As Donald Trump is one of the most controversial characters (I use that term very intentionally) in the world, I thought it would be the perfect time to do a book learning post on this book. It’s titled Midas Touch: Why Some Entrepreneurs Get Rich-And Why Most Don’t. Whatever you think about Trump, I guarantee you can learn something from him. And if you want to learn about business, then you can DEFINITELY learn something from he and Robert, and my summary of this book will help!
First, however, I have to address a contradiction that this book brings up, and that’s the use of the term “Midas Touch.” The car care company Midas uses the slogan “trust the midas touch” as well. For some reason, the lesson from the story about King Midas has been forgotten. The story was about a king who prayed that everything he touched would turn to gold. When this power was granted to him, he soon learned that his food became inedible, and he even turned his beloved daughter into a gold statue. Only upon repenting and learning his lesson about true value and riches in life did the gods (the river Pactolus) wash this power from his hands and restore what he had done.
Maybe this is bigger commentary on our society as a whole? We value material riches so much that we have forgotten what real wealth in life is? In my humble opinion, money is a necessity in life, because it represents all resources on Earth. We all need food, water, shelter, and what it really boils down to… freedom. However, riches only go so far to provide happiness, which isn’t at odds with money necessarily, but requires focus, effort, and values by itself. I challenge all you small business owners and entrepreneurs to work hard to build your golden business, but to also keep sight of what brings you true happiness in life. This is why I focus so much on building a business around what you enjoy.
Getting into the book, it is organized into five sections, each one representing a finger of the hand with the midas touch. Each finger then represents a core value/strength that the entrepreneur requires to turn things into gold. Each core value is then addressed by Mr. Kiyosaki and Mr. Trump in turn. Here, I will give a summary of these values and my takeaways from the book:
THE THUMB: STRENGTH OF CHARACTER
I’d like to highlight two takeaways from this chapter:
- If you truly want to be an entrepreneur, you will experience ups and downs throughout your career. The world of entrepreneurship is the exact opposite of the world of employees in at least one specific regard: Employees succeed by knowing all the answers and competing with other employees, while entrepreneurs succeed by asking questions, testing, failing, and collaborating with other entrepreneurs, employees, investors, and others.
- There are different types of people, strengths, and intelligences. The most important one for entrepreneurs to develop is intrapersonal (or emotional) intelligence. This is the intelligence that allows you to control your own thoughts and feelings. “When you have strong intrapersonal skills, you can control the self-talk that holds you back and undermines your success.”
THE INDEX FINGER: F.O.C.U.S.
- Specialization is not good if you want to be an entrepreneur. This is a lesson that I must continue to work on. Three specific groups that the Rich Dad Company continually calls out as specialists are 1) doctors, 2) accountants, and 3) attorneys. Well, my wife and I are the first two. I started my business in the “S quadrant” as a self-employed specialist, but as I’ve started hiring people and building systems, I am moving to the “B quadrant” as a business owner. If you stay specialized, and the business lives and dies by the work you do, then you will never become a “successful entrepreneur.” You will only make money as long as you are working, just like an employee.
- I’m glad my dad taught me this lesson when I was quite young: He told me to take a job to learn, instead of just basing my decision on money. This book says work to learn, not to earn. I think the best way to apply this is to go to work for someone who is successful in the type of business you want to run. This will teach you very quickly what is working, and you’ll still get to see some stuff that doesn’t work. Then, you will be far more prepared to start that kind of business yourself.
THE MIDDLE FINGER: BRAND
There is some real “gold” in this chapter, and I will just quote the final points to remember:
- “Unless you build your business into a brand, you’ll never have the Midas Touch.
- Your brand must be genuine, not fake. People can spot a fake.
- A brand is not a logo. A brand is the promise you put out there and the experience you deliver.
- People buy with their hearts and justify their purchases with their minds. So have the courage to find your heart and put it into your brand.
- Figure out what really moves you. You’ve got to have the fire in order to have the Midas Touch.
- If you are too cheap to invest in your brand or yourself, then the Midas Touch will elude you. By cheap, we’re talking about money, time, commitment, and people.
- Do whatever it takes to improve your public-speaking skills. You’ll absolutely need them.”
These seven, succinct, points are more valuable than any commentary I have.
THE RING FINGER: RELATIONSHIPS
I have had good business relationships, and I’ve had bad ones. The biggest takeaway I have from this chapter is a formula that I devised:
- Develop relationships slowly, and end them quickly. Hire slow, fire fast.
- When a relationship gets “deeper” (shared ownership), get a good attorney to write up very clear agreements. Understand both ownership and control, and ensure there is an exit clause.
- As long as you have a vested interest in the business’ success, stay active to some degree. Trust but verify.
THE LITTLE FINGER: THE LITTLE THINGS THAT COUNT
This section was a little more unfocused in my opinion. Maybe the authors were trying to think of a fifth area. Maybe they were trying to figure out how to associate something to another finger. In any event, there were multiple takeaways from this chapter, but I will focus on just one, which comes back to the difference between the S and B quadrants, which I feel was one of the main focuses of this entire book.
The subtitle of the book, after all, is Why Some Entrepreneurs Get Rich-And Why Most Don’t. See the image below. Most entrepreneurs stay in the S quadrant, because they started a business to do something they’re good at. They may make more money than they would as an E at a job, but they will also pay more taxes, and they won’t be able to leverage OPT (other people’s time) or OPM (other people’s money). On the other side of the quadrant lie the rich. Big business owners (and Investors) leverage OPT and OPM, and that’s how you get rich.
So what’s the takeaway? If you’re an E, find a way to become an S. Start your own business, learn to sell, get customers, and develop all the stuff that Midas Touch talks about. THEN, you want to move to B and I. The simplest way to do this is to think of all the things you do in your S business as systems. How can you turn your functions into systems that you can hand over to someone else? Only once you separate yourself from your business can you have the Midas Touch.
Some people will never do this, because they either can’t, or they don’t want to. If you’re too busy working for your business, you may not have time to create systems and hire people to take on work. If you’re a perfectionist, you may think “no one can do it as well as I can.” If either of those are the case, and you’re happy with how your business is going, then you should stay in the S quadrant. But my biggest takeaway from this book is that, if you want to grow your business, you must separate yourself from it.
I recommend any serious entrepreneur or wantrepreneur read this book. But I hope this book learning episode gives some good insights and helps you in some way! Interact to drive these points home and get discussion going:
- Which was your favorite finger of the Midas Touch?
- What quadrant are you in? How long have you been there?
- What quadrant do you WANT to be in? What do you need to do to get there?
Thanks for reading, and I will see you next time!