Friday, November 13, 2015

Brian Tracy: Getting Rich Your Own Way: Chapter Summary

To read a high level summary of the book, click HERE

In the introduction to the book 'Getting rich your own way', Mr.Tracy divides the general population into two groups. The first group, the wealth and successful people are the 'Action oriented people'. they believe in taking quick action and getting things done. The second group is the 'Talking and wishing people' who wait for things to happen to them.

To understand how to become rich, it is important to understand the factors that keep people from becoming rich. There are five reasons. First reason is that it do not occur to people that they could become rich. Their reference group consists of people similarly placed as they are. Second reason is got to do with a decision. Path to riches starts with a decision to become rich. Some people, due to various factors, do not take that decision. Third reason for people not becoming rich is procrastination. They wait for the right moment to take action which (right moment) never comes. Fourth reason is that people are not ready to pay the price by delaying gratification. The last reason why people do not become rich has got to do with their view of time. Being rich needs effort over a longer period of time. They longer the view of a person, the higher their chances of being rich and successful. The longer your time perspective, the goals will be long-term and the plans will be long-term in nature. You will become sensitive to how you spend your time.

There are five ways to become wealthy. They are:
  1. Become an entrepreneur
  2. Work your way up in an organization
  3. Become a self-employed professional
  4. Become good at sales
  5. All the rest
The good news is that you have some assets that you can leverage to become successful. These are:
  1. Specialized knowledge
  2. Skill: Better you are at your job, more you will be paid
  3. Money raised through savings, cash reserves or debt
  4. Network: The people you know. There are three things that you can do to expand your network. Make a list, network regularly and get involved in your community
  5. your creativity: One great ideas is all you need
  6. Good work habits
  7. A positive mental attitude
  8. The luck factor: Be prepared to receive luck. Try different things. Have clear goals and a plan of action. Clear goals lead to 'Law of attraction'
  9. Personal energy
  10. Choosing the right vocation
Do not accept any limits on your quest for success.

Chapter 2: Become a money magnet

The starting point of becoming wealthy is ‘Prosperity Consciousness’. You must become wealthy in your thinking before you achieve it physically. The first step in you path to become wealthy is the decision to change your thinking and impress in your mind the absolute faith that you can and will become a billionaire.

How you use your mind determines everything that you are or ever will be. You are just a mind with a body you use to carry it around.

There are three universal laws that one should use in one’s journey to become a billionaire. First is the law of expectation. This law says that whatever you expect with confidence – positive or negative – becomes your reality. If you confidently expect to become a billionaire and hold to that belief and act as if becoming a billionaire was inevitable, you will eventually become a billionaire.

Successful people expect to succeed in advance.

The second universal law is the law of attraction. This law says that your thoughts create a force field of energy that radiates out from you and attracts back into your life people and circumstances in harmony with those thoughts. Your main job is to keep your mind fixed on what you want and off what you don’t want.

Law of correspondence says that your outer world is like a mirror that reflects back to you what is going on you our inner world. As per this law, everything that happens outside of you corresponds to something happening inside you.

The laws are neutral. They can work for you or against you depending on the thoughts you choose to think.

If you passionately, madly want to become a billionaire, you will become a billionaire.

To become rich, one should think like rich people. You should try to find out how they think and try to imitate the same. One way to become rich is by following the law of accumulation which states that a great success is just the accumulation of many small successes. There are three areas where the law of accumulation is important for financial success. These are knowledge, money and experience. It is very important to continually accumulate all  the three to become wealthy and successful.  You must be serious about becoming successful. Also you must take charge of yourself. This means taking charge of your thoughts. Next step is to take charge of your actions. The first step in becoming rich is to have a reason why you want to be rich. Your goals must be specific.

The practical way to achieve your goals is the power of visualization. Create a clear mental picture of your goal as if it has already happened. The clarity of your mental picture will determine how rapidly your goal will come to light in real world.  Use the power of visualization to see yourself actually doing things to achieve your goal. This is called ‘Causative thinking’. There are four factors that can multiply the power of visualization. They are length of visualization, frequency of visualization, intensity of visualization and vividness of visualization. One way to increase the power of visualizations is the ‘Treasure Map’. Create a poster and put your goal and a picture of yourself. Surround the central image with a picture of clippings from magazines and news papers that support your goal. Practice positive affirmation like ‘I can do it’, ‘I make it happen’, ‘I make a billion rupees’, ‘I am the best’ etc

Other actions that you can take include reading about successful people, study your business and industry, attend to podcasts in your car, take courses and attend seminars. Another step is to be around successful people. This step, vis. Changing your reference group is mandatory to achieve success. Visualize your goals before you go to sleep. Finally start your day in a thoughtful, productive way that sets you up for the challenges ahead.

