John Paul Getty became the richest man in the world by practicing a few basic principles of risk-taking and reward throughout his life. In this newsletter, you learn a series of ideas that can help you to make better decisions and reduce the risks associated with success.

The Billionaire's Strategy for Success
Remember Murphy's Law: "Whatever can go wrong will go wrong." There are several secondary laws to Murphy's Law, such as "Whatever can go wrong will go wrong at the worst possible time" and "Of all the things that can go wrong, the most expensive thing will go wrong at the worst possible time."

Another sublaw is "Everything takes longer than your best calculation." In advising businesspeople, I suggest that they take their very best estimate of break-even for any business venture and then triple it to arrive at a more realistic number. Whenever businesspeople follow this advice, they are amazed to find that, in spite of their best initial calculations, it indeed takes about three times longer than they thought it would to start making money.

Always Add a Fudge Factor
Another sublaw is "Everything costs more than you can possibly anticipate in advance." In minimizing risk in any venture, always add a "fudge factor" to account for the degree of uncertainty. Whenever I do a business plan, I always add 20 percent to the total of all costs that I can identify, to come up with the probable cost. Anything less than this, whether in business or your personal life, is likely to be an exercise in self-delusion and open you up for some unhappy surprises.

Once you have identified the worst possible things that could go wrong, make a list of everything that you could do to offset these negative factors. Engage in what is called "crisis anticipation." Look down the road, into the future, and imagine every possible crisis that could arise as the result of changing external circumstances.

Be Intensely Realistic
Men and women who have achieved a high level of success are intensely realistic. They do not put their trust in luck. They carefully calculate every possible risk, and then think about what they would do should it occur. They always have a backup plan in case things do not go as they wish them to. They have a "Plan B" and options to that plan that take all kinds of variables into consideration.

Do the Things You Fear
One of the very best ways to develop your ability to take intelligent risks is to consciously and deliberately do the things you fear, one step at a time.

A very good way to overcome the fear of risk taking is to set clear, written, measurable goals for yourself, and then to review those goals regularly.

When you have clear goals and plans, and you continually work on them and evaluate your progress each day, you will see what you're doing right and how you could improve your performance. You'll feel more competent and capable and better about yourself. You'll become more thoughtful and reflective and willing to take on even greater challenges. You'll feel like the "master of your fate and the captain of your soul." And your likelihood of success will become greater and greater.

Action Exercises
Here are three steps you can take immediately to put these ideas into action.

First, take any worry situation in your life today and ask, "What is the worst possible thing that could happen?" Then go to work to make sure it doesn't occur.

Second, look into the future in your life and determine the worst things that could happen. Engage in "crisis anticipation" regularly and continually be taking steps to guard against them.

Third, work from clear, written goals and detailed plans. Review them regularly. Consider alternatives and always look for ways to increase the likelihood of your success.

Financial Success Series

If you're earning $25,000, imagine for a moment that it's possible for you to earn $250,000, a 1,000 percent increase.

Believe in Yourself
The first reaction of most people to that exercise is to smile briefly and then to begin thinking about why it isn't possible. One man said to me, "If you knew how many years it's taken for me to get to what I'm earning today you wouldn't be suggesting that I could earn 10 times as much."

There Are No Excuses
Mark Twain once wrote that there are a thousand excuses for every failure but never a good reason. The tragedy of the average American is that whereas his or her main preoccupation seems to be money, or the lack thereof, the average person has the inherent potential to earn far more than he or she is earning currently.

Can Someone Be 10x Better?
Is the manager earning $250,000 per year ten times as smart as the manager earning $25,000? Ten times as experienced? Does he or she work 10 times harder? Of course not. None of these are physically or mentally possible, but there are people in every business earning many times more than others with the same average age, experience and intelligence.

