NOTE: Tai Lopez has taken time to point out that "schools don't ask us to read important books" and "schools have turned us off from reading books."
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I found 5 key strategies that Sam Walton used that made him immensely wealthy and that are pretty easy to apply even today into our lives:
1. Use Curiosity And All The Knowledge Available In The Modern World
2. Be Committed
3. Move Through Failure
4. Hire Outside Consultants
5. Patiently Build
Let’s go through them all.
#1: Use Curiosity And All The Knowledge Available In The Modern World
The amazing thing is that this book cost me $7.19. I have lots of friends and mentoring clients that tell me they want to start their own business, or grow their business to eight or nine figures.
If I went to any of them and said, “Would you pay me $10,000 if I could get you Sam Walton to be your mentor?” Every one of them would say yes. But if I call them right now and say, “Have you bought his book on Amazon for $7.19 and read it page by page?”, basically all of them would say no.
And this is the crux of the matter, why most people are never successful. All the knowledge in the world at our fingertips and hardly anyone uses it. We have Google, Wikipedia, and Amazon but we are still going through life in the stone age in terms of the knowledge in our brain.
Remember in many ways simply reading this book is better than being mentored personally by Sam Walton. Even if you could have talked him into letting you learn from him in person, he would have been too busy to actually spend anytime helping you.
But a book on the other hand is Sam’s focused thoughts on his life. He wrote it on his death bed to leave as his legacy. You know he must have put a lot of care into that last act. So taking knowledge like this and converting it into skill is the basis of all immense wealth.
And make no mistake, no matter what nonsense you have heard about “The Secret” or the power of positive thinking, immense wealth comes mainly from MASSIVE knowledge and skills.
I have 12 business partners and if I listed them from most successful to least successful it would follow an exact pattern. The most wealthy are the most knowledgeable and skilled and the least wealthy are the least knowledgeable and skilled. Don’t get me wrong, there are times when the power of positive thinking is useful. But it’s nothing compared to the power of knowledge and skills.
Imagine you have a tool belt on. The more tools you put in that belt the better chance you have at making it in life and business. Sam Walton attributed much of his success to the fact that he was an insatiable learner. In fact he spent most of his time getting in his little airplane and flying himself around the USA and investigating what his competitors were doing.
It’s interesting that Sam Walton says that he had basically read every single book that existed on retailing and running a store. He was a book of the day kind of guy. He was curious and learned from everyone he could.
Sam talks about how he started, “...I learned a lesson which has stuck with me all through the years: you can learn from everybody. I didn’t just learn from reading every retail publication I could get my hands on, I probably learned the most from studying what John Dunham [his competitor] was doing across the street.”
His wife Helen says, “It turned out there was a lot to learn about running a store. And, of course, what really drove Sam was that competition across the street—John Dunham over at the Sterling Store. Sam was always over there checking on John. Always. Looking at his prices, looking at his displays, looking."
There is a funny story that even after he was one of the richest men in the America he got caught walking around his competitor, The Price Club, with a little pocket recorder taking notes to use for his Wal-Mart stores.
Sam says: “Once I was in the big Price Club on Marino Avenue in San Diego, and I had my little tape recorder with me—like I always do—and I was making notes to myself about prices and merchandising ideas.”
But a big security guard walked up and confiscated his little recorder. Sam had to write his friend who owned The Price Club and promise he wouldn’t spy anymore to get it mailed back to him.
No matter how successful he got he always stayed humble enough to be a lifelong learner.
Sam’s wife said she remembers whenever they had a little BBQ party at their home she would find Sam asking every guest, “Hi do you know anything about discount retailing.” It drove her nuts but guess what, Sam’s hunger for knowledge made their family the richest in the USA.
The researcher, Jim Collins tells the funniest story about Sam:
“A Brazilian businessman once told me how he'd sent letters to the heads of ten U.S. retailers in the 1980s, asking to visit to see how they ran a retail operation.
Most didn't bother to reply, and those who did sent a polite 'No, thank you.' All except Sam Walton.
When the Brazilian and his colleagues stepped off the plane in Bentonville, Ark., a white-haired man asked if he could help. 'We're looking for Sam Walton,' they said, to which the man replied, 'That's me.' Walton led them to his truck and introduced his dog, Roy.
As they rumbled around in the front cab of Walton's pickup, the Brazilian billionaires were pummeled with questions. Eventually it dawned on them: Walton had invited them to Bentonville so that he could learn about South America.
Later Walton visited his friends in Sao Paulo. Late one afternoon there was a phone call from the police. Walton had been crawling around in stores on his hands and knees measuring aisle widths and had been arrested. The story encapsulates some of Walton's greatest strengths, notably his hunger for learning.”
