Search Results for: relationship-building

Powerful Relationship-Building Habits

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Self-made millionaires are very particular about who they associate with. Their goal is to develop relationships with other success-minded individuals. Some of the individual characteristics self-made millionaires seek include:

  • Individuals who are successful or success-minded.
  • Individuals with good habits.
  • Individuals who are positive, upbeat and optimistic.
  • Individuals who are calm and happy.
  • Individuals who are able to get along with others.
  • Individuals who do not gossip about others.
  • Individuals who inspire and motivate.
  • Individuals who are enthusiastic.
  • Individuals who take personal responsibility for their lives.

At the same time, self-made millionaires also make an effort to eliminate toxic relationships. Toxic relationships have some of the following individual characteristics:

  • Individuals who are always experiencing some type of turmoil.
  • Individuals with bad habits.
  • Individuals who are negative, perpetually depressed, unhappy or pessimistic.
  • Individuals who are constantly putting out fires.
  • Individuals who are perpetually fighting with someone.
  • Individuals who gossip.
  • Individuals who are dream killers.
  • Individuals who lack enthusiasm.
  • Individuals with a victim mindset.
  • Individuals who blame others for their problems.

Self-made millionaires use four relationship building strategies to grow and strengthen their relationships:

  1. Hello Call – The Hello Call is used primarily to gather information on each contact.
  2. Happy Birthday Call – The Happy Birthday Call keeps your relationships on life support. At least once a year you are forced to reach out to your contacts to wish them a happy birthday. About 5-10% of these contacts will reciprocate and call you on your birthday, taking your relationship off life support.
  3. Life Event Call – The Life Event Call is the most powerful strategy because it puts your relationships on steroids. This is a call you make to acknowledge some life event: birth, death, engagement, marriage, health issue, etc. Life Event Calls put your relationships on steroids. They grow the roots to the relationship tree deeper and faster than any other relationship-building strategy.
  4. Networking/Volunteering – Networking & Volunteering allows you to meet new people and offers the opportunity to showcase your skills in a safe, friendly and stress-free environment. Developing a networking process is critical to success. When you network the right way, you gain customers, clients, strategic business partners, followers and networking partners and this translates into more money. Self-made millionaires are master networkers. Their networking efforts are intended to grow their association with other successful individuals. There are a number of ways these millionaires go about networking:
  • They join networking groups/clubs. BNI International is the most popular, but many self-made millionaires often organized their own unique networking groups.
  • They joined advisory boards of community businesses.
  • They joined local civic groups such as the Lions Club, Rotary Club, Chambers of Commerce, Knights of Columbus, Optimist Club or local business groups.
  • They did speaking engagements. Speaking engagements are probably the most efficient networking tool available. One speaking engagement can mean thirty or more potential clients/customers or new relationships. Many individuals fear public speaking. One of the common traits among these millionaires is their ability to overcome their fears. Public speaking sets you apart from the masses. It is a competitive advantage.
  • They join non-profit groups and eventually get on the board or run one or more committees. Non-profit groups are a very valuable resource for referrals. It allows you an opportunity to showcase your skills and develop long-lasting relationships. Referrals come from every direction; fellow members, vendors, donors and beneficiaries of the organization. Most board members on non-profits are very successful, wealthy individuals who have strong, powerful relationships. Joining a non-profit grants you access to this treasure trove of valuable relationships of the other volunteers.

When self-made millionaires find someone special, they devote an enormous amount of their time and energy into building a strong relationship with them. Their goal is to grow each new relationship from a sapling into a redwood. They used the Law of Reciprocity to very rapidly turn their new relationships into redwoods.

Here’s how this law works: each day you dedicate a portion of your day to improving the life of just one of your valued relationships. Spend time each day helping your relationship achieve their goals, improve their careers or grow their business. Fifteen to thirty minutes a day is all it takes. Eventually these valued relationships will become your biggest cheerleaders, best salespeople and best referral source. This strategy also opens doors to new contacts.

The Role of Luck in Wealth Creation

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I would be doing my readers a disservice if I didn’t acknowledge the importance of luck in the creation of wealth. Luck, I’ve learned from my research, is a common denominator among certain millionaires. Without it they would have never become wealthy.

There are essentially six types of millionaires:

  1. Savers – Savers accumulated their wealth by living below their means, saving money and then investing that money prudently.
  2. Executives – These millionaires started out working for large publicly held corporations. Through hard work, smart office politics, constant self-improvement and powerful relationship-building skills, they rose up the ladder in their respective companies. As executives, they received higher than normal compensation, which always included bonuses and stock compensation.
  3. Entrepreneurs – These millionaires are individuals who pursued a dream, started their own business, overcame obstacles, faced adversity and through superhuman persistence, succeeded. 
  4. Virtuoso’s – These millionaires devote their lives to acquiring knowledge and building unique skills. After many years of focus and devotion to their careers or craft, they become virtuoso’s at what they do.  And others are more than happy to pay them a premium for their services or the products they sell.  
  5. Trust Fund Babies – These are individuals who are born into wealth and inherit most of their money.
  6. Gamblers – These are individuals who gamble regularly and get lucky by winning the lottery or the slots or something along those lines.

