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CHAPTER 1.4

MONEY MASTERY: IT’S TIME TO BREAK THROUGH

Gratitude is the sign of noble souls.

—AESOP

Money is one of the ways we can turn the dreams we have into the reality we live. Without enough money, or a true scarcity of it, life can feel miserable. But when you have money in your pocket, does everything automatically get better? I think we all know the answer.

Money can’t change who we are. All it does is magnify our true natures. If you’re mean and selfish, you have more to be mean and selfish with. If you’re grateful and loving, you have more to appreciate and give.

Take a moment and think back to the financial meltdown of 2008. Trillions of dollars of stock and home values evaporated into thin air. Millions of jobs were lost in a matter of months. What did you experience? How did it hit you? How did it affect your family? How about your friends? Some of us reacted with fear, some with anger, some with resignation, some with resolve. All these responses were not about money but about us. These events shined a light on what money really means to us. What power we give it. Whether we let money control us, or whether we take control of it.

YOUR MONEY OR YOUR LIFE

One of the most powerful examples I know from that time is a gentleman named Adolf Merckle. In 2007 he was the 94th richest man in the world, and the richest man in Germany, with a net worth of $12 billion. He owned the largest pharmaceutical company in Europe, and then he expanded his empire into manufacturing and construction. He was proud of what he’d accomplished. He was also something of a speculator.

In 2008 he decided to make a bet in the stock market. He was so certain that Volkswagen was going down, he decided to short the company. Just one problem: Porsche made a move to buy Volkswagen, and the stock price shot up, not down. Almost overnight, Merckle lost nearly three-quarters of a billion dollars on that single gamble.

To make matters worse, he desperately needed some cash to pay off a huge loan. But in 2008, banks weren’t loaning money to anyone: not you, not me, not billionaires—not even other banks.

So what did Merckle do? Search for new financing? Cut his expenses? Sell some companies at a loss? No. When he realized he’d lost a total of $3 billion and was no longer the richest man in Germany, that he had failed his family, he wrote a suicide note and walked in front of a speeding train.

That’s right. He killed himself.

In a tragic irony, his family discovered only a few days later that the loans he sought had come through, and his companies were saved.

Did Adolf Merckle die because of money? Or did he die because of what money meant to him? For Merckle, money was an identity. It was a source of significance. The loss of his status as the richest man in Germany was too much to bear, and he felt like a failure—even though there was still $9 billion left in his pocket!

You might be thinking, “What a waste.” But it may be a little too easy for us to judge this man. How often have we attached our identity—or our future prospects—to money at some level? Probably more than we’d all like to admit.

THE BILLIONAIRE WHO WANTS TO DIE BROKE

On the other hand, there are people like Chuck Feeney, an Irish-American from Elizabeth, New Jersey, and a self-made billionaire. Have you ever tried to get through an airport, anywhere in the world, and found yourself lured into a room full of shiny bottles of liquor and perfume and other tax-free luxury items? Duty Free Shopping (DFS). That’s Chuck Feeney’s idea. He started with nothing in 1960 and ended up with a sales empire worth $7.5 billion.

At one point, Forbes had listed him, like Merckle, as one of the richest men in the world. But Feeney was so humble, you would never have known it. Most of his life, he didn’t own a car or a home. He flew coach and wore a plastic watch. Like Merckle, his bank account was dwindling—right now he’s in his 80s, and Feeney has just over $1 million left to his name. But the big difference between him and Merckle is that instead of trying to hold on to every last penny, Chuck Feeney gave away all his money.

This is a guy who, for the last 30 years, has made it his mission to take this vehicle called money and use it to change lives everywhere. His philanthropy reaches all over the world, from helping to create peace in Northern Ireland, to fighting AIDS in South Africa, to educating kids in Chicago.

The most amazing thing about Feeney is that he did it all anonymously. Feeney wanted no credit. In fact, only recently has word gotten out that he’s the man behind all these incredible projects. And he’s still going! Chuck Feeney says his goal is to bounce the last check he writes.

Obviously money meant very different things for Adolf Merckle and Chuck Feeney. What does money really mean to you? Do you use money, or does money use you? Like I’ve said from the beginning: if you don’t master money, at some level, it’s going to master you.

