t watched 60 or 70 episodes but—
James: I did the website for the TV show, by the way.
Mark: Anyway, but there’s a hell of materialistic things. I thought what about all these? Because I’m trying to help people create wealth and this is my big promise so I do everything I can on something on the entrepreneurial side and I’m writing about the investments. I’m trying to cover all bases but some people because of either their age or their values in life, they’re not willing to work 80 hours a week. I wanted to say to those people, who cares? You can live the perfectly rich life in America making the equivalent of more than $100,000 a year, which is $150,000 or $170,000. You did that once. I can’t remember the number. That could be comprised of passive income if you have some investments or whatnot. The quality of your life really will be the same.
In that book, I try to give examples from the other point of view like what is a house? What is a rich house? The house next door, I don’t know if you saw it, is this huge monstrosity. The guy who built it actually was a very nice guy but it’s this huge, ugly—you saw the house. You’ve got to see it. You’ve got to go out and look at it. My house is beautiful. Let’s admit it. It’s a beautiful house. His house is just a big giant. He built it for $6 million. It costs you $10 million today. It’s the biggest, ugliest and showy. He just wants to show people how rich he is.
So he brings me to his house. He’s a great guy and he’s excitedly running me around his house. You walk right in and there’s this huge gilded elevator right when you walk in. You’re like oh, boy is this tacky. Who designed this, Donald Trump? What’s going on here? So I’m like oh. He’s like, “Look at this elevator” and then I’m afraid he’s going to say, “Isn’t it gorgeous?” but he doesn’t say it. He goes, “Guess how much this cost?” I’m so relieved because I’m like oh god, this is going to be fun. So I go I don’t know; what? Ten grand? “Fifty grand.” Fifty grand? That’s fantastic! High-five! The whole tour was like how much he spent on this, how much he spent on that, how much he overspent on everything. So what’s that? Great guy but what does all this show to anybody that has any kind of sensibility? The guys is kind of like a buffoon, right?
I can go down this block and I can show you a very little cottage that the women who owns it probably paid $70,000 for it. It’s worth a lot more than that now but she’s never done anything but take care of it and fill it with all the mementos of her life and it’s the most beautiful place. When I go in there, I admire her. To me, the quality of the house is this. The test of the beautiful, wonderful house is if your guest comes in there who’s not an idiot, he wants you to leave the room so he can look around and investigate. He wants to see what your life really is like. But if your house looks like something that was designed by a decorator like some TV set, what does it say about you?
The truth is from every point of view, there’s no reason to try to get richer and richer and spend more money and you really can—There are actually two parts to the book. The first part is I try to say what do you need to spend to drive around in the world’s best car? Now I happen to have one of them at the time. It’s a BMW, 12-cylinder, not the best eco footprint but I only drive it two miles—
James: I don’t even have a driver’s license so it’s like you’re speaking a foreign language to me.
Mark: Anyway, this is car that is like ten times better than a Maybach but you can buy a three-year old version of the car for like $30,000 and you can drive it for 20 years. I buy my cars and I keep them for 10 or 20 years. It’ll cost you less than a Hyundai. So you’re in a beautiful luxury car and you get the luxury benefit even.
One of the things that matters, the first and most important thing that matters is mattress. If you have to pick out one physical object that matters, it’s your freaking mattress! You’re spending seven or eight hours a night on that mattress. You should buy the best mattress in the world. So we did the most extensive study on mattresses ever done in humankind. This was when I just got this idea of Living Rich. I swear to god, we spent a year and we must have spent $50,000 researching mattresses. Anyway, we have this whole report. To this day, the Living Rich series—we first came out serially—when we still publish that as an essay, we get more response on that than anything else. So there is a potential for it.
James: Because that’s a third of people’s lives.
Mark: Yes, exactly.
James: It rejuvenates you. It’s good for the brain.
Mark: So there’s a job – mattress newsletter or mattress report.
