Paul Getty’s How to be rich

Introduction

The importance of this book

Most modern readers must have never heard of this book, and certainly not of its author, J. Paul Getty. But the author was the most famous figure in the world’s shopping malls half a century ago.

His book is regarded as a must-read Bible for getting rich every year by many young people who are interested in entrepreneurship, management, business, investment, and career planning. The book is concise, not thick, and easy to read; the topics discussed are very broad and practical, which is why this book has a high rating.

Successful methods and experiences will not become obsolete with the passage of time.

Who is Paul Getty?

“How to be Rich” is the work of J. Paul Getty, the world’s richest man in the 1960s. Fortune magazine named him the richest American in 1957, and Guinness named him the world’s richest civilian in 1966, worth approximately $1.2 billion ($7.5 billion in 2020). His estate exceeds $6 billion ($21.7 billion in 2020)

Paul Getty was also a collector of art and antiques. His collection is now housed in the famous Paul Getty Museum in Los Angeles, operated by the Paul Getty Foundation established in 1953. In addition, he left the museum a property worth $661 million.

Business success

When Getty was 10 years old, his father went to Bartlesville, Oklahoma and bought the mineral rights to 1,100 acres of land. In the following years, George Getty built oil wells here and produced a large amount of crude oil.

After getting rich, Getty’s family moved to Los Angeles. When he was 14, Getty enrolled in Harvard-Westlake School and a year later in a technical high school. Getty was nicknamed “Dictionary Getty” by his classmates because of his love of reading. Getty is fluent in French, German and Italian, and also speaks some Spanish, Greek, Arabic and Russian. Because of his interest in classics, he also studied ancient Greek and Latin.

He enrolled at Oxford University on November 28, 1912, where he made many friends, including the future King Edward VIII of England. In June 1913 he received a degree in economics and politics from Oxford

In the fall of 1914, he received $10,000 from his father to invest in the Oklahoma oil fields. The first oil well he bought was the Nancy Taylor No. 1 Oil Well in Haskell. Oil came out of the well in August 1915, and Getty became rich.

Getty was a well-known playboy and had several wives. His father was very dissatisfied with this, so when he died in 1930, he only inherited 500,000 of his $10 million fortune. Paul Getty only owns one-third of George Getty Inc., with the rest owned by his mother.

In 1936, Getty’s mother persuaded him to establish an investment trust company worth $3.3 million, the Sarah C. Getty Trust, to ensure the long-term development of the family. Soon after, Getty used the foundation’s money to buy Tidewater Petroleum, a major oil company at the time.

During the Great Depression, he steadily developed the oil industry and acquired several oil companies. Because he can speak Arabic, he has developed a lot of resources in the Middle East. Including Getty Oil, he has as many as 200 properties under his name.

Family life

Paul Getty was married and divorced five times, and four of his wives gave him five sons.

On July 10, 1973, his 16-year-old grandson, John Paul Getty III, was kidnapped in Rome and a ransom of $17 million was demanded. But John was already of bad character, and Paul suspected that he was directing and acting to defraud money. John’s father, John Paul Getty Jr., asked Paul for money but was refused. In November of the same year, gangsters sent Paul a handful of hair and an ear, this time demanding $3.2 million, and threatened Getty to kill him if he didn’t pay the money within 10 days. But Paul only agreed to pay $2.2 million, and Getty III was released after the ransom was paid.

The movie “All the Money in the World” describes the story of Getty’s grandson, John Paul Getty III, who was kidnapped by the Mafia in the 1970s.

Highlights from the book

Two major points from Getty

Regarding accumulating wealth, the author reminds all those who want to become rich that they must bear in mind the following two major points:

• Wealth is not the ultimate goal in life. What can truly satisfy one’s soul is “one’s inner ideals and correct values.”
• If you want to get ahead, “there is no other shortcut except to keep your feet on the ground and work hard.” You must first understand this before you can start planning your life in the right direction.

