Much is said and written about how to be successful in this and that field of human existence and action. Habits, characteristics, principles and laws are studied and described that are common to successful people. But little if any is said about the habits, principles, and laws that are consistently present in failure stories. We believe that ground zero for succeeding in life, is to avoid and exclude as early as possible in your life, the failure mechanisms, that habits of losers, the failure attitudes, and as we shall attempt to present here, the laws of failure. Through my own painful personal experience of some failure as well as through analyzing some ‘fiasco’ stories around myself be they in the realm of business, or relationships, I have come to realize that in all of them, some big security principle was violated, that was the original root cause that led to failure. By deeply understanding which generic life principle was violated, we could perhaps come up with an increasingly precise and comprehensive set of the laws of failure. Seen from an opposite angle, the laws of failure are nothing but a checklist for minimal success. If you are ‘clean’ on each and every item on the list of laws of failure, you can be pretty confident that you have at least a solid foundation of success. In this article, which we hope will lead to others, we present our first law of failure, that of easy money.
The Law of Easy Money
In today’s materialistic world, where so much choice, freedom, prosperity and comfort level in life depends on money, the lure of big money is bigger than ever. Even bigger than that, is the lure of easy money. I have seen countless individuals, and heard countless stories, about people who have spent their lives chasing one ‘opportunity’ of easy money after another, only to end up, beyond the age of 60, at the very point from which they started in terms of annual income, that is very low, close-to-poverty. Add to this pattern, those who ended up in prison for violating the law. The sad thing is that, for most of these cases, sticking with their original income and a set of good money management principles, would have led them to a certain prosperous life. They were not patient enough, and wanted the ‘easy’ way.
Now, why is chasing easy money, a law of failure. There are of course many reasons, but the most fundamental of them is because it violates an even bigger fundamental law of economics, that of wealth creation. Deep inside each and every market crash in the 20th and 21st century, there was an outrageous violation of this principle. At first, the initial gains in market prices of a commodity usually do have sound financial and accounting justifications (assets are below their real value), but then greed creeps in, and either attracts less intelligent, or more greedy people into the arena, and deviation from reality starts. No matter how smart you think you are, I personally believe that the real economy, and as a corollary, real value creation, always wins in the end. That is true at all levels of economic activity, from the boy operating a tiny stand selling lemonades, to one century-old multinationals selling cars, or smartphones, or breakthrough drugs. Even in white collar jobs, if you keep your focus on how much value you bring to your employees, if you view you skill set as your personal value proposal to potential companies, and if you stick to that measure, you will eventually build a successful career atop a solid foundation. Bluffing won’t get you far on the job and certainly will get you nowhere at the life-long career level.
The second reason why easy money is a law of failure, is its relationship to scams of all sorts. It opens up to you the endless possibilities of falling in the trap of scam artists, and that is throughout your whole life. Eventually, somebody will get you. Here again, the rationale is easy to understand once seen from the crook’s angle. Chasing easy money being nothing more than a fundamental human weakness, it is only natural that it become the crooks’ most successful technique : offering unreasonably high returns to otherwise very smart (and very rich) investors was the basis of Robert Madoff’s scam. Think of your potential (or actual) success as a fortress, and of the easy money mentality as opening countless holes in the walls of your fortress to countless crooked schemes. You will never be smarter than all the crooks in the world that can potentially cross your path throughout your whole life. Always ask yourself where does the money I am gaining come from, trace it to its original economic source. If the path of that money is not clear, back away. A more subtle version of easy money, is the ‘too good to be true’ offerings. Some very good salaries hide a dangerous job (for your health for example), very good rental income hide illegal activity in the property, or someone who has no intention of paying beyond the first month. Look for the ‘easy’ part in easy money.
The third reason is that easy money, is often illegal money. Here again, you expose yourself to the possibility of ending up in prison, knowingly or unknowingly. We do not think you need any concrete examples of illegal money. Just bear in mind that easy money is a close cousin to dirty money, that you should as early as possible in your life (and that of your loved ones) shut that door forever and never open it, or even get close to it. That’s one sound precaution for a lifetime.
What To Do
Knowing and identifying easy money as a law of failure, how can you immunize yourself and your loved ones from the dangers to which it can expose you (and them) ? By promoting the value of work and of investing in yourself, the value of life-long learning, of constantly expanding your skill set, the value of wealth creation. By telling yourself that the best foundation of success is counting on yourself, doing whatever you do better than others, or the best way you can. By citing to yourself and to your children, failure examples around you, from your family, your colleagues, or your friends (believe me, there will be no shortage of them) where the ‘victims’ followed this law of failure and indeed failed deterministically, and by analyzing and explaining to yourself and others, where exactly lied the ‘easy’ part of the law of easy money.
Of course, you should not become paranoiac. There are logical ways where you succeed ‘easily’ which you should also learn. If you were the first to offer a hard-to-copy service, product, or even business model, in a certain state, region, or country, you could make a lot of money. If you are the only one capable of assembling a product based on a hardware supplier from japan, a rare software supplier from India, and selling it to the German market, once the sales are set in motion, the money might look easy (no potential competition), but realizing this feat will be very difficult to your competitors. The ‘difficult’ part explains your (not-so-easy) easy money. Always verify where differentiation is relative to others. Why aren’t others doing it if it is so easy.
There are also subtle versions of false easy money. Those that required long years of hard labor that bore its fruit late are an example. Even subtler are those that required long years of head-scratching, invisible intellectual research effort to come up with some unique concept, business model, or business idea. There was no ‘work’ in the classical sense, but the constant obsession of looking for the ‘solution’. Those who succeed, often while bragging about success, give to others the false impression that their success was easy : every idiot can do this, they would tell you. Well, that was probably true before you did it, now that everybody knows it, it is too late, beware this trap. The concept of differentiation is a powerful and reliable tool in your hands to analyze seemingly easy success. Behind every success, these is always a difficult-to-copy factor. Oftentimes, it is as simple as a nice personality trait that you will never manage to emulate. Healthy easy money has always become so after so hidden difficulty was beaten. That is true for example with large fortunes buit around a single non copiable invention. Consider the chocolate giant Ferrero Rocher : once the formula for their chocolate was invented, the rest was history. All there was left to do was protect the formula, and sell billions of them indefinitely, that’s an infinite stream of easy cash flow. The same holds true for Coca Cola and Häagen-Dazs. No matter what example of leagl and sound easy money you bring, there was some unique original difficulty behind it. Learn to look for that difficulty in every success story that gives the easy money impression (or, illusion) and not only you protect yourself from the easy money law of failure, but also increase your chances of hitting a similar solid success story.