James: Did you get a memory mattress? You got a mattress from the Hotel Benjamin, I remember reading.
James: Because they do have very good mattresses.
Mark: Yes, they do. We did a whole study. So the mattress is one. It turns out you can buy the world’s best mattress for $1,000 or $1,500. You can’t buy one for $200. I don’t actually remember what the numbers are but it’s a mattress you can keep for 10 to 15 years at least. So the whole idea of Part 1 is based what the most material objects are, what are the best and what’s the best value you can get in terms of cost of use, not in terms of the price but the cost of use because everything is about cost of use. You could buy a car that is less expensive, a two- or three-year old car that’s not that expensive but it may not be that expensive because it’s going to need a new this or a new that and it’s going to turn out to be more expensive but it’s just the cost of use.
The first half of the book is analyzing all the most important objects in the world and how you can get the very best one for basically what I call a middle class salary, for somebody that’s making $150,000 a year or a couple that’s making $150,000. If you’re making $60,000 to $70,000 a year, I said in the book it’s very tough. You’re not going to be able to live rich. I’m going to be honest with you. You’re not. You’ve got to go read my other books and get your income up a little.
James: Or pick two or three of the chapters to focus on.
Mark: Yeah, you can still absolutely. Then I have the chapter on eating or wine. Wine is just ridiculous. I love wine. This is embarrassing. I actually have my own sommelier for my house for my wine thing out there. Every month, he comes over, restocks then he gives Cathy and I a lesson in wine. These are things you can do, the frivolous things. I asked him to write for our newsletter. I said I want you to do two things. One, I want you to teach me things about wine so when my pseudo wine snob friends say things, I can correct them. I’m going to give you one really good one right now. When I said that to him, he was really excited. Do you know the wine, Meritage? You’ve seen that on menus all the time?
James: I don’t know. I don’t…
Mark: You don’t drink?
James: I don’t drive and I don’t drink.
Mark: All right, and at this hour.
James: Anything with.
Mark: All right, does anybody drink wine here?
Male 1: I drink wine but I don’t know a thing.
Mark: All right, menu. Can you visualize Meritage?
Male 1: I can see it.
Mark: How would you pronounce that?
Male 1: Meh-ri-taj
Mark: Exactly and that’s how everybody pronounces it, Meritage. Well, it turns out Meritage is not pronounced Meh-ri-taj. It’s pronounced Meh-ri-tāj because it’s an American term. It came out of contest that happened in California and it’s a combination of “merit” and “heritage” so it’s pronounced Meritage. There are very people except our Gordon, our wine expert, but 99% of the wine snobs if you go out to dinner, they’ll say well, let’s try Meritage. You can say, “Well, actually it’s pronounced Meritage.”
James: That’s a great idea actually for a newsletter. Now he can have an alternative source of income. Every month, I’ll give you a myth about wine snobbery at $5 a month.
Mark: Yeah, that would be a great bonus. I told him $30 for red, $20 for white and you can get all the great wine in the world, for less than that even. When you think about what matters, what the experiences are in life that matter, you can narrow them down to get 80% of the experiences. I almost had to write this book because my wife is the ultimate cheapskate. She just will not spend money on anything. We have a very happy marriage because usually one person makes the money and the other spends it. I’m the big spender, not her, so we never fight about that.
One of my protégés when they go, “Are you kidding me?” because every time they go to Paris, they stay at the George V, which is a very expensive hotel. My wife will not stay at a hotel that is very expensive. It’s hard not to be in an expensive hotel. What we do is because I want to stay at the George V is when we go is we stay at our perfectly nice hotel that costs a third of the price but we go to the George V and we spend half a day there. We sit around in the beautiful this and that. We have drinks. We have the best of the George V and then—
James: To get the experience of the place.
