Chapter 8

Some people are habitually behind "with their hauling," as the Missourians say. No matter how their salaries may increase they are proportionately behind with their hauling all the time. When an employe gets $50.00 a month he is owing $75.00, he is working hard at the catching-up game all the time. He figures that if he only got $75.00 a month, he could apply the $25.00 extra and could catch up in three months. The theory is all right but the practice is not, for when this individual gets $75.00 a month, instead of applying that $25.00 extra to catching up, he finds that he wants better neckties and better underwear, and makes greater expenditures all along the line, so instead of wiping out that $75.00 debt he had when earning $50.00 a month, he finds himself $150.00 in debt on his $75.00 salary.

This catching up has a bad influence. It worries the individual; he does not do his best work.

When you have all your bills paid and a surplus of $500 in the bank, your head is higher, your chest is broader, your backbone stiffer, and you have a confidence that helps you take on greater responsibilities.

To be in debt is to be under obligations to your friends, and it kills off those strong qualities which you naturally possess but which warp when you are catching up. The man who is catching up cringes instead of standing erect, he is suppliant instead of dominant. He is disturbed by little things, and in the meantime the catching up process is tearing down his nervous system.

Get caught up with your hauling. Whatever your income is, save a percentage of it. Do not mistake us in thinking that we are preaching the old sermon of the savings bank, which is, save your pennies and the dollars will take care of themselves, for our friend Grizzly Pete of Frozen Dog, Idaho, says: "Save your pennies, the dollars will be blown in by your heirs."

No man gets rich through mere saving, but it is the training the man gets in saving the pennies that gives him a good idea of values of things and shows him the importance of having a reserve.

If the boss is extravagant in little things, the employe multiplies the extravagance.

If you are always catching up while you are an employe you will always be catching up while you are boss. If you are always saving and putting by a reserve while you are an employe, you will be doing the same thing when you are a boss. The principle is the same. It is merely a question of figures.

Do not take on financial responsibilities until you see your way clear to meet the responsibilities, and in addition to meeting them, see to it that you have made an allowance for good measure.

Catching up calls for double effort and double work.

Anger

In proportion as a man is wise, he controls his anger.

Centuries ago the following truth was written: "Whom the gods would destroy they first make angry," and in the same era there was also given us another truth: "A soft answer turneth away wrath."

A man's judgment gets twisted, his ground becomes insecure and his point of vantage weakens when he becomes angry.

The man who keeps calm when the other fellow gets angry has infinitely the best of the matter.

Let the other fellow fret and stew and get red in the face, but you keep calm and you will win the fight every time.

Control yourself, change the subject, and absent yourself when anger shows.

Cultivate poise, refrain from lowering yourself to the methods of the ignorant, which is anger. By keeping your temper when your adversary gets angry you thereby show your superiority, and your adversary instinctively feels you are a bigger man than he is.

A cool head is wonderful capital for an employer or an employe.

Don't mistake coolness and poise for submissiveness and servility. Don't let people impose on you and take advantage of your good nature.

State your position in cool, well-weighed words, and carry conviction with them by your manner.

It takes two to make a quarrel. Whenever anger is present, do not be one of the two.

Precedent

Precedent has caused many failures. We refuse to make a bold move and inaugurate a new system because we hate to break away from the methods established by successful predecessors.

We say "Let well enough alone." We forget that times change, and that conditions which made our competitors successful, may not now exist.

If you have the precedent habit it is an admission that you have not the brains to originate, and you are trying to take advantage of another's brains.

You remember the old fable of the lion and the jackass. The jackass was browsing on thistles in the desert. It took all his time to gather enough of the scanty vegetation to keep him alive. One day the jackass noticed the lion comfortably eating a lamb, whereupon he said "That's the scheme for me. I will do the same trick as Mr. Lion," and forth-with the jackass found a dead lion and covered himself with the lion's skin, hoping that with the lion's skin he would appear as a lion and thus be able to catch game in large portions, and relieve himself of this slow monotonous, hard work he had been used to. The jackass sallied forth, but he could not catch a lamb. He had copied the lion so far as physical appearances were concerned, but he did not have the brains of the lion, and he failed.

There are hundreds of wealthy business concerns today who are slowly dying from dry rot because they have not the nerve to break away from the precedent that built up their businesses. They let sentiment outweigh common sense. They maintain the same old lines and follow the same policy because that policy years before things made them successful.

