On a money road that many only talk about

June 12, 2010 05:16 pm | Updated 05:16 pm IST - Chennai

Book Review: 88 The Narrow Road: A Brief Guide to the Getting of Money. Author: Felix Dennis

Book Review: 88 The Narrow Road: A Brief Guide to the Getting of Money. Author: Felix Dennis

Your motives are your own, but to proceed without a clear and honest understanding of them is to invite disaster at a crucial moment, cautions Felix Dennis in the opening chapter of ‘88 The Narrow Road: A brief guide to the getting of money’ (www.landmarkonthenet.com). “Motive makes a fine horse when tamed by understanding and bridled by wisdom. But matters can go ill later in the day when a wild mare flicks you from her back in the midst of a battle.”

The author concedes that the search for wealth has been accounted in many societies as an ignoble objective. Yet, he suggests that it is better to wrestle with motive early and consider its strength at leisure than to be surprised by it at some perilous moment in the future when all is in the balance.

Reasons vs excuses

Coming second in the list of 88 nuggets of insights is a set of ‘reasons’ for not attempting to become rich, beginning with ‘I do not wish to be rich.’ Watch out, the so-called reasons for not pursuing wealth are, in fact, excuses, says Dennis.

Pitiful alibis, half-truths, and self-serving evasions you have erected to spare yourself from the quiet terror of taking your own financial destiny in your hands and making your dreams concrete reality, he chides. “They are the children of fear and the parents of a thousand ‘if onlys’.”

Anyone in good health and of reasonable intelligence, provided they utterly commit themselves to the journey, can succeed on the narrow road, the author assures. The commitment is vital, he emphasises. “Tunnel vision helps… A thick skin helps. Stamina is crucial, as is the capacity to work so hard that your best friends mock you, your lovers despair and your rivals and acquaintances watch furtively from the sidelines, half in awe and half in contempt.”

Marathon, not a sprint

Self-confidence helps, but can be simulated or acquired along the way; tenacity is an absolute requirement, Dennis advises. What about luck? Helps, but only if you do not waste time seeking it, he instructs. “The belief that you have a great idea is not worth cuckoo-spit. Ideas are ten a penny while the ability to execute counts for a great deal more.”

Mistaking ‘desire’ for ‘compulsion’ is a common pitfall, as the book alerts entrepreneurs. What is the difference? Intensity and longevity, says Dennis. “Those who feel compelled are more likely to focus relentlessly and exclusively on the attainment of a particular goal. In addition, they are likely to shrug off repeated failure and return to the fray with undiluted energy.”

The road to riches, he analogises, is a marathon, not a sprint. “While it may fleetingly boost one’s ego to line up at the start of a race with bona fide marathon runners, the consequences of exhaustion and collapse can be catastrophic when the inevitable occurs.”

Frugality culture

In a chapter on frugality, the author scorns at start-ups that put up stunning reception areas. He rues that overspending on such accoutrements is rife in start-ups – it is as if the owners require the false reassurance of unearned ostentation. “A beautiful vase of flowers in reception every week creates a better impression than 100,000-pound worth of fancy Italian furniture.”

Lease your furniture and computers, and outsource, guides Dennis. Start-up capital is simply too precious to squander on physical purchases, he reasons. “Staff travel and entertainment should be checked with an eagle eye – including your own. Issuing staff credit cards or company cell phones before the company can afford them is just showing off… Leaving lights, printers, computers, copiers and the like on ‘stand-by’ overnight is plain stupid.”

If these recommendations sound harsh, the logic is simple, as the chapter outlines. Even if you manage to break even in the first year and make a profit, the margin is likely to be in the 10 per cent range, explains Dennis. “Thus you will have to generate revenues of ten times the money spent on what might have been avoided to equalise your cash position.” An eminently easy exercise he offers, therefore, is to multiply by ten each pound (or rupee) you had thought to spend on anything before you approve their purchase. Your appetite for them will be sensibly diminished, he guarantees.

Cashflow, overhead

Failure to monitor cashflow is the source of most start-up failures, laments Dennis. Hence, his diktat to entrepreneurs is straight: Regularly, obsessively monitor cash; cashflow is the heartbeat of a company, and it is too vital to be left to accountants!

Remember: “Once control of a business is lost by running out of cash, you will be relegated to the status of minority investor or salaried employee, or tossed on to the scrapheap. No one will care how bright the future is for the company you created.”

Also, guard against excessive overhead, the author counsels. “Overhead will eat you alive if not constantly viewed as a parasite to be exterminated,” reads a sombre warning. A ‘golden rule’ that Dennis lays down is: ‘Overhead walks on two legs.’ Never mind the bleating of those you employ, he tells bosses. “Hold out until mutiny is imminent before employing even a single additional member of staff. More start-ups are wrecked by overstaffing than from any other cause, bar failure to monitor cashflow…”

Blunt messages of value that can nudge you towards a road less travelled.

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