Mark: And I always take a photo. I also send it to my friend whose spending $3,000 a day on his room and say we were just at George V just to let you know. That’s what I try to do. The other half of the book is really about time because living well—we started the conversation by talking about time and time is really the most precious resource and it’s all about how to figure out how to make the time that you’re spending the most pleasurable and the most valuable for you.
James: What’s the most important idea that you have out of that?
Mark: Well, there are so many valuable ideas. One of the ideas, the way I do it is I say that there are three levels of experience when you experience anything, say entertainment or educating yourself. I’m trying to talk about life experiences in those terms. What are the types of experiences you’re having? I don’t know if I did it in that book or I did it in a previous essay but I said there are basically three levels. There are experiences that enrich you, there are experiences that are kind of neutral and there are experiences that deplete you.
Let’s talk about watching movies, for example. To me, there are very clearly those three kinds of movies. There are movies like Schindler’s List that make you a bigger and better person. You go to Schindler’s List and you walk out of there and you’re like I’ve got to do something more with my life. I’ve got to be a better person. Those to me are very good ways of spending your time. Then there are movies that are kind of neutral. I talked my wife into seeing Up All Night, a Liam Neeson thriller. It was pretty damn good. It was ridiculous, a typical Liam Neeson thriller. Somehow somebody related to him got kidnapped, hurt or harmed and he has to kill at least a thousand people before it’s all done. It was very satisfying in that kind of way but I didn’t feel debased. Then there movies that you go to, maybe porn for some people, or really when I see Sex and the City, at the end of it I feel debased. I feel like I’m lower in the human scale of evolution when I’m done.
So my whole thing there is just be aware. The problem is that those experiences that leave you vibrating at a higher level take more energy to put into them. We don’t want to do that. We want always, especially when we’re tired and we want to be entertained, we want to do lower energy. But my whole thing is you’ve just got to get yourself to just start those types of activities. In other words—
James: It’s almost like a practice to kind of find or to recognize when your body is getting enriched.
James: A lot of people are going to listen to this and say it’s easy for you to say; you’ve been successful with hundreds of businesses but I want to remind that you started off saying you were at the hut in Chad saying, “This is the best place you were ever going to stay in.” You were thinking that then and then you talked about the cottage down the block and how it’s just the feeling you got in that place. I think people forget that really is so important. The money and the businesses, you obviously get a lot of pleasure out of it. You get a lot of pleasure out of writing about it and talking about it. And it’s good to make money. There’s nothing wrong with that. But it seems like you initially had this kind of feeling of what is going to enrich me as opposed to debase me and I think it’s an important—
Mark: I think that’s something I got from my parents. My parents were kind of academics, typical leftists, anti-materialist activists.
James: Those Irish leftists.
Mark: Yeah. So there’s a residue of that. As I said, I wanted to tell those people that are reading our newsletter and that read everything else, all the other advice and they say well, I’m not going to become a millionaire. I want to tell them that that’s okay. Who cares really? There is still a good opportunity for you to have a beautiful life, to have the life that’s rich in the most important ways and a life that’s admirable.
James: All right. Well, Mark, I don’t know which books to recommend but Living Rich, Ready, Fire, Aim, Persuasion. Are you going to make Persuasion public to everyone?
Mark: Yeah, one of these days. It’s hanging around. I think I actually have lost track.
James: The Pledge, Seven Years to Seven Figures
Mark: Wow, I’m very impressed. Choose Yourself, that’s the only one I can think of.
James: Choose Yourself.
Mark: Choose Yourself 2 or something.
James: The Choose Yourself Guide to Wealth, which I followed up.
Mark: All right.
James: She wrote the Become an Idea Machine, also the number one book on entrepreneurship in the world right now written by her on the floor.
Mark: Well, if you would send me that. Is it? Wow!
Mark: If you send me a copy of that, I’ll send you all my other books put together. How does that sound?
James: Right. That was a good negotiation for you. All right, well thanks, Mark Ford. Thank you again for coming on this podcast.
Mark: A pleasure.
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