How to become a millionaire

• Choose an industry you are familiar with to start with
• Develop more and better products, provide lower prices and better services
• Be frugal
• Honest management and good planning
• Learn to take responsibility in layers
• Keep an eye out for new trends
• Dare to borrow money and pay it back immediately
• Find new markets
• Maintain a good image and reputation
• Think about your contribution and responsibility to society

Characteristics of a millionaire

• Luck, talent, learning, and hard work; especially the last one is the most important.
• Many people with ten years of experience have simply repeated one year’s experience ten times.
• A person with the characteristics of a millionaire is not a penny-pincher, but a frugal person who can prosper with the company. Be able to be responsible for the company, increase revenue and reduce expenditure.

Start your own business

Do business

• One person cannot achieve anything, you must build a team.
• Success is not all about talent, luck is also important.
• Making money is not the main purpose, the main thing is whether you can contribute to the world and mankind through the process of making money. This is the true ideal and ambition of entrepreneurs.
• As long as we are not affected by the pessimistic and panic-stricken rhetoric that fills the era, there is indeed much to be done in the era, and the opportunities are far greater than before.

Qualities required to be a supervisor or leader

• Only by leading by example and teaching by example rather than words can you convince others.
• Responsible and able to tolerate mistakes and criticisms from subordinates.
• Do unto others, do not impose on others.
• Strive to be fair, but don’t be indulgent.
• Praise should be given in public and criticism should be given in private.

But generally most supervisors:

• He is submissive to his boss, has no shoulders, and has no opinion.
• Treat your subordinates like prisoners.

Some necessary good habits

• Punctuality is very important and is the basis of all business activities.
• Saving money is the main basis for business success.
• Before making an important decision, rethink it carefully to reduce the chance of making a mistake.
• You have to be prepared for everything.
• Only by learning to relax can you go a long way.

How to break in the business?

• Don’t completely accept the opinions of others, especially staff or consultants. Your career is your own, and you still have to figure things out yourself, because you are the one who makes the final decision. If you don’t understand the ins and outs of things, it’s impossible to make correct decisions. Just like my previous post: “Thinking cannot be outsourced“!
• Facts and opinions are different things. What you need to know are the facts. Opinions can only be used as a reference for decision-making.
• Most managers are too specialized in knowledge, but what the market needs are generalists, not specialists; they need people who can grasp the overall situation.

Management tips

• Lead people with your heart: The first chapter of management is to treat people sincerely and not abuse power, so that everyone can work together as one.
• Employees are not animals. People have thoughts and emotions and cannot give arbitrary orders. Just like you, employees need stability and care. Everyone also has their own dreams and desires, and they also hope that someone will care about their emotions and gain stability at work.
• It would be a great shame to trip over the same stone twice.
• Labor is the foundation of a career. Only by facing labor problems, respecting workers, and handling them sincerely and actively can a career be successful.

How to break through the dilemma?

• Stay calm in times of crisis and keep a cool head.
• Spot an error and take immediate action.
• The reorganization plan should list the key points, and you should be brave enough to make sacrifices when necessary, but sacrifices must come at a price.
• Frustration problems should be listed, carefully considered, and solutions listed; ideals and reality must be balanced.
• The resistance that may be encountered when implementing the plan must be considered first, so as not to end one wave and another wave will arise.
• After the reorganization plan is drawn up, action must be taken immediately.

The art of investing

Stock investment

My Findings

I have personally studied Paul Getty’s stock investment philosophy very carefully, and the key points of stock investment listed in his book; they are very similar to the investment principles of well-known investment masters, such as Buffett. This once again confirms the view that I often mention in my soap books and blogs – “Investing has no formulas, but there are ways to invest successfully“.