I.Q. Doesn't Really Matter
In fact, a few years ago in New York, a thousand men and women were selected at random and tested for I.Q. Between the one having the highest I.Q. in this sample and the one with the lowest, there was a difference of only two and a half times. But between the person earning the most, who by the way, was not the one with the highest I.Q. and the one earning the least, who was not the one with the lowest I.Q., there was a difference of 100 times in income.

Action Exercises
Here are two things you can do to start increasing your income.

First, identify the highest earning, most successful people in your field and find out what it is that they are doing differently from others who aren't doing as well. Copy them every day.

Second, set a goal to double your income over the next two or three years and then figure out what you'll have to do to achieve it. Get started!

Million Dollar Habits

Perhaps the most powerful single factor in your financial success is your beliefs about yourself and money. We call this the Law of Belief. It says simply this: Whatever you believe, with feeling, becomes your reality. Whatever you intensely believe becomes your reality. That we have a tendency to block out any information coming in to us that is inconsistent with our reality.

What Successful People Believe
What we've discovered is that successful people absolutely believe that they have the ability to succeed. And they will not entertain, think about, or talk about the possibilities that they'll fail. They do not even consider the possibility of failure.

Positive Thinking Versus Positive Knowing
You always act in a matter consistent with your beliefs. The most important belief system you can build is a prosperity consciousness where you absolutely believe that you are going achieve your financial goals. We call this positive knowing versus positive thinking. Positive thinking can sometimes be wishing or hoping. But positive knowing is when you absolutely know that no matter what, you will be successful.

The Foundation of Willpower
Another principle related to your beliefs is willpower. We know that willpower is essential to any success. Willpower is based on confidence. It's based on conviction. It's based on faith. It's based on your belief in your ability to triumph over all obstacles. And you can develop willpower by persistence, by working on your goals, by reading the biographies of successful people, by listening to audio programs, by reading books about people who've achieved success. The more information you take into your mind consistent with success, the more likely it is that you will develop the willpower to push you through the obstacles and difficulties you will experience.

Beat the Odds on Success
Remember that success is rare. Only one person in one hundred becomes wealthy in the course of a lifetime. Only five percent achieve financial independence. That means that the odds against you are 19-to-1. The only way that you're going to achieve your financial goals is if you get really serious. To succeed, you must get serious. You must get busy. You must get active. You must get going. Remember, everything counts.

Resolve to Achieve Greatly
Self-mastery, self-control, self-discipline are essential for anyone who wants to achieve greatly. And control over your thoughts is the hardest exercise in self-mastery that you will ever engage in. See if you can talk and think about only what you desire and not talk or think about anything that you don't want for 24 hours. Then you'll see what you're really made of. It's a hard thing to do but with practice, you can reach the point where you are thinking about your goals and desires most of the time. Then, your whole life will change for the better.

Action Exercises
Here are two things you can do to build a belief system consistent with the financial success you desire:

First, continually repeat to yourself the words, pictures and thoughts consistent with your dreams and goals. Whatever you repeat often enough, over and over, becomes a new belief.

Second, set a goal for yourself to think and talk only about the things that you want for the next 24 hours. This will be one of the hardest things you ever do. But if you can keep your mind on what you want and off of what you don't want for 24 hours, you can begin to change your entire future.

The Miracle of Self-Discipline

There are many things you can do to put your career onto the fast track. You can set clear, specific goals for each area of your life and then make plans to accomplish them. You can plan your work and work your plan.

Ask For Greater Responsibility
You can accept 100% responsibility for everything you are and everything you become. You can refuse to make excuses or to blame others. You can tell your boss that you want greater responsibilities and then when you get them, put your whole heart into doing an excellent job.

Utilize Your Inborn Talents
In the parable of the talents in the New Testament, Jesus says, "Oh good and faithful servant, you have been faithful over small things. I will make you master over large things."

If you too will carry out every assignment to the very best of your ability, you will be given larger and more important things to do and you'll be paid more as a result.

Dedicate Yourself to Continuous Improvement
The key to long term success is for you to dedicate yourself to continuous improvement. If you become one tenth of one percent more productive each day, that amounts to 1/1000th improvement per working day. Is that possible? Of course it is!