I have a friend who is one of the best sales copywriters alive. He makes tens of millions of dollars a year. But he isn’t complacent. He told me that every time he sees any competitor advertising something online he transcribes it down by hand and dissects and outlines every word they say, even if it takes hours of work.
He is looking for any little edge they might have over him. Even though he is at the top of his industry he has the humility to keep learning. Amazing, and a great part of why he has immense wealth at such a young age.
I tell the people I mentor that they should see themselves as a cross between Robin Hood and a gold miner. That’s what Sam was. He was humble enough to act ‘poor’ in knowledge and realize that other people might have some rich gold nugget that he could take from them.
Sam says when he was starting out, “Actually, during this whole early period, Wal-Mart was too small and insignificant for any of the big boys to notice… That helped me get access to a lot of information about how they were doing things.
I probably visited more headquarters offices of more discounters than anybody else—ever.
I would just show up and say, ‘Hi, I’m Sam Walton from Bentonville, Arkansas. We’ve got a few stores out there, and I’d like to visit with Mr. So-and-So”—whoever the head of the company was—about his business.’
And as often as not, they’d let me in, maybe out of curiosity, and I’d ask lots of questions about pricing and distribution, whatever. I learned a lot that way."
People ask me how I found so many amazing mentors. The formula is simple, just ask a lot. As the teacher said, “Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you.”
Kurt Barnard remembers meeting Walton when Sam was first starting out, “I said I would give him ten minutes. So in comes this short, wiry man with a deep tan and a tennis racket under his arm. He introduced himself as Sam Walton from Arkansas. I didn’t know what to think.
When he meets you, he looks at you—head cocked to one side, forehead slightly creased—and he proceeds to extract every piece of information in your possession.
He always makes little notes. And he pushes on and on. After two and a half hours, he left, and I was totally drained. I wasn’t sure what I had just met, but I was sure we would hear more from him.”
I have told thousands of people to adopt this mindset and go out and study every one of their competitors and read every book and knock on every door in their quest to build knowledge. It’s puzzling why so few people actually do it.
But you should do it.
Make sure you carry a little notepad with you everywhere to take notes or use evernote to record written and audio notes on your phone.
So read EVERY book that exists on whatever is your passion and business.
Attend EVERY seminar and conference.
Visit EVERY competitor and map out exactly what they do.
Build such immense knowledge and skill in your field that not one person in the world will be able to keep up with you.
#2: Be Committed
I can’t tell you how many people I meet who are 30 or 40 years old and still have no idea what they want to do when they grow up. If that’s you, you better fix it fast because people who make immense wealth figure out early the one simple thing they want.
You can’t be bouncing around all the time.
Find one thing and stick to it.
People forget that it’s a competitive world. You aren’t the only person trying to make it. If you are only half committed because you are still trying to “find yourself” guess what?
Someone else is going to blow by you who is 100% committed.
“Commit to your business. Believe in it more than anything else. If you love your work, you’ll be out there every day trying to do the best you can, and pretty soon everybody around will catch the passion from you - like a fever.”
If you are currently doing something that you can’t see yourself committing to with your full heart and mind then shut it down and move on to something else.
I have made that mistake before in business. I started a company that wasn’t something I really ever would commit to fully. I was just doing it for the money. It was stupid of me.
Here is the simple rule of thumb: If you can’t put your name on it and dive into it with all your energy, don’t do it.
Because the odds of it making it when you are half committed are low at best.
Gary Keller, who started the real estate brokerage Keller-Williams, wrote in The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results about this commitment and focus.
He says, “Success demands singleness of purpose. You need to be doing fewer things for more effect instead of doing more things with side effects.
It is those who concentrate on but one thing at a time who advance in this world.
Passion for something leads to disproportionate time practicing or working at it. That time spent eventually translates to skill, and when skill improves, results improve.
Better results generally lead to more enjoyment, and more passion and more time is invested. It can be a virtuous cycle all the way to extraordinary results. The ONE Thing shows up time and again in the lives of the successful because it’s a fundamental truth.
More than anything else, expertise tracks with hours invested.”
Gary’s words are profound. He is saying that you need skill.
But skill only comes with lots of hours practiced on something. And you will only be able to practice for hours if you are deeply committed and passionate about something.
Sam Walton was the master of committing to one thing. For him it was discount stores. That one simple commitment brought him passion and that passion led to expertise and skills and those skills led to lots of zeroes in Sam’s bank account.