Fundamental view

• The profits from stocks are greater than most people imagine, but don’t be too fanciful and want to get rich overnight.
• The crash occurs because the stock price is higher than the actual value. The stock price that remains high for a long time always needs a moment of consolidation. Anyone who doesn’t buy at this time is a fool. Anyone with some brains will definitely agree with my approach.
• Without a free lunch, it is impossible to get rich quickly. If wealth could really fall from the sky, wouldn’t everyone become a rich man? Investing in stocks, like other business activities, requires research and judgment, and requires a lot of effort.
• Real investors will always wait for the stock price to be at a reasonable price before buying, and then wait patiently for the stock to appreciate in value.
• To buy stocks, you have to wait for the price to be low. The lower the better, in order to ensure your safety.
• Follow the general trend and don’t be afraid of fluctuations. Keep a long-term perspective and don’t worry about sporadic small fluctuations.
• Take a long-term view to catch the big fish, buy when the market is low, and invest for the long term. You will always get the best profits from dividends and stock price appreciation.
• You must have a clear understanding of the operating conditions of the companies you invest in.
• Investors should regard investing in stocks as an important career in their lifetime, and they should spend some time to understand the taste of it.
• Don’t buy unlisted stocks, because it is easy to buy but difficult to sell.
• You must invest selectively and only buy stocks of companies with development potential. The benefits you can obtain in the future will be at least two or three times, or even dozens or hundreds of times of the initial investment.

Things to consider when buying stocks

• What is the historical background of this company? Is the foundation solid and reputable? Do you have a sound management system?
• Are the products launched by this company forward-looking? Whether it can continue to meet the needs of the development of the times
• Are the company’s policies far-sighted? Can it continue to expand in line with the pace of economic development?
• Are its operations above board? Can it withstand the investigative attacks from public opinion and the press?
• What is the environment like where the company is located? Is it enough for the company to grow and become competitive in the market?
• Is the company in good management and operation, and can it always make profits?
• Can each investor reasonably share the dividends? If the dividend received is too small, whether can there be a convincing reason?
• What is the company’s debt status? Is the company able to bear these short-term and long-term debt pressures?
• Has the price of the company’s stock been stable over the past few years? Is there any record of unlimited plummets?
• What is the gap between the company’s actual stock value and what investors purchased in the stock market?

Keep in mind

• Stock market crash does not mean economic collapse
• The country’s progress will not be reversed, and the economic prospects will certainly be bright.
• When economic problems occur, it is when many companies close down and many people lose their jobs; it is not when investors’ dreams of getting rich come to naught; there is a big difference between the two.

Real estate investment

What you need to know about investing in real estate

• Everyone has experienced it: If I bought the real estate I was interested in a few years ago, the price would have increased many times. This proves that, like stock market investment, long-term real estate investment is a very profitable way to accumulate assets.
• Real estate investment requires huge funds, and not everyone and every time can accurately predict the development of the city and enter the real estate in the area in advance, so it is not as easy as ordinary people think on the surface.
• Location is very important. It is related to the value of the real estate, the environment where you live, the quality of the building itself, and the future potential. They must all be included in the basic considerations of real estate investment location.

Ten basic principles

• Before you start buying or selling, you must first familiarize yourself with the local real estate market values. To seize the opportunity to buy at low prices, you must also pay attention to the local population growth rate and the speed of industrial development, so as not to buy an area that is going downhill and suffer huge losses.
• Before purchasing a property, you must consider all factors in detail. Buying a house that is livable and built is the soundest investment. Unless you are familiar with the construction industry or have confidence in a particular construction company, never buy a pre-sale home. Don’t invest in hotels on a whim, unless you are familiar with this industry in advance.
• Only deal with legitimate and reputable intermediaries.
• If you want to buy a piece of land to build a house, you need to make sure you have enough funds to maintain the land.
• Before finalizing the decision, it must be carefully evaluated at least three times, and decisions cannot be made hastily.
• When signing a sales contract, it is best to pay attention to whether the person you are dealing with is honest.
• Think before you act. Once confirmed, pay the deposit. Never sign a contract with someone and pay a deposit just because of a whim.
• Before signing any document, you must also remind yourself whether you are familiar with the relevant legal provisions. You must first understand all the responsibilities and obligations before signing. I would like to remind investors to carefully review the words in the contract and clarify with the seller one by one whether there are any differences in their interpretations of the contract, so as to avoid litigation later due to misunderstandings between the two parties about the contract.
• Industry names must also be clearly understood. Ambiguous project names may be misunderstood over the years and cause unnecessary trouble. They must not be dismissed in one stroke and sow the seeds of disaster.
• Once invested, it must be treated as a long-term investment and should not be short-sighted and resell in a hurry. Ninety-nine percent of people will make profits due to the increase in property value. Therefore, be sure to remember that you are “investing” rather than “speculating”.