Chapter 4: Start with nothing.

There are four steps to success in any venture. These are desire, decision, determination,\ and discipline. One of the reasons why people do not achieve financials success is that they associate spending with pleasure and saving with pain. Another manor strategy to accumulate wealth is to decide ‘not to lose money’. ‘Low debt’ and ‘Slow and steady wins the race’ are two strategies that the rich people have followed over time. One of the reasons why businesses fail is that  the entrepreneurs do not know how to make a business successful. The tow key reasons for business failures are poor sales and low cost controls.

The five keys to business success are.
  1. Plan, organize and get results
  2. Market and sell – One should learn to sell
  3. Select the right people
  4. Become a good negotiator
  5. Learn to read financial statements
The five rules of entrepreneurship are:
  1. Find a need and fill it
  2. Find a problem and solve it
  3. Focus on the customer
  4. Bootstrap your way to success
  5. Walk before you run. Be prepared to pay the price
Seven steps to business success are:
  1. Set specific financial goals
  2. Offer a superior product
  3. Start small and grow slowly
  4. Test before you invest
  5. Grow from your profits
  6. Selects people carefully
  7. Use financial leverage
Chapter 5: Build your business

Seven principles of business success are:
  1. Start at the beginning: Does your service solve and existing problem for a customer?
  2. Offer good quality oat fair price
  3. Practice frugality at all times. Remember if it is not revenue, it is expense
  4. Maximize marketing: Sell, sell, sell
  5. Love your customer
  6. Develop a complete business plan before starting: The exercise of creating a plan will focus the entrepreneur to think through the critical issues that are involved
  7. Never give up: Determination, persistence and patience goes hand in hand with business success. It takes time to succeed. Normally it take stow years to break even and four years to reach profits.
As per the factor of three, a new product or service must be better than its competition in at least three ways. Success rate for new product is only 10% while the success rate for improved products is 80%

Question to be asked and answered to succeed in business.
  • Is your product suitable?
  • Have you analyzed the market?
                Is there a market for this product?
                Is the market large enough?
                Is the market concentrated enough?
  • Who is your customer?
  • Why would they buy from you/
  • What are the alternatives?
  • What does each customer cost?
Seven great marketing questions.
  1. What exactly is the product or service, in terms of what it does to change or improve life or work of customer?
  2. To whom it is going to be sold exactly?
  3. At what price is it going to be sold to the customer?
  4. How is it going to be sold to those customers at this price?
  5. Who is going to sell it in this way to this customer at this price?
  6. How is it going to be paid for and when?
  7. How is it going to be produced, delivered and serviced?
16 approaches to finding a product or service to sell
  1. Start with yourself: Identify customer needs that are not getting satisfied in your area of interest
  2. Look for a product or service that excites you
  3. What can you improve upon?
  4. Find ways to offer value
  5. Keep your eyes open: Review the ‘Business opportunities’ column in the news papers
  6. Read trade magazines in your field
  7. Attend trade shows and exhibitions to learn about new products or services
  8. Ask friends about ideas to sell or distribute
  9. Keep current with business magazines. Look for ads for new products or business opportunities
  10. Look for products worldwide. Seek out hidden opportunities
  11. Introduce something new and different
  12. Look under your won feet. It is estimated that people have four ideas each day when they drive from and to to work
  13. Keep eyes open when you travel
  14. Move quickly on opportunities
  15. Continually scan the opportunity radar
  16. Find something you like and believe in.
Some approaches to doing market research
  1. Do your homework. Try the product and see how you feel
  2. Find out what others are saying
  3. Ask other peoples opinions
  4. Ask your bank manager for advice
  5. Ask friends and family for input
  6. Get a customer’s opinion
  7. Study your competition
  8. Become a pessimistic optimist. Try to find the fatal flaw in your products
  9. Look for hidden possibilities
  10. Think long-term
  11. Be open to negative inputs
Chapter 6: Market and sell anything

