PART I The Twelve Truths
1 The Growth Mindset
You were not born a winner, and you were not born a loser.
You are what you make yourself to be.
—Lou Holtz
WHILE VISITING A LOGGING CAMP in Myanmar, an American tourist watched how at the end of each day, the loggers secured their elephants with just a small piece of tattered rope tethered to a teak tree. The tourist couldn't understand how such a thin flimsy rope could restrain a powerful 8,000 lb. bull elephant. Having watched the pachyderm haul over a dozen one‐ton logs that afternoon, surely, thought the tourist, this massive creature had the brawn to destroy the cord and break free. Quite perplexed, the American asked the trainer, “Why don't the elephants just break free?” The trainer explained that from birth, the elephants are tied up with the same size rope, and since as babies they weren't strong enough to break free, they were conditioned to believe that the rope is inescapable. By the time they are full‐grown adults, they stopped trying and accepted their lot in life. What's tying up your future?
Truth #1 – You Must Have a Growth Mindset
If you are reading this book and are broke, here are three comforting facts: you are not alone, it's not your fault, and a year from now you can be a millionaire. While the stock market is at an all‐time high, the sad truth is that the vast majority of people are drowning in debt. Americans owe more than $1 trillion in credit card debt and another $1.5 trillion in student loans. According to a recent Bankrate survey, the majority of Americans don't even have the funds to cover an unanticipated $1,000 emergency. As the Covid‐19 virus pandemic taught all of us, life can be full of expensive surprises. Your car needs a new transmission, your appendix bursts, or you suddenly lose your job. The smallest financial challenge and you could be just weeks away from being on the street homeless. The income inequality gap in the US has never been wider, with the poorest half of Americans owning just 1 percent of the nation's wealth. According to recent research by the Institute for Policy Studies, 140 million Americans are poor or low‐income, living below 200 percent of the Census's supplemental measure of poverty. For almost half the US population, life is a never‐ending balancing act of juggling bills and paying off debts.1
Before you know it, retirement age creeps up, leaving one third of US households with nothing saved for their old age and the majority (56 percent) having managed to only stash away less than $10,000. Adding to these woes are the facts that younger people will be living longer and the Social Security trust in the US will run out of money by 2034!2 For most people, the golden years aren't so golden, with financial independence and security completely out of their reach.
How Do So Many Fail in a Land So Rich with Opportunity?
There are two reasons most people don't attain wealth: they didn't think they were smart enough to get rich and they were never taught how to create wealth. Let's dispense with the myth about intelligence and money. “There is no relationship between IQ scores and net wealth,” according to Ohio State University economist and research scientist Jay Zagorsky. Zagorsky tracked the progress of 10,000 participants from 1979 to the present.3 While those with higher IQs tended to earn more (each IQ point above average increased earnings from between $202 to $616 per year), smart people weren't any better at holding on to their money and building wealth. Surprisingly, those with higher IQs tