Monday, February 24, 2014

tips from P.T. Barnum

P.T. Barnum knew how to make money. By the middle of the 19th century, the master showman had become America's second millionaire, and his estate was valued at over $10,000,000 prior to his death in 1891.

Fortunately for us, Barnum – who is still remembered today for his "greatest show on earth" -- shared his secrets for getting rich. In the short work "The Art of Money Getting" published in 1880, he laid out his rules for creating wealth. After reading them, I was struck by how applicable they remain today. Here are nine golden rules for making money, according to Barnum.

1. Spend less than you earn. Barnum writes that the key to wealth is quite simple: "it consists simply in spending less than we earn." Despite the simplicity of this maxim, he notes, "more cases of failure arise from mistakes on this point than almost any other." [see Andrew Tobias]

2. Take care of your health. Good health is the foundation of success in life and is also the basis of happiness, according to Barnum. Without good health, a person is very unlikely to accumulate a fortune – he'll have "no ambition; no incentive; no force." He recommends avoiding alcohol and tobacco, while also making other healthy choices when possible.

3. Persevere. To illustrate this rule, Barnum shares a line from Davy Crockett, "This thing remember: when I am dead: Be sure you are right, then go ahead."

4. Be cautious and bold. This one appears to be a paradox, but it is not, writes Barnum. He believes "you must exercise caution in laying out your plans, but be bold in carrying them out." A man who is all caution won't take on the risks necessary for success, while a man who is "all boldness, is merely reckless, and must eventually fail."

5. Use the best tools. Barnum believes that workers must always have the very best tools to do their work. As a businessman, he feels there is no tool he should be, "so particular about as living tools." When looking for employees, therefore, one "should be careful to get the best."

6. Be focused. Barnum urges the aspiring entrepreneur to focus on "one kind of business only, and stick to it faithfully until you succeed, or until your experience shows that you should abandon it."

7. Advertise your business. Barnum was a remarkable pioneer in the field of advertising. For one of his promotions, he was able to transform a five-year-old dwarf named Charles Sherwood Stratton into "General Tom Thumb, Man in Miniature." Tom Thumb eventually became a gigantic hit in Europe, and was received by Queen Victoria and numerous other crowned heads-of-state.


Barnum with General Tom Thumb

8. Be polite and kind to your customers. P.T. Barnum actually never said "there's a sucker born every minute." Instead, he had great respect for his customers. He writes, "the man who gives the greatest amount of goods of a corresponding quality for the least sum (still reserving for himself a profit) will generally succeed in the long run."

9. Preserve your integrity. Barnum concludes his work by saying to all men and women, "make money honestly." He sincerely believed that the desire for wealth is laudable as long as the "possessor of it accepts its responsibilities, and uses it as a friend to humanity."

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