For Entrepreneurs, Trust Fund Babies and Gamblers, luck plays a major factor in becoming wealthy.  The difference for Entrepreneurs and Executives is that they create their own luck. Through hard work, constant self-improvement, persistence and taking calculated risks, Entrepreneurs and Executives create the opportunity for luck to occur. They are the beneficiaries of Opportunity Luck, whereas Trust Fund Babies and Gamblers are the beneficiaries of Random Good Luck – two very different types of luck.

Luck is not a factor for the Savers and the Virtuoso’s. So, for those who do not want to depend on luck, your best option is to become a Saver or a Virtuoso.

Will Your Child be Rich or Poor? 14 Habits Every Child Needs to Succeed in Life

Tom Corley boats - cropWhen I travel the country speaking to high school and college students about exactly what they need to do to become financially successful in life, I always begin my presentation by asking the same three questions:

“How many want to be financially successful in life?”

“How many think they will be financially successful in life?”

Almost every time I ask the first two questions, every hand rises in the air. Then I ask the magic third question: [Read more…]

Millionaire Employees

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In my study, I discovered three types of self-made millionaires:

  1. Savers
  2. Entrepreneurs and
  3. Executives

This topic will focus on the Executives.

Executives are ordinary individuals who decide to spend their lives working for big, publicly-held companies. These companies offer additional compensation in the form of stock: qualified stock options, non-qulified stock options, discounted stock purchase arrangements, stock grants and restricted stock.

Employed, self-made millionaires use specific strategies that make them un-fireable:

  • They become in-house experts within their company.
  • They become industry experts within their industry.
  • They develop a niche within their company or their industry.
  • They forge power relationships with other influencers within their company.
  • They forge power relationships with other influencers within their industry.
  • They use four core relationship-building strategies: Hello Calls, Happy Birthday Calls, Life Event Calls and Networking/Volunteering.

There are many ways to become rich. Climbing the corporate ladder in a large publicly-held company is one of the less risky paths to accumulating wealth.

Three Types of Self-Made Millionaires

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In my five-year Rich Habits Study, I interviewed 177 self-made millionaires. I am often asked by the media how they got rich.

Essentially, my self-made millionaires fell into three distinct groups:

The Savers

The first group of self-made millionaires in my study saved their way to wealth. These Savers accumulated their wealth by living below their means, saving money and then investing that money prudently. According to my Rich Habits research, this path to multi-millionaire status took about thirty-two years.

Savers typically were risk averse, employed most of their lives, earned a moderate wage and had a low or moderate standard of living.

Self-made millionaire Savers were among the least wealthy in my study, with an average net worth of $3.4 million.

Being a Saver is the risk-averse way to building wealth. It’s the safe path to wealth accumulation. However, it required discipline, sacrifice and attention to detail in order to live below their means, save and prudently invest.

The Executives

The second group of self-made millionaires in my study worked for large publicly held corporations. Through hard work, smart office politics, constant self-improvement and powerful relationship-building skills, they rose up the ladder in their respective companies.

As executives, they received higher than normal compensation, which always included bonuses and stock compensation.

This stock compensation was in the form of one or more of the following:

  • Qualified stock options
  • Non-qualified stock options
  • Stock rights
  • Restricted stock
  • Outright stock grants

The stock compensation, irrespective of its form, was always disproportionate to their base compensation, meaning, significantly higher than their base pay. This stock compensation was responsible for generating most of their wealth.

It took this group about twenty-five years to accumulate their wealth.

The Entrepreneurs

The third group of self-made millionaires in my study were the entrepreneurs – individuals who started their own business. This group, by far, accumulated the most wealth, averaging $7.4 million over an average of twelve years.

This was the highest risk and hardest path towards building wealth. In fact, 34% of the self-made millionaire entrepreneurs in my study failed at least once in business, which took a toll on their families and their lives.

The upfront investment in time and money was significant.

The early part of the journey for the typical entrepreneur was one fraught with nothing but uncertainty.

They invested most, if not all of their time, money and energy in something with no guarantee of success.

Despite their best efforts, things often went wrong. In the beginning, there was an endless parade of setbacks, obstacles and mistakes.

With every misstep, doubt was a constant companion. These doubts fill their waking moments and invaded their dreams.

Peace of mind was hard to find. Uncertainty sucked the life out of them. It often drained them of their confidence and every setback caused them to wonder if it was all worth it.