Malcolm Gladwell wrote about how you need 10,000 hours to master something. So be sure you are committed to a career where 10,000 hours doesn't seem like a lot of time to you. If 10,000 feels like too many hours then take that as a sign you are in the wrong industry.
But hurry, you better commit to something soon. Time runs out on us all.
Like Charles Barkley says, “Father time is undefeated.”
#3. Move Through Failure
In the early 1950’s after having built up his first “Benjamin Franklin” store to record sales of $250,000, Sam met with his first disaster. The landlord saw how profitable Sam’s store was and used a little loophole in his lease agreement to get back the store from Sam against Sam’s will.
Sam said, “It was the low point of my business life. I felt sick to my stomach. I couldn’t believe it was happening to me. It really was like a nightmare. I had built the best variety store in the whole region and worked hard in the community—done everything right—and now I was being kicked out of town. It didn’t seem fair.
I blamed myself for ever getting suckered into such an awful lease, and I was furious at the landlord. Helen, just settling in with a brand-new family of four, was heartsick at the prospect of leaving Newport. But that’s what we were going to do.
I’ve never been one to dwell on reverses, and I didn’t do so then.
It’s not just a corny saying that you can make a positive out of most any negative if you work at it hard enough.
I’ve always thought of problems as challenges, and this one wasn’t any different. I don’t know if that experience changed me or not. I know I read my leases a lot more carefully after that, and maybe I became a little more wary of just how tough the world can be.
The challenge at hand was simple enough to figure out: I had to pick myself up and get on with it, do it all over again, only even better this time.
Helen and I started looking for a new town.”
Because Sam was committed to being an entrepreneur he was patient. And when your patient failure is just another bump in the road.
In another article I wrote:
“I once read somewhere that something like 70% of people will quit after failing once, 80% will quit after failing twice, and 90% will quit after failing three times.
Interestingly, the average millionaire has failed 3 times according to The Millionaire Next Door: The Surprising Secrets of America’s Wealthy.
So do the math 10% of the world has all the wealth and what's different about that 10% besides the fact that they have money? Those 10% of rich people have failed at least 3 times while the rest of the 90% of people have given up after 3 failures.
So ipso facto the deciding factor of the 10% of millionaires is never giving up. It's no coincidence that the figure is 10%. 10% are wealthy because that is the same 10% that doesn't give up.”
Sam Walton used failure as a catalyst. He moved through and treated it like a normal part of the journey.
Like Rudyard Kipling in his famous poem IF:
“If you can meet with Triumph and Disaster
And treat those two impostors just the same…”
Expect some failure. Just move through it.
#4. Hire Outside Consultants
This morning I was re-reading my favorite book of all time, Evolutionary Psychology: The New Science of the Mind by my friend Dr. David Buss and it defines ‘The confirmation bias’ as one of the most common patterns in the human mind.
This confirmation bias is “the tendency to selectively seek out information that affirms (rather than falsifies) an already held hypothesis.”
Take a second to ponder that. Our brains evolved to really fall in love with our own ideas.
It’s the cause of a good bit of the war, conflict, political, and religious disagreement in the world.
Just take politics (in some ways one of my least favorite subjects). Most people pick a political party because they grew up around parents and friends with that political view. Then they go out and finds some random evidence to confirm their own viewpoints.
Look if you are politically conservative I know you can find a few stats to back you up. Same if you are a liberal.
So what? That doesn’t prove you are right or that you have a grand unified theory that is correct in all situations. And make no mistake, for something to ACTUALLY be true it pretty much has to hold up in all situations.
I can decimate any argument for being a Political Conservative or Liberal in about 5 minutes by just showing some strong counter arguments.
Politics like religions is infected with this confirmation bias.
The cure is what Charlie Munger says, “I never allow myself to have an opinion on anything that I don't know the other side's argument better than they do."
Charlie’s way is the wise way because as the proverb says,
“The person who tells one side of a story seems right, until someone else comes and asks questions.”
I have been just as guilty as anyone of this. But if you want to get immense wealth you must be different than the crowd, even in how you think. Contrarians get rich.
In fact one of Sam Walton’s 10 Rules for building a business is:
“Swim upstream. Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way, there's a good chance you can find your niche by going in exactly the opposite direction.”
One of the best places to start being a contrarian and swimming upstream is guarding yourself and your business from the confirmation bias. Do not fall in love with your own ideas. This can be easier said than done.
In business the simple way to avoid the confirmation bias is hiring outside consultants. Outside consultants act like a shockwave to existing thinking. They bring in new blood.
Outside consultants were one of the key turning points for Sam Walton and Wal-Mart.