Many manufacturers continue to advertise in publications which have long since lost their advertising value. These manufacturers have the habit, and on account of precedent they are afraid to break away. They do not recognize that since they started there are dozens of newer, brighter and better publications than the ones they are using.

Columbus, Marconi, Edison, Stevenson, Newton, Fulton, and hundreds of other originators would never have succeeded if they had followed precedent. They required strong courage to break away from accepted methods. Each of these men was told in so many words that the thing never had been done, and consequently could not be done.

Business men who throw aside precedent are more apt to succeed, for by throwing aside precedent they show they have originality instead of the ability to copy.

Financing

A financier and a general are much the same thing. The financier makes the dollars do the work at the best place, and the general does the same thing with his soldiers. The financier with plenty of money in the bank and the general with plenty of soldiers at his command are alike. They give the order and the thing is done, for they have the material to do the thing with. The difference between the good financier and the bad financier is like the difference between the good general and the bad one, the difference being that the good one makes a little go a long way, and gets the best results from the little under his command.

The cause of many failures is due to bad financing instead of bad business. The trouble is few business men know exactly "where they are at."

A detailed statement should be kept of all obligations. The business man should get along as far as possible without giving notes, and when he does give notes he should see to it that the notes are taken up when due.

The business man who overstocks shows he is a bad financier. The man who buys too much on possibilities makes a mistake.

As you go along this year you should make statistics of the receipts and expenses by the day, week, month and year. With these figures you can make up a budget of your receipts and expenses for the coming year with reasonable correctness.

Keep your resources well in hand. Buy often rather than buy in large quantities.

If you are owing money to the bank, have your plans arranged so that you can realize on your assets quickly.

The good general always plans his campaign to be ready for attack that may come through unexpected sources. The good financier is always ready for an attack on his finances.

The concerns from whom one buys may be prosperous. The bank with whom one deals may be flourishing, and yet without warning something happens and you are suddenly called upon to liquidate your indebtedness. You should be prepared for this sudden call.

Financing is an art, and you will never be a good financier unless you have had perplexing problems to solve. In order to solve problems you must have the pro and con, in other words, the details of your receipts and expenses. These figures should be put down plainly, with elaborate detail, if necessary, so you may count on your figures and make your plans accordingly. Preparing for emergencies is one of the first things the financier should understand.

Discontent

While in another part of this book we show that ambition is one of the things that makes success, yet it must not be forgotten that discontent is another great factor in bringing about success.

When the young man quits school he has life before him and has ambition to succeed. It is not particularly necessary that we find out what his ambition is to start him on the right path. Let the young man get started at any thing. If he is ambitious and has ability in him to manage a business he will get there finally.

He may get started in the wrong line and this will make him discontented. The discontent will cause him to try another tack, and so long as discontent makes him change he will finally get into the right line by the process of eliminating those callings which make him discontented.

Time after time we find in reading the stories of successful business men that they have floundered around in the beginning of their career from one business or calling to another. Discontented with each of them they changed and changed and changed until they finally struck the thing best suited to them, and all the changes they made in the past were distinctly beneficial because of the experience they obtained.

If it were not for discontent many of the leaders in the business world today would still be on the farm or clerking in a country store.

Keep busy, young man, do the first thing that comes handy. Change your job if you are discontented, for no one can do his best work if his heart is not in it. When discontent causes you to change frequently you may be sure that some day you will strike your gait, and then ambition will fire you to stick at it.

When you get on the right track and are not discontented you have struck it right.

The Generalist

The chapter on "The Specialist" is almost inseparable from this chapter. One is the positive, the other the negative. What we have said about the specialist we could repeat by taking the opposite of the question for the generalist.

This one point, however, we wish to make clear, even at the risk of repetition. Do not be a generalist in business. If you divide your efforts your results will surely be divided. The business man who goes in many outside ventures will not get along as far in the matter of wealth as the man who does one thing well.

We hear about "The jack of all trades," but the aftermath of the jack of all trades is "master of none."

Only one concern in fifty succeeds in business, therefore it calls for your best efforts if you wish to succeed. It calls for a singleness of purpose.

If you make more money than is necessary in your business put out the money in some form of investment that will require little of your attention. Buy mortgages or real estate. Get stuff that you can put in the green box in the safety deposit vault and not have to worry about.

The stockbroker has a lot of unwritten history about the business man who divides his energies between his office and the ticker. The business man who is trying to make more progress than his competitor in business and at the same time trying to beat out the stock market is dividing his energies, and between the two occupations he is likely to fail. Be a generalist in pleasure and recreation, but not in business.