It took superhuman resilience to survive the entrepreneur’s journey.

But the journey transformed their lives and the lives of their families.

It forced them to develop new skills, acquire new knowledge and learn how to find and build relationships with other outstanding, success-minded people.

Those who were able to survive the journey and succeed, became millionaires and found happiness and fulfillment awaiting them on the other side of their journey.

There’s no easy path towards accumulating wealth and becoming a self-made millionaire.

Saving your way to wealth is the least stressful and least risky path towards accumulating wealth, but it requires enormous discipline and sacrifice.

Climbing the corporate ladder to wealth requires unique skill-sets and more than a little bit of luck. Finding a publicly held company to work for is easy. Finding one that is in a growing and expanding sector where profits and share price are consistently rising requires some luck.

Being an entrepreneur is perhaps the hardest way to accumulate wealth. The ups and downs, characteristic of entrepreneurship, requires enormous emotional control, long work hours, persistence, resilience, focus and the ability to rebound from mistakes and failure.

Good Habits Are Gifts That Keep on Giving

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Once a habit is formed, it’s hard to break. If you forge good habits, those good habits will become harder and harder to break over time.And they will pay dividends your entire life.

Where did you pick up most of your habits in life? I’ll bet you never gave it much thought. Your habits did not just manifest out of thin air. They came from some source. Each source, good or bad, inspired you to adopt certain habits. The habits we adopt in life primarily come through associations we make in life, our education, our experiences and our environment.

Parents, teachers, supervisors, coaches, family, friends, spouses and teammates have the most influence over the habits we forge in life. Because good habits pay dividends throughout your lifetime, they are perhaps the best gift mentors can give to their mentees.. What are some of the best habit gifts mentors can give?

  • The Habit of Reading – Reading opens up your mind. It can take you to exotic places, acquire unique knowledge or help set you on the right path in life. One book can alter someone’s life, so giving books will pay dividends that are hard to put a value on.
  • The Habit of Exercise – Exercise is not jut good for the body, it’s good for the brain. And there are many recent studies which provide evidence that exercise increases your life span. Offer your kids, friends or a work colleague to become your gym partner. In a few months, the gym habit will form and will pay dividends for the rest of their lives.
  • The Habit of Building Rich Relationships – Teaching others relationship-building habits such as making happy birthday calls, life event calls and hello calls helps them to build strong, lifetime relationships. Equally important is teaching others the habit of focusing their relationship-building efforts on the people who will help improve their lives, or Rich Relationships. Rich Relationships are relationships you build with other positive, success-minded people. Because birds of a feather like to flock together, when you forge one relationship with a positive, success-minded individual you tap into their network of positive, success-minded relationships. These Rich Relationships pay dividends throughout your life by opening doors for you. They also help guide you in life in taking action and making decisions that will help improve your life.
  • The Habit of Saving – When you learn the importance of saving early in your life, this habit pays dividends down the road in the form of financial independence. Thanks for modern medicine, individuals can now look forward to living into the eighties and nineties. That one habit gift of saving can therefore pay dividends that last throughout your retirement years.
  • The Habit of Being Frugal – Being frugal is not the same as being cheap. Frugal means spending your money on quality. Quality purchases last for many years and that means you can enjoy that car, furniture or dress for a long time. When you give the habit gift of frugality, you are giving that person a period of extended enjoyment in the purchases they make during their lifetime.

Make the Call – The Life Event Call

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One of the strategies the wealthy use to build long-lasting, valuable relationships is the Life Event Call.

These calls are made to clients, customers, patients or any relationship you value and want to grow, in order to recognize a particular event that occurred in the contact’s life.

An example would be if a client or their spouse had a child. Make a call simply to congratulate them on the birth. Happiness emotions are running high and emotions, good or bad, hold the key to long-term potentiation (long-term memory formation).

When they get that call from you, it will stick in their memory banks and you will forever be associated with one of the happiest events of their lives.

Other examples of opportunities to make a Life Event Call are:

  • Graduations
  • Promotions
  • New Job
  • Death
  • Illness
  • Marriage
  • New Home
  • Relocation
  • Any events in the lives of the children of your valuable relationships
  • Awards
  • Accomplishments

Life Event Calls put your relationships on steroids. They grow the roots to the relationship tree deeper and faster than any other relationship-building strategy.

 

 

 

 

 

The Franklin Effect and The Law of Reciprocity

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My wife has a lot of friends. More friends than anyone else I know. I find it counterintuitive because she seems to demand a lot from her friends in the form of favors. But, she always reciprocates, meaning, it’s never one-sided. What amazes me the most is that my wife will ask someone she just met for a favor right out the gate and, of course, eventually reciprocate.  