THE ULTIMATE GOAL: GIVING BACK

For me, money was always out of reach as a child. It was always a source of stress because there was never enough of it. I remember having to knock on the neighbor’s door to ask for food for my brother and sister and me.

Then, on Thanksgiving Day when I was 11 years old, something happened that changed my life forever. As usual, there was no food in the house, and my parents were fighting. Then I heard someone knocking at the front door. I opened it a crack and saw a man standing on the steps with grocery bags filled with enough food for a big Thanksgiving dinner. I could hardly believe it.

My father always said that nobody gave a damn about anybody. But all of a sudden someone I didn’t know, who wasn’t asking for anything in return, was looking out for us. It made me think, “Does this mean that strangers care?” And I decided that if strangers care about me and my family, I care about them! “What am I going to do?” I promised myself that day, I was going to find a way, somehow, someday, to give back and pay it forward. So, when I was 17, I saved my money from working nights as a janitor and went out on Thanksgiving and fed two families. It was one of the most moving experiences of my life. It lifted my spirit to see faces turned from despair to joy. Truly, it was as much a gift to me as it was to them. I didn’t tell anybody what I was doing, but the next year, I fed four families. Then eight. I wasn’t doing it for Brownie points, but after eight, I thought, “Man, I could use some help.” So I enlisted some friends, and they got into it too. It grew and grew. Now my foundation feeds 2 million people every year in 36 countries, through our International Basket Brigades. Would I have known the joy of giving if it wasn’t for that terrible Thanksgiving when I was 11? Who knows? Some would call it luck or fate or plain old good fortune. I see the hand of God in it; I call it grace.

Here’s what I know: I learned the joy of giving, and it had nothing to do with money. Money is simply a vehicle for trying to meet our needs, and not just our financial needs. Much of our life is guided by the beliefs we develop over the course of time; the story we create about what life’s about, how we’re supposed to be, what we’re supposed to do or give. Ultimately, what’s going to make us happy or fulfilled. Everyone has a different “happy.” Some people find happiness pleasing others, while others find happiness in power and domination. Others define their happy as a billion dollars. Some think the way to happiness and a meaningful life is to get closer to God and give up everything material. Still others think the ultimate idea of happiness is freedom.

Whatever emotion you’re after, whatever vehicle you pursue—building a business, getting married, raising a family, traveling the world—whatever you think your nirvana is, I have found it’s only an attempt by your brain to meet one or more of six human needs.

These six basic needs make us tick. They drive all human behavior and are universal. They are the force behind the crazy things (other) people do and the great things we do. We all have the same six needs, but how we value those needs, and in what order, determines the direction of our life.

Why are the six human needs so important to understand? Well, if you’re going to build wealth, you’ve got to know what you’re really after—what you’re building it for. Are you looking for wealth to feel certain and secure? Are you chasing wealth to feel special and unique? Or are you looking to have a sense of contribution—you want to do things for others in a way you’ve never been able to do before? Or maybe all of the above?

If you value certainty as the most important need in your life, you’re going to move in a very different direction, act differently in relationships, in business and finance, than if love is your number one need. If we get underneath what you’re really after, it’s not money at all. What you’re really after is what you think money is going to give you. Ultimately, it’s a set of feelings. And beneath those feelings are needs.

NEED 1:

CERTAINTY/COMFORT

The first human need is the need for Certainty. It’s our need to feel in control and to know what’s coming next so we can feel secure. It’s the need for basic comfort, the need to avoid pain and stress, and also to create pleasure. Does this make sense? Our need for certainty is a survival mechanism. It affects how much risk we’re willing to take in life—in our jobs, in our investments, and in our relationships. The higher the need for certainty, the less risk you’ll be willing to take or emotionally bear. By the way, this is where your real “risk tolerance” comes from.

But what if you’re totally certain all the time? If you knew what was going to happen, when it was going to happen, how it was going to happen. You knew what people were going to say before they said it. How would you feel? At first you’d feel extraordinary, but eventually you’d be what? Bored out of your mind!