Our Aches and Pains

When we work hard with our body all day our backs ache and our muscles ache. This is all right, for Nature has given us sweet refreshing slumber to drive away the aches and pains so that on the morrow we are ready for the fray.

In proportion as we have endured these backaches and pains and are patient in our occupation, the aches will lessen until finally we have laid up a store of energy so that the aches will not bother us.

The backaches and muscle-aches and headaches we have, when they come from honest work performed for the benefit of those we love, are sweet aches and pains. They represent sacrifice, these aches and pains do, and sacrifice brings happiness. The only way to be truly happy is to do something for somebody, and doing something for somebody is making a sacrifice for somebody.

The aches and pains we have endured in performing labor for those we love is the best evidence of genuine sacrifice.

We gladly suffer when our efforts are appreciated, and when those for whom we work are grateful, but there is one pain that never lessens, and it is the pain that kills. That pain is a heartache, and the heartache comes from ingratitude.

After we have endured backaches and headaches for those we love and find the effort has not been appreciated, then comes the heartache, and that is the ache that kills.

Whenever anyone does something for you, your first concern should be to show appreciation.

Gratitude is one of the most priceless gems in nature's collection. There is nothing lower on the face of the earth than an ingrate and a snake's belly.

Dressing

Many persons look upon the good dresser, and think that good dressing is an evidence of success. In dressing, as in everything else, the extremes should be avoided. The man who is temperate has the right idea. A man must be temperate in dressing as in all other things.

We have all seen the solicitor and the business man who look like a fashion plate or tailor's model. Each day he appears with a different suit. He wears the latest ties, the latest shoes, and appears in the height of fashion. This extra dresser is a four-flusher, for he is trying to appear as something that he is not. Grizzly Pete says "It ain't what's on a man but what's in him that counts."

In proportion as a man's character or mental training is lacking, he often tries to make up for it in dress. With some it is a case of ninety per cent. dress and ten per cent. man, and with others ninety per cent. man and ten per cent. dress.

In trying to find a word of cheer for the good dresser, the writer vainly endeavored to recall some successful business man who had climbed the ladder step by step through a period of years, during which he was always dressed in the height of fashion. We recall to mind several extreme dressers who are possessed of millions, but these millions were the result of accident or inheritance rather than ability. We cannot remember any instance of a plodder who started in with nothing and made his millions who during the operation dressed in extremes.

We have an autographed photograph of Marshall Field, and we venture to say that there are fifty men in Field's store more expensively dressed than Marshall Field was at the time this picture was taken, shortly before his death. Not that Marshall Field was poorly dressed, but that he was dressed like a gentleman. A gentleman does not wear extreme collars, extreme neckties, extreme coats. Marshall Field's clothes fitted him well, the goods were of splendid quality, but of modest design. Marshall Field was ninety per cent. man and ten per cent. dress.

When a man recognizes he has not the ability to make a name for himself on account of his brains, he resorts to dress in order to give him distinction.

The ability to dress in the extreme of fashion is an advertisement to the world that dress is your specialty, and if you are a specialist in dress you will not be a specialist in business.

Declare Monthly Dividends

Make it a rule to declare dividends every month. We venture to say to the business man that you are meeting all your fixed charges, paying your rent and employes, paying for postage stamps, lights, taxes and all other fixed charges. When the Government put a two cent tax on your checks you paid that tax. You certainly can add one more fixed charge to your business, and that fixed charge should be a percentage of your cash receipts.

It is usually a difficult thing to draw your profits out of your business in a lump at the end of the year, but if you draw your profits out in monthly installments, you can do so without any burden.

The business man should figure what percentage of his cash receipts is profit, and this percentage should be deducted every month, less a little leeway to make the matter easier. Make the percentage a fixed charge and put this money away in a special account as a reserve fund if you do not wish to draw the dividends out of your business. If you have this reserve fund drawn out in monthly installments, you are ready for attack if your creditors call on you suddenly.

If you have a snug little sum in a separate bank as a reserve sufficient to withstand any attacks on your business, your step will be more elastic, you will have more confidence in yourself, you will have less worry than if you are keeping your nose to the grindstone and have no reserve.

There is some amount between a dollar a week and a thousand dollars a week which you can draw out of your business without affecting it. If you make this a fixed charge you will take care of it, and you will arrange your business and your purchases so that this fixed charge will be properly taken care of each month. You will trim your expenses a little closer, and your business will thus benefit by having this fixed charge.

Nearly every failure is due to sudden calls of creditors or refusal of the bank to extend further credit. This fact shows plainly the necessity of having a reserve fund.