These two habits my wife has forged have long intrigued me. I didn’t understand how or why they helped her in building strong relationships until I embarked on my obsessive study of daily habits many years ago. There are actually two psychological phenomenons at play, I discovered.

The Franklin Effect

The Franklin Effect is named after one of the most famous founding fathers in America –  Benjamin Franklin, who used it as a relationship-building tool. It has now become an accepted method for building strong relationships. Here’s how it works:

If you want to get someone to like you, either ask them for a small favor or perform a small favor for them. 

For some strange reason, human beings like doing small favors for each other. 

The Law of Reciprocity

The Law of Reciprocity states the following:

If you do a small favor for someone they will feel obligated to reciprocate.

The rich people in my Rich Habits study all seemed to have one thing in common – they had a lot of relationships. 88% had 200 or more relationships. Conversely, 95% of the poor people in my study had less than 200 relationships. When I dug deep into the reasons for this dichotomy, that’s when I discovered that the rich people in my study were using the Franklin Effect and the Law of Reciprocity for relationship building. As a result, these two tools became part of my arsenal of Rich Habits, which I obsessively write, talk about with the media and teach to millions around the world.

My wife, without knowing it, was employing both tools to build her enormous number of relationships. And many of the wealthy in my study, like my wife, were completely oblivious to their use of these two relationship-building tools. My wife had picked up these tools from her Dad and then turned them into lifelong habits. This is not uncommon. Most of the habits the wealthy had forged in life came from their parents as well.

Less than 5% are raised in families where parents teach their kids the Rich Habits. We are most definitely not all on equal footing when we step foot onto the adult stage. Those who have the Rich Habits have at their disposal certain habits or tools, like the Franklin Effect and the Law of Reciprocity, thanks mostly to their parents. This enables them to cut through their competition, like a hot knife through butter, accumulating millions of dollars along the way.

Me, Me, Me – Always Our Favorite Topic

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Probably the most significant take away from the book How to Win Friends and Influence People was the insight that we are consumed with ourselves and that if you want to win new friends and influence others, focus on their needs, wants and their lives.

In my Rich Habits study this doctrine of me, me, me played out in a number of different ways:

  • Mentoring others was a habit practiced by 68% of the wealthy in my study.
  • Calling others on their birthday, to say hello and to acknowledge some life event was practiced by 80% of the wealthy in my study.
  • Gossiping about others was avoided by 94% of the wealthy.
  • Sending thank you cards was a habit of 75% of the wealthy.
  • Not saying what’s on your mind and vetting the words that come out of your mouth was another habit practiced by 94% of the wealthy.
  • Volunteering 5 hours or more a month to help those in your community was practiced by 72% of the wealthy.
  • The wealthy used tools in order to remember the names of those they met infrequently, such as the Grouping Tool.
  • And lastly, controlling negative emotions was a habit 81% of the wealthy forged in order to build lasting relationships.

It’s clear that we are obsessed with our own lives. When anyone comes along and focuses their attention on what’s important to us, we melt like butter on a hot stove. The key to building strong, long-lasting relationships is to fight the urge to talk about yourself and your life and, instead, to focus your conversation around the lives of the relationships you want to grow. When you make this relationship-building doctrine a daily habit you will win over almost anybody in life. In the success game, relationships play a critical role in opening doors that would otherwise be closed. If you want to win that game you need to play by the rules.

Happiness = Fountain of Youth for Your Brain

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When you have a positive mental outlook you automatically flood the brain with serotonin and dopamine, two neuro-chemicals that cause brain cells to create new connections (synapses) with other brain cells within the brain. When you’re happy, your brain literally grows.

When you have a negative mental outlook serotonin and dopamine levels in the brain drop, reducing the number of synapses within the brain. When you are unhappy or depressed, brain cells that no longer connect with other brain cells die. Your brain literally shrinks.

Happiness, therefore is the fountain of youth for the brain. That is why it is so important to forge habits that increase happiness and reduce unhappiness. What habits increase happiness?

  1. Daily Aerobic Exercise – Aerobic exercise is a happiness activity because it contributes to an overall feeling of well being. Aerobic exercise releases endorphins, natural painkillers that promote an increased sense of well-being and make us feel “happier”.
  2. Daily Learning – Our brains are hardwired to learn. When we learn something the brain rewards you with specific neuro-chemicals, such as dopamine, serotonin and brain-derived neurotrophic factors, all of which make us feel happier.
  3. Relationship-Building Activities – The latest science on happiness (Harvard University Longitudinal Study on Happiness) indicates that the more close relationships you have, the happier you are. Volunteering, networking, team sports activities, club participation, mentoring and groups you participate in will help increase the number of close relationships you have.
  4. Practiced Positivity – Meditation, expressing gratitude daily, daily positive affirmations and reading something inspirational create a positive mental outlook.