NEED 2:

UNCERTAINTY/VARIETY

So, God, in Her infinite wisdom, gave us a second human need, which is Uncertainty. We need variety. We need surprise.

Let me ask you a question: Do you like surprises?

If you answered “yes,” you’re kidding yourself! You like the surprises you want. The ones you don’t want you call problems! But you still need them to put some muscle in your life. You can’t grow muscle—or character—unless you have something to push back against.

NEED 3:

SIGNIFICANCE

The third is Significance, that basic human need that drove Adolf Merckle. We all need to feel important, special, unique, or needed. So how do some of us get significance? You can get it by earning billions of dollars or collecting academic degrees—distinguishing yourself with a master’s or a PhD. You can build a giant Twitter following. Or you can go on The Bachelor or become one of the next Real Housewives of Orange County. Some do it by putting tattoos and piercings all over themselves and in places we don’t want to know about. You can get significance by having more or bigger problems than anybody else. “You think your husband’s a dirtbag? Take mine for a day!” Of course, you can also get it by being more spiritual (or pretending to be). Unfortunately, one of the fastest ways to get significance—that costs no money and requires no education—is through violence. If someone puts a gun to your head, in that instant he becomes the most significant thing in your life, right?

Spending a lot of money can make you feel significant, and so can spending very little. We all know people who constantly brag about their bargains, or who feel special because they heat their homes with cow manure and sunlight. Some very wealthy people gain significance by hiding their wealth. Like the late Sam Walton, the founder of Wal-Mart and for a time the richest man in America, who drove around Bentonville, Arkansas, in his old pickup, demonstrating he didn’t need a Bentley—but, of course, he did have his own private fleet of jets standing by.

Significance is also a moneymaker—that’s where my dear friend Steve Wynn has made his fortune. The man who made Las Vegas what it is today knows people will pay for anything they believe is “the best”—anything that makes them feel special, unique, or important; anything that makes them stand out from the crowd. He provides the most exclusive, luxurious experiences imaginable in his casinos and hotels—they are truly magnificent and unmatched in the world. He’s got a nightclub called XS (what else?) that is the hottest spot in Las Vegas. Even on a weeknight, it has a line out the door. Once you’re in, you have the privilege of purchasing an ordinary bottle of champagne for $700, or if you want to step up and show everyone you’re a player, you can spend $10,000 for a special “Ono cocktail” of rare vintage cognac and fresh orange juice that comes with a white-gold necklace. Hey, it comes to your table with a sparkler, just so everybody knows you’re significant (and out of your mind).

NEED 4:

LOVE AND CONNECTION

The fourth basic need is Love and Connection. Love is the oxygen of life; it’s what we all want and need most. When we love completely, we feel alive, but when we lose love, the pain is so great that most people settle on connection, the crumbs of love. You can get that sense of connection or love through intimacy, or friendship, or prayer, or walking in nature. If nothing else works, you can get a dog.

These first four needs are what I call the needs of the personality. We all find ways to meet these: whether by working harder, coming up with a big problem, or creating stories to rationalize them. The last two are the needs of the spirit. These are more rare—not everyone meets these. When these needs are met, we truly feel fulfilled.

NEED 5:

GROWTH

Number five is Growth. If you’re not growing, you’re what? You’re dying. If a relationship is not growing, if a business is not growing, if you’re not growing, it doesn’t matter how much money you have in the bank, how many friends you have, how many people love you—you’re not going to experience real fulfillment. And the reason we grow, I believe, is so we have something of value to give.

NEED 6:

CONTRIBUTION

That’s because the sixth need is Contribution. Corny as it may sound, the secret to living is giving. Life’s not about me; it’s about we. Think about it: What’s the first thing you do when you get good or exciting news? You call somebody you love and share it. Sharing enhances everything you experience.

Life is really about creating meaning. And meaning does not come from what you get, it comes from what you give. Ultimately, what you get will never make you happy long term. But who you become and what you contribute will.