Take your figures for several years back and find what percentage of the total receipts was profit. If, for instance, your business earned $9,000 and your total sales were $100,000, then 9% of your receipts represents profits. You can therefore declare a monthly dividend of 8%, and when Christmas comes you will have an extra dividend, being the accumulated 1% each month you did not draw out in dividends.

Debt

If it were not for debt most banks would go out of business, for banks live because debt is a recognized factor in business.

The plan of getting rich through saving is a very difficult and practically impossible road to wealth.

The man who is working himself out of debt puts in better effort and longer hours into his business than the man who does not owe a cent. Go in debt reasonably and carefully, and you can make money with other people's money.

Money has a fixed value in itself in the matter of earning capacity. This fixed value is 5% or 6% or 7% as the case may be. One who puts his money in securities gets his money which the cash earns without effort on his part. The hustler, however, can make 10%, 15% or 20% on the money, plus his hard work. Therefore there is an opportunity for a hustler to borrow money at 5% or 6%, and with that money and his energy earn 10% or 15%.

The active man can therefore pay 6% per annum for money, and use that money to discount monthly bills at from 2% to 5%.

The building and loan association, the installment firms and monthly payment real estate concerns show what people can accomplish who go into debt. Thousands of families now live in their own homes because they went into debt. Few of these families would have homes if they started in on the saving-the-money-first plan and bought for cash.

Don't go in too deeply. Calculate your earnings in business. Allow a wide margin for discount on your figures. Hard times and unlocked for reverses come, therefore you should play safe. Go into debt on a 25% or 50% basis of what you are reasonably sure you can pay.

Up to forty years of age a man is sowing and tilling, and after forty he reaps. The farmer goes into debt during the spring and summer, and reaps in the fall.

Very few of our great men had much money before they were forty years old. Up to forty is the debt period. Up to forty a man pays interest; after forty he collects interest.

Business calls for the hardest kind of work up to forty or fifty. After that time the man makes up in judgment and experience what he lacks in physical activity.

Work hard until you are forty. Go into debt and make the money you have borrowed earn money. After forty make money by investing your funds in sound securities, so you will run no risk of losing what you have worked so hard for during your younger days.

The average banker is over forty. The hustling business man who borrows is usually under forty. Nature gives the young man ambition, ability and willingness. Nature gives the middle aged man judgment, experience and conservatism.

Forty years will determine what is in a man. If he has the stuff in him to earn a competence at forty, he has usually acquired the judgment and experience to keep it after he is forty.

The man born with a golden spoon never knows what hard work is. He does not go into debt because he has plenty of money for his requirements. At forty he has not the experience of his brother who was born in an environment of hard work and little money. The law of compensation thus bestows a subsidy on the poor boy and a handicap on the rich one to even things up. The poor boy goes into debt and works hard; the rich one lets the money do the work for him.

There is no joy or happiness in the possession of things we have not worked for, so while we envy the rich who have never worked we should take satisfaction in the law of compensation which gives us a subsidy in the way of ability to work hard and earn money, so that later on we may enjoy the money better than our rich friend who has never worked for his money.

Don't go into debt on the wholesale plan, hoping to make a big coup. Don't try to be a millionaire. Don't set too big a mark. Have your ideal advancement, no matter how little that advancement is. If you go forward each week or each year you will find at forty or fifty that your substance piles up much faster than you imagine. From forty to fifty years of age most fortunes are made. From twenty to forty your efforts have been foundation work, and the foundation does not show up much above the ground. From forty to fifty you are building the superstructure, and when you commence building that your progress seems more rapid.

Healthy indebtedness is a great incentive to hard work and a material benefit in building character and gaming experience that in later years will be of untold value to you.

Brains--Birth--Boodle

One of the weaknesses of the human race is envy. No one is entirely free from envy, although the true philosopher who has studied himself and has things sized up correctly is nearly free from envy.

Human kind have three measures for gauging the other fellow. We measure the other fellow either by his knowledge--which is brains, by his pedigree--which is birth, or by the money he has accumulated--which is boodle. These three Bs are like three stars in the sky. The first star--Brains is usually the dimmest, but it is really the brightest star of all. Mankind is prone to look at the brighter stars of birth and boodle.

These three stars of Brains, Birth and Boodle, are three aristocracies. The first aristocracy has no less authority than that of the Almighty. The aristocracies of birth and boodle are sham counterfeits gotten up by man. They do not mean anything when put into the crucible and tested by fire.