Improve a Little at a Time
If you become one tenth of one percent more productive each day, that amounts to one half of one percent more productive each week. One half of one percent more productive each week amounts to two percent more productive each month and 26% more productive each year.

The cumulative effect if becoming a tiny bit better at your field and more productive amounts to a tremendous increase in your value and your output over time.

How to Double Your Productivity
Twenty-six percent more productive each year, with compounding, amounts to doubling your overall productivity and performance every 2.7 years. If you become 26% more productive each year, with compounding, times 10 years, you will be 1004% more productive over the next decade. That is an increase of ten times over ten years.

The Reason For All Great Successes
This is called the Law of Accumulation, or the Principle of Incremental Improvement. It is the primary reason for all great success stories. By the yard, it's hard. But inch by inch, anything's a cinch!

Become A 1000% Person
Make a decision, right now, to be a 1000% person. Commit yourself to continuous personal and professional development. Read, listen to audio programs and take additional courses. This process will completely transform your life.

Action Exercises
Here are two things you can do to put these ideas into action immediately.

First, make a plan to become a little bit better every single day. Learn and apply one new idea each day to help you to become more productive and effective at your work. The incremental effect will amaze you.

Second, be patient. Don't expect overnight changes or instant results. Remember the story of the tortoise and the hare. Become a little bit better each day and your future will take care of itself.

This is one of the most important of all the laws of money. You should spend at least as much time studying a particular investment as you do earning the money to put into that particular investment.

Check Every Detail
Never let yourself be rushed into parting with money. You have worked too hard to earn it and taken too long to accumulate it. Investigate every aspect of the investment well before you make any commitment. Ask for full and complete disclosure of every detail. Demand honest, accurate and adequate information on any investment of any kind. If you have any doubt or misgivings at all, you will probably be better off keeping your money in the bank or in a money market investment account than you would be speculating or taking the risk of losing it.

Money is Easy to Lose
The first corollary of the Law of Investing is: "The only thing easy about money is losing it." It is hard to make money in a competitive market but losing it is one of the easiest things you can ever do. A Japanese proverb says, "Making money is like digging with a nail, while losing money is like pouring water on the sand."

The Best Rule of All
The second corollary of this law comes from the self-made billionaire, Marvin Davis, who was asked about his rules for making money in an interview in Forbes Magazine.

He said that he has one simple rule and it is, "Don't lose money." He said that if there is a possibility that you will lose your money, don't part with it in the first place. This principal is so important that you should write it down and put it where you can see it. Read it and reread it over and over.

Time Equals Money
Think of your money as if it were a piece of your life. You have to exchange a certain number of hours, weeks and even years of your time in order to generate a certain amount of money for savings or investment. That time is irreplaceable. It is a part of your precious life that is gone forever. If all you do is hold on to the money, rather than losing it, that alone can assure that you achieve financial security. Don't lose money.

Be Smart About Investing
The third corollary of the Law of Investing says: "If you think you can afford to lose a little, you're going to end up losing a lot."

There is something about the attitude of a person who feels that he has enough money that he can afford to risk losing a little. You remember the old saying, "A fool and his money are soon parted." There's another saying, "When a man with experience meets a man with money, the man with the money is going to end up with the experience and the man with the experience is going to end up with the money." Always ask yourself what would happen if you lost one hundred percent of your money in a prospective investment. Could you handle that? If you could not, don't make the investment in the first place.

Action Exercises
Here are two things you can do to apply this law immediately:

First, think back over the various financial mistakes you have made in your life. What did they have in common? What can you learn from them? Accurate diagnosis is half the cure.

Second, invest only in things that you fully understand and believe in. Take investment advice only from people who are financially successful from taking their own advice. Play it safe. It's better to hold onto your money rather than to take a chance of losing it, along with all the time it took you to earn it.

Money, Money, Money