Five questions to answer before making a sale are:
  1. Why should I listen to you?
  2. What is it and what does it do? Product Feature
  3. Who says so? Testimonials
  4. Who else used it?
  5. What do I gt? What is in it for me?
Various ways to sell. (Is your phone ringing?)
  1. Personal sales
  2. Retails sales
  3. Distribution
  4. Newspaper ads
  5. Direct mail
  6. Mail Order
  7. Internet
  8. Direct selling
  9. Seminar selling
  10. Party plan
  11. Co-op mailing
  12. Government sales
  13. Manufacturer representative
  14. Chain stores
  15. Discount stores
  16. Supermarkets
  17. Department stores
  18. Premium sales
  19. Franchising
  20. Displays and exhibits
  21. Wholesale
  22. Advertising specialty (Gifts)
  23. Trade shows
  24. Fund Raisers
Opportunity Gap Analysis:

10 questions that one cans ask to find newer or better ways to distribute your product or service
  1. What other ways you could sell the product/ Take an existing product and find a different way to sell it (Home delivery of vegetables, for example)
  2. What additional customers are there for this product? Find new customer base
  3. How to modify the existing product to make them more attractive to your customers? Change packaging, functionality, increase size, reduce complexity etc
  4. What non-customers could you develop for this product? Identify customers who are not using any products (Story of an island where people do not wear footwear)
  5. What new products do your existing customers want?
  6. What additional methods of distribution exist for the product?
  7. What additional products could you distribute through your existing marketing channels?
  8. What new products could you develop for your existing distribution channels?
  9. What new markets exist for your new products and your current distribution channels?
  10. What additional products could your produce with your existing facilities?
11 rules to get free publicity
  1. Ask for it
  2. Prepare a press release
  3. Make it newsworthy
  4. Pinpoint your audience. Identify media channels used by your key customer segment
  5. Select your media carefully
  6. Create good working tools. Get goo letterhead, write good copy etc
  7. Send a photograph of your product in use
  8. Use direct mail. Identify food expert of TOI for example.
  9. Go on radio or TV. Prepare a fact sheet for the announcer. Prepare a summary of the benefits and interesting features of your product or service
  10. Offer something free
  11. Leave information behind
Chapter 7: How to get the money you need

There are three reasons why people do not follow up on their dreams. One, fear of failure, two, ignorance and three, lack of money.

This chapter addresses the third aspect of the above, vis. Getting the money that you need.

Various ways to raise money.
  • Your own savings
  • Selling assets
  • Credit cards: Raise your credit value while working and borrow off your card. This can be very expensive
  • Personal loans: Create a borrowing history by taking loans and paying them back
  • Borrow against collateral, gold loans for example
  • Love money. Money from friends, relatives, parents etc
  • Business loan from Bank. Before taking a loan, banks look for the following five factors
                Credit rating
  • Lease or rent: Especially during early stages
  • Bootstrap: Start small, reinvest your profits
  • Customer financing. Get customers to pay:
                Use payment terms: Tighter for the customers and looser for the suppliers
  • Subscription: Get the customer to pay the entire year payment before receiving the first issue. Reader’s digest model.
  • Sell online. Get paid first and then deliver services
  • License the right: AMC Model
  • Retainership
  • Multi-level marketing: Use sample to get the sale
  • Factoring the receivables: Take loan based on Purchase order from a customer
  • Franchise: Expand the business by selling the rights to use the business system
  • Venture Capital: There are three requirement for raising VC
                Proven success record
                Submit a complete business plan
                Competent management team
  • Small business loan from Government
  • Initial Public Offerings
  • Supplier Financing: Ge supplier to finance you with liberal terms initially.
Chapter 8: Think and grow rich

There are various ways to stimulate your thinking. These include:
  1. Positive thinking
  2. Clear goals and objectives. You become what you think about most of the time. Regular focus on goals stimulates the conscious and the sub conscious minds. Thinking about your goals activate law of attraction and begins attracting to your life people and circumstances that can help you achieve your goals
  3. Stimulate your curiosity. Develop a questioning and curious attitude. Use ‘why’ effectively.
  4. Stimulate your mind by reading books, attending seminars, listening to audio courses etc
  5. Practice creating visualization. Continuously imagine and visualize  your goals as if they are already achieved
  6. Learn to laugh at yourself
  7. Get physically active
  8. Practice intense concentration. Focus on one thing intensely over long period of time. It could be data gathering, problem formulation and defining the problem in different ways etc. The more you concentrate, the more your intelligence is available to you.
  9. Expect the best. Expect to be successful
  10. Take charge of your life. Every time you face a problem, immediately seize control of the situation by saying ‘I am responsible’. When you accept responsibility you immediately take charge of the situation
  11. Develop a burning desire. You must have an intense desire to develop your potential as a person.
Three qualities of a Genius
  1. Single minded concentration for a long period of time till a goal is achieved
  2. Systematic approach to solving problems, investigating, questioning and making decisions. They think on paper. They write down their thoughts and ideas. Thinking on paper makes a creative thinker.
Here are some steps to solve problems systematically
  1. Define the problem clearly in writing
  2. Make a list of all the causes of this problem
  3. Identify all possible solutions
  4. Select what appears to be the best solution at the moment. Do not strive for perfections
  5. Assign responsibility for the solution to a single person
  6. How to measure the success of the solution
  7. Set deadlines for implementing of the solution. Please note that any solution is better than no solution.
  8. Keep an open mind. Practice adaptive thinking as against mechanical thinking Adaptive thinkers keep the question open as long as possible, avoiding the tendency to jump to conclusion
There are three ways to stimulate your creative thinking. These are intensely desired goals, pressing problems and focused questions