Now, since this is a book about your money, think about how money can fulfill the six human needs. Can money give us certainty? You bet. Variety? Check. Obviously it can make us feel important or significant. But what about connection and love? In the immortal words of the Beatles, money can’t buy you love. But it can buy you that dog! And it can, unfortunately, give you a false sense of connection because it attracts relationships, although not always the most fulfilling kind. How about growth? Money can fuel growth in business and in learning. And the more money you have, the more you can contribute financially.

But here’s what I truly believe: if you value Significance above all else, money will always leave you empty unless it comes from a contribution you’ve made. And if you’re looking for significance from money, it’s a high price to pay. You’re looking for big numbers, but it’s unlikely you’ll find big fulfillment.

The ultimate significance in life comes not from something external but from something internal. It comes from a sense of esteem for ourselves, which is not something we can ever get from someone else. People can tell you you’re beautiful, smart, intelligent, the best, or they can tell you that you are the most horrible human being on earth—but what matters is what you think about yourself. Whether or not you believe that deep inside you are continuing to grow and push yourself, to do and give more than was comfortable or you even thought possible.

There is nothing more significant than growing and giving. So while money is an extraordinary vehicle to meet many of our six needs, it’s not the only one. When you are pursuing money, don’t forget why you are pursuing it. You’re trying to meet some emotional and psychological desires. Underneath those emotions are the needs that must be fulfilled for your life to be extraordinary.

When the astronauts went to walk on the moon, imagine the journey they went on. From being a small child dreaming of someday flying to outer space, to the day when Buzz Aldrin and Neil Armstrong stood on the moon, looking back at that extraordinary view of planet Earth that we’ve all seen only in pictures. They were the first human beings to do it in the entire history of the species—how incredibly significant.

What happened next? Ticker-tape parades. Shaking the president’s hand. They were heroes. And then what? What do you do after you’ve walked on the moon, and you’re only 39 years old? If you’ve studied the history of the astronauts, or read their biographies, you’ll know that many of them became extremely depressed. Why? Because the only way they could find adventure was by traveling into space or all the way to the moon. They forgot how to find adventure in a simple smile.

I’m not going to preach to you anymore, but I wanted to take this short time to say that while it’s time to master your money, don’t wait to master yourself. The fastest way to feel connection, a sense of how significant your life is, a deep sense of certainty and variety, and put yourself in a state where you can give to others, is to find a way each day to appreciate more and expect less. The wealthiest person on earth is one who appreciates.

I interviewed Sir John Templeton for the first time when I was 33 years old. Remember, he was the multibillionaire who started with nothing and made all of his money when everyone else was afraid, during the worst times in history: WWII, Japan after the war, and in the late 1980s and early 1990s when massive inflation hit parts of South America. When others were fearful, he went out and invested. I asked him, “What’s the secret to wealth?” And he said, “Tony, you know it, and you know it well. You teach it to everyone. It’s gratitude.” When you’re grateful, there is no fear; when you’re grateful, there is no anger. Sir John was one of the happiest and most fulfilled human beings I have ever known. Even though he passed in 2008, all these years later his life continues to inspire others.

If you want to be rich, start rich. What can you be grateful for today? Who can you be grateful for today? Could you even be grateful for some of the problems and the pain that you’ve been through in your life? What if you took on the new belief that everything in life happens for a reason and a purpose, and it serves you? What if you believed in your heart of hearts that life doesn’t happen to you, it happens for you? That every step along the way is helping strengthen you so that you can become more, enjoy more, and give more. If you’ll start from that place, money won’t be the source of your pleasure or your pain. Making money will just be a fun journey of mastery, and wealth a great vehicle to achieve what matters most in life.

But as long as money is such a part of our lives, let’s get right back on the money track. As heartfelt as this chapter has been, not all the people you’ll meet along the financial path will be operating from the benevolent place of Growth and Contribution! You’re going to be entering a world that is filled with people and organizations that too often will be looking to take advantage of your lack of experience and understanding. So I want to prepare you for what’s ahead. Before we discuss where to put your money and what to look for, I have to show you what to look out for.

There’s a reason why most investors do not make money over time. I want to arm you with the knowledge that will both protect you and allow you to maximize the growth of your investments so you can achieve true Financial Freedom faster than you can imagine. The peace of mind you deserve will soon be yours.