Back in the 1970’s Kmart was 20 times bigger than Wal-Mart and was really dominating the market.
But one thing changed that tipped the scales of momentum to Wal-Mart.
Sam explains, “Something else happened in late 1976 which really helped us gear up for competition… Guys like Herb Fisher of Jamesway, and Herb Gillman of Ames, and Dale Worman of Fred Meyer all came down here and went through our stores to give us their opinion of how they thought we were doing. And, man, what they had to say really shocked us.
These guys… they just ripped our stores apart, telling us how poorly we did everything. ‘The signing isn’t worth a damn.’ ‘You’ve got your prices too high on this.’ ‘This stuff isn’t even priced.’ ‘You’ve got too much of this and not enough of that.’ I mean, it was really critical.
Sam did two things right. One he brought in outside consultants to tear apart everything he thought he was doing right. Secondly he swallowed his pride, listened and actually implemented their suggestions.
Joel Salatin used to tell me, “The problem with consulting is that the people humble enough to benefit from my advice can’t afford me; and the people who can afford me won’t listen to me.”
Sam Walton was smart enough to do both things. He spent money on knowledge and research, educating himself, and bringing in outside experts and he was humble enough to implement what they told him.
It’s no coincidence that 6 years after bringing in those outside experts, Sam became a billionaire..
It’s part of the reason I do some consulting on the side. I like helping people and the results are amazing.
#5. Patiently Build
Do not give in to the Media availability cognitive bias.
This bias is described this way: “After seeing news stories about child abductions, people may judge that the likelihood of this event is greater.
Media coverage can help fuel a person's example bias with widespread and extensive coverage of unusual events, such as homicide or airline accidents, and less coverage of more routine, less sensational events, such as common diseases or car accidents…
Moreover, unusual and vivid events like homicides, shark attacks, or lightning are more often reported in mass media than common and unsensational causes of death like common diseases.
For example, many people think that the likelihood of dying from shark attacks is greater than that of dying from being hit by falling airplane parts, when more people actually die from falling airplane parts.
For example, many people think that the likelihood of dying from shark attacks is greater than that of dying from being hit by falling airplane parts, when more people actually die from falling airplane parts.
When a shark attack occurs, the deaths are widely reported in the media whereas deaths as a result of being hit by falling airplane parts are rarely reported in the media.
My friend works for the LAPD and told me that 50% of all calls to 911 are for domestic disputes -husbands and wives or boyfriend or girlfriends arguing. Do you think everyone of those gets reported in the paper?
My friend works for the LAPD and told me that 50% of all calls to 911 are for domestic disputes -husbands and wives or boyfriend or girlfriends arguing. Do you think everyone of those gets reported in the paper?
Nope -- journalists report on whatever extreme random news increases their ratings so they can sell more advertising (you can probably tell I’m not a huge fan of most journalists and news programmers).
Sam Walton opened his first store at age 27 in 1945.
But he didn’t come up with his first Wal Mart until 1962, when he was 44, seventeen years later!
Then it took 8 more years until 1970 to build up to 38 stores, 1,500 employees, and sales of $44.2 million and go public.
Then it took 17 more years till 1987 to grow to 1,198 stores with sales of $15.9 billion and 200,000 employees.
In fact, Sam Walton wasn’t the richest man in the USA until 1982 at age 64.
Let me add that this is the NORMAL pattern.
Bill Gates started at age 12 and wasn’t a billionaire until age 31, nineteen years later. Warren Buffet started at age 7 and became a billionaire at 55 - that’s 48 years later!
Enjoy the ride because unless you are smarter than Bill Gates, Warren Buffet, and Sam Walton you will probably be in it for the long haul or not at all.
This is why it’s so important that you are living out your exact business destiny and not just trying to be an opportunist looking for a quick buck in any industry you think is the ‘next big thing’.
If you are an impatient opportunist you probably will end up trying something that you don’t have enough passion and energy for to stick with it for the 12-20 years it’s going to take.
Sure a few people make money fast but the odds are low. Playing low odds is stupid in poker and it sure as heck is stupid to gamble the precious years of your life away on low odds. Like Eleanor Roosevelt said, “Life is like a parachute jump; you've got to get it right the first time.”
David Kline, an old Amish farmer I lived with in Holmes County, Ohio for a summer told me once, “Tai we Amish say that a fence that gets built fast falls down fast. But a fence that gets built slowly, falls down slowly.”
You want to be the slow fence that doesn’t fall down.
I hope these 5 takeaways from Sam Walton have been helpful.
Stay Strong,
Tai
Stay Strong,
Tai
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