Art investment

Paul Getty’s basic views on art investment

• The greatest feature of a work of art is its uniqueness that cannot be reproduced. This is the source of its value. This is also the biggest reason why investment in art can maintain its value.
• Paul Getty believes that investment in art can be described as the best investment, and it will increase its rarity and value over time.
• For Paul Getty, it was not just a desire to have an exhibition, nor just a preference; it contained my emotions for the author. Even though the author has passed away, the author’s devotion and enthusiasm for the work, the emotion of life, and the desire have been preserved through his works.

Some advice for beginners

• The humble corner store or second-hand store may also have a rare book that is overlooked and sold at a very low price.
• New investors in art can start with the art field in which they are most interested.
• Investors who don’t have a lot of money to invest in art can start by investing in the works of the new generation and potential art creators and collect them for the long term.
• It is best for beginners to hire a professional connoisseur to reduce risks.

Art investment principles

• Collect according to personal preference and buy as long as the price is reasonable.
• Things are more refined than more, they must be measured by objective value.
• Buy what you love, love what you buy.

Money and value system

The meaning of money

• After you become rich, you must face a lot of unnecessary troubles, many of which are extremely unreasonable and must be endured.
• Most people always want to ask for money from the rich, and most of them do so through forced donation, because most people think that since you have a lot of money anyway, it is easy to make money. This kind of behavior and thoughts are very frustrating.
• The vast majority of rich people live very busy lives and spend more time working hard than others and have no time for fun. But most people don’t believe this. This is the main difference between rich people and ordinary people, and it is also the fundamental reason why they can become rich.
• Including Paul Getty himself, many rich people have failed in their family lives and marriages because they are too involved in work and career. After you become wealthy, you may also attract friends who are not true friends.
• If you have money, Paul Getty’s suggestion is to invest the money in your career to expand your career, and your wealth will automatically grow at an astonishing rate every year.

The importance of independent Thinkinh

• A successful leader must transcend the times and cannot follow the crowd blindly. He must have the ability to think independently and establish his own value system.
• Your unique characteristics will naturally be reflected in your behavior, thus affecting your career and investment capabilities.
• Don’t be afraid of being different. The reason why many rich people are successful is that they are not afraid of other people’s strange eyes. And when most people are frightened, they go the opposite way and invest heavily. If you do this for a long time, you will definitely succeed.
• Successful people need new ideas. Rebellion does not mean negative. Many of the greatest entrepreneurs in history were rebels who were not allowed to take control, but in the end they succeeded.
• It is not a virtue to obey in everything. Don’t take the rules for granted.

Correct values

• It doesn’t matter whether you are rich or not, what matters is whether you have your own set of values. Otherwise, there is no standard for your behavior, and no matter how much money you have, your inner emptiness will be revealed.
• The fundamental meaning of life lies in determining one’s own value and whether one can contribute to society.
• Paul Getty believed that you must first find your footing before setting goals in life. It would be sad to just follow the crowd and regard making money as your goal in life.
• Everyone is a member of society. In addition to personal interests, we must also include the goal of serving the public, so that we can find true satisfaction in life.

Related articles

• “Investing has no formulas, but there are ways to invest successfully“
• “Protect your reputation and love your job“
• “Time, discipline and patience are the three elements of successful investment“
• “Patience, an indispensable element of investment success“
• “Thinking cannot be outsourced“
• “The main investment principles of successful investors are similar“
• “Richer, Wiser, Happier“
• “Secrets of the Millionaire Mind“
• “Rich dad, poor dad“
• “The Psychology of Money“
• “An excellent book – The Almanack of Naval Ravikant“
• “Paul Getty’s How to be rich“

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