Prompted by legendary businessman Andrew Carnegie, who turned a few nickels and dimes into a fortune, journalist Napoleon Hill researched more than 500 self-made millionaires over 20 years before releasing his 1937 best-seller “Think and Grow Rich.”
“It was Mr. Carnegie’s idea that the magic formula, which gave him a stupendous fortune, ought to be placed within reach of people who do not have time to investigate how men make money,” Hill wrote in the preface.
The 13-step “magic formula” — which involves no mention of “money” or “wealth,” but focuses instead on breaking down the psychological barriers that hold us back from attaining our own fortunes — is just as relevant today, 78 years later.
Here are Hill’s 13 steps, in his words and ours:
1. Desire: You have to want it.
All of the super wealthy started with a certain amount of dreaming, hoping, planning, and desiring before they became rich. They imagined riches before they saw them in their bank accounts, Hill explains:
Wishing will not bring riches. But desiring riches with a state of mind that becomes an obsession, then planning definite ways and means to acquire riches, and backing those plans with persistence which does not recognise failure, will bring riches.
This is not so different from the modern-day concept of visualising a savings goal with a specific price tag.
4. Specialised knowledge: Gain experiences and continue learning.
Knowledge is potential power. An education only becomes powerful and leads to great wealth when it is organised and applied to life. It also must be continually sought after. You're never done learning, Hill emphasises:
Successful men, in all callings, never stop acquiring specialised knowledge related to their major purpose, business, or profession. Those who are not successful usually make the mistake of believing that the knowledge-acquiring period ends when one finishes school.
Many modern-day successful and wealthy people are voracious readers. 'Walk into a wealthy person's home and one of the first things you'll see is an extensive library of books they have used to educate themselves on how to become more successful,' Siebold writes.
Rich people would rather be educated than entertained. Take Warren Buffett, for example, who estimates that 80% of his working day is dedicated to reading.
5. Imagination: Come up with ideas and visualise your success.
If you can imagine it, you can create it, says Hill:
Ideas are the beginning points of all fortunes. Ideas are products of the imagination ...
Man's only limitation, within reason, lies in his development and use of his imagination.
Don't be afraid to come up with, and develop, ideas. 'Whoever you are, wherever you may live, whatever occupation you may be engaged in, just remember in the future, every time you see the words 'Coca-Cola,' that its vast empire of wealth and influence grew out of a single idea,' Hill writes.
Consider Sara Blakely, whose small, disruptive idea -- making an incision in a pair of pantyhose -- led to her booming, billion-dollar business, Spanx, and rocketed her into the limelight.
6. Organised planning: Take action.
Once you've visualized your success, you need to take action and go after exactly what you want. You must act with persistence and enthusiasm. Hill explains:
Opportunity has spread its wares before you. Step up to the front, select what you want, create your plan, put the plan into action, and follow through with persistence ...
Most of us are good 'starters' but poor 'finishers' of everything we begin. Moreover, people are prone to give up at the first signs of defeat. There is no substitute for persistence.
For instance, if you're looking to build wealth, start with forming a financial plan, and determine exactly where you want your money to go.
7. Decision: Defeat procrastination with decisiveness.
A key trait Hill recognised in all of the individuals he studied who acquired great wealth was decisiveness. Those who settle on decisions quickly know what they want, and they tend to get what they want. He writes:
People who fail to accumulate money, without exception, have the habit of reaching decisions, if at all, very slowly, and of changing these decisions quickly and often.
Decisiveness is not just a trait of the wealthy, but one of the most important qualities a leader needs to possess. At the end of the day, making a bad decision is better than making no decision at all.
9. Power of the Master Mind: Surround yourself with the best.
The wealthiest people create a 'Master Mind,' meaning they surround themselves with talented friends and colleagues who share their vision. The alignment of several smart and creative minds is exponentially more powerful than just one, Hill explains:
No individual may have great power without availing himself of the 'Master Mind' ...
A group of brains coordinated (or connected) in a spirit of harmony will provide more thought-energy than a single brain, just as a group of electric batteries will provide more energy than a single battery.
This may explain why rich people tend to make friends with other rich people. 'Exposure to people who are more successful than you are has the potential to expand your thinking and catapult your income,' writes self-made millionaire Steve Siebold. 'We become like the people we associate with, and that's why winners are attracted to winners.'
10. The mystery of sex transmutation: Choose a compatible partner.
Sexual energy is an incredibly powerful human energy -- it creates physical life and develops emotional life, and when it is harnessed and redirected, it can enhance our creativity, passion, enthusiasm, and persistence, all which are crucial in accumulating wealth, Hill says:
Sex desire is the most powerful of human desires. When driven by this desire, men develop keenness of imagination, courage, willpower, persistence, and creative ability unknown to them at other times.
Love, romance, and sex are all emotions capable of driving men to heights of super achievement. When combined, these three emotions may lift one to an altitude of genius.
While this step may feel like a bit of a stretch, having a supportive partner is important to career success. Research also shows that having a conscientious spouse can boost your salary by $US4,000 a year.
11. The subconscious mind: Master positivity and dismiss negative emotions.
If you truly want to be rich, you have to plant that desire, and then your plan, into your subconscious mind. Hill writes:
The subconscious mind will not remain idle! If you fail to plant desires in your subconscious mind, it will feed upon the thoughts which reach it as the result of your neglect.
Positive and negative emotions cannot occupy the mind at the same time. One or the other must dominate. It is your responsibility to make sure that positive emotions constitute the dominating influence of your mind.
If you want to be successful and grow rich, it is critical that the positive emotions dominate any negative ones that arise, Hill says. He was on to something: Today, research shows that positive, happier people are more likely to perform better at their jobs and are less likely to be unemployed.
12. The brain: Associate with other smart people and learn from them.
Our brain is a 'transmitter and receiver of thought vibrations' -- it absorbs thoughts from other individuals surrounding us, making it even more important to associate with intelligent, creative, and positive individuals. Hill writes:
Every human brain is capable of picking up vibrations of thought which are being released by other brains ...
The Creative Imagination is the 'receiving set' of the brain, which receives thoughts released by the brains of others.
This principle is simply application of the Master Mind principle. It takes it one step further -- rather than just surrounding yourself with people who are smarter and better, use the members of your group to find solutions to problems or brainstorm ideas. Hill calls this 'blending of several minds into one,' and suggests sitting down with a small group of people and diving deep into the problem at hand.
13. The sixth sense: Trust your gut.
The final principle -- the 'sixth sense' -- occurs only after you've mastered the other 12 principles. You'll experience a sort of mind-shift, Hill says: 'Through the aid of the sixth sense, you will be warned of impending dangers in time to avoid them, and notified of opportunities in time to embrace them.'
While this principle isn't the most straightforward -- Hill admits it is generally not attained until age 40 -- his basic claim is that your intuition will change. You'll have achieved a level of wisdom that will allow you to start making smart financial and life decisions naturally.
Although it takes a while to master the final step, you can still get a lot out of the other 12 principles, Hill says:
No matter who you are, or what may have been your purpose in reading this book, you can profit by it without understanding the principle described in this chapter. This is especially true if your major purpose is that of accumulation of money or other material things.
The chapter on the sixth sense was included, because the book is designed for the purpose of presenting a complete philosophy by which individuals may unerringly guide themselves in attaining whatever they ask of life.
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