Ways to get rich your own way
  • Keep an idea log
  • Relax and reflect. ‘Go into silence’ and let your mind float
  • Magic wand technique. Practice the exercise of fantasizing at regular intervals. Use an imaginary magic wand to magically remover your obstacles. How will your life look like when your goals are achieved? What is the first step that you have take right now to achieve your goals?
  • Project forward and think back. What would a successful you look like? How will you be thinking and acting? How will others look at you? What Will you be doing? How will you use your success for betterment of society, for building inner peace and serenity? What should you do now to achieve that success/
  • Complete the sentence. Create a partial sentence and try to find multiple ways to complete it. You can use this approach for personal growth.
  • Generate personal answers
                I could achieve my goal if I.....
                I could start a business immediately if I....
  • Practice ‘mindstorming’. This is also called 20 idea method. Write down the problem statement on th top of a white sheet of paper. The tone of the question is positive and enquiring. Then write down at least 20 answers to the question. Initially it will be easy to answer. However last 10 answers can be very difficult. However if you practice long enough, you will find that you have many solutions to every one of your problems
  • Practice brainstorming or mastermind technique
  • Ask ‘What if’ questions. ‘What if it were like that..’, ‘why is this situation like this...’ etc
How to evaluate your idea?

Not all ideas are good or workable. Once you have an idea, you should evaluate its feasibility. Here are some ways to do that.
  • Determine if the idea is valuable
  • Remain objective. Do not fall in love with your idea. Ask various people about the idea. Be ready to throw away the ineffective ones.
  • Let them cool. Give ideas time to become clearer
  • Ask right questions including
                Will it work
                What it takes
                Is it simple (Most important)
                Will it significantly improve the situation
  • How badly do you want it? Is it compatible with your values and dreams?
As per the law of manifestation, physical things are just the manifestation of inner thoughts. Everything is first created in the mind. The point made in the chapter will help you create your success first in your mind before it manifests in the outer world.

Chapter 9: Learn from the best

Five qualities of great people:
  1. They display common sense: Ability to have experiences, reflect on the same and learn general rules from those experiences that can be applied across other situations
  2. They act intelligently. Intelligent action move you forward to your goals
  3. Expertise: Mastery of the domain
  4. Take charge of t heir lives. They take responsibility for whatever happens to them. They avoid blame game and let the past go
  5. They get the job done. They develop result orientation. Focus on getting the jobe done well and quickly. They set goals, objectives and priorities. They focus on what is important and stick to it until it is completed
Think in terms of hourly rate. This will help us use our time better than the rest. Identify you top three tasks list and focus on completing them

Qualities of leadership
  1. Vision: Have a clear vision of the ideal future. Practice imagining your ideal life 3 to 5 years hence. Imagine yourself being described as a successful person
  2. They have a deep sense of mission
  3. They practice optimism. Have unrealistic expectation of success. This will help you try more things. Once you try more things, you will succeed in more things.
  4. Know your business inside out
  5. Look for opportunities
How to find your opportunities
  1. Collect information. Attend seminars, listens to podcasts, read journals, magazines etc
  2. Visualize yourself as successful. Create a clear picture of how you will look, walk, dress, talk etc once you are successful. Combine visualization with action
  3. Keep your eyes open for opportunities. Look for problems in your working area. Start small with customer financing. Look for solution that can be widely applied. Look for solutions that can be sold by ordinary, competent sales people. Look for problems that really works and that can sell itself by word of mouth.
Study successful companies
  1. How does a company attract customers?
  2. How does thee company sell? What are the selling techniques? What are the successful selling methods? What kind of warranties and guarantees doe it give? What kind of follow up service it gives to it its customers?
  3. Who buys the product or service? What type of customers does sell to? Who are the customers for a specific product or service
  4. How does the company charge?
  5. How much does it charge? Does it require a down payment? What terms does it give?
  6. What does the company include in its sales?
  7. Where does the company sell?Cities? States? Location in cities etc
  8. How does it retain customers?
Twelve keys to following the leaders
  1. Find out everything you can about the top people
  2. Copy everything that people are doing to achieve success
  3. Admire your successful competitors. Never disparage your competition
  4. Look for formulas of success that you can transfer or adapt from one industry or business to another
  5. Look for areas in the field where big profits are being made
  6. Look at what small businesses are doing successfully and then consider the possibility of building a large organization doing the same thin on a large scale
  7. Look what established giants are doing and then provide customers with less expensive alternative
  8. Look for an area where you can use speed and flexibility to offer products faster and cheaper
  9. Find a way to improve best selling products
  10. Always follow the leaders Don't go in first with a new product or service
  11. Borrow good ideas from others
  12. Learn continuously. Never stop learning
  13. Finally try, try and try again. No one has been successful without trying.
Chapter 10: Lead the field.

Some of the rules for health, wealth and happiness
  • Do what you love to do. Analyze and decide on your natural talent and abilities and choose career accordingly. You should strive to do stuff that give you enormous amount of satisfaction and pleasure
  • Identify7 your core competencies. Identify the area of work where you can make the greatest contribution
  • Throw your heart into what you do
  • Commit to excellence. Dedicate yourself to life long learning. Get better at what you do
  • Become a life long student
  • Save at least 10% of your income
  • Do a great job where you are. Develop special talent and work in an area where your talent is valued.
  • Strategies to put your career on a fast track
  • Make yourself indispensable.
  • Work harder than anyone else. Develop a reputation for very hard work. Start earlier, work harder, stay later
  • Work all the time you work
  • Invest the extra time
  • Transform your career. Resolve to start one hour earlier. Work through lunch time. Sine everyone is out for lunch, this will give you one hour of uninterrupted work time. Resolve to work on hour longer than anyone else by staying later in the day.
  • Accept 100% responsibility. Be clear with your boss regarding the most important things that you do for the company. Take over tasks from your boss that can handle. Always ask for more
  • Step on your own accelerator. Work on priorities and do the job quickly . Have a sense of urgency.
  • Develop a niche strategy. Create a niche strategy to improve the cash flow of the company. Identify the activities of the company that can affect the cash flow. Six such activities are.
  1. Marketing and sales: Identify ho to sell better and how to improve the collections
  2. Finance: Learn to deal with banks, Venture Capitalists and other source of cash flow
  3. Production. In a company with stable sales forecast, a production engineering, ensuring continuous production  is the key resource to improve cash flow
  4. Distribution channels: For some companies distribution channels are the greatest sources of cash flow. If you can get into a position of impacting distribution channel, you can add value to the company’s cash flow.
  5. Labor relations
  6. Government relations
  • Develop specialized knowledge
  • Do things faster. Move fast on opportunities. Get reputation of speed
  • Build your network
  1. Develop a ‘Strategic Networking Plan’
  2. Successful managers, who got promoted often, spend 54% of their time networking
  3. Know more people. Get known to more people
  4. Join an organization that will help you build the network
  5. Talent X Relationships = Productivity
  • Learn public speaking
  • Be the best
  1. Identify KRAs
  2. Identify the weakest skill and continuously work on it
  3. You could be one skill away from maximizing your productivity, performance, output and wealth. Learn new skills
  • Develop good work habits
  • Develop a power base. Develop personal power, expert power and position power in that order.
  1. Use law of reciprocity to your advantage
  2. Make a list of people who can help you start by helping them
  • Guard your integrity
  1. Be trustworthyTrust yourself. 
  2. Be true to yourself. 
  3. Keep your wordLive your life as if your every act were to become a universal law
  4. What kind of world / country / company / family would it be if everyone in it were just like    me?
  • Focus on the future. It only matters where you are going
  • Work on your talents. Every leader was a follower once. They rose to the leadership position by working on their talents.
  • Start where you are
  • Develop a prosperity consciousness. Think of yourself as a work in process. Writ and rewrite your goals. Make and regularly review detailed plan to achieve your goals. Your outer reality is the expression of your inner thoughts and beliefs.
Get going and keep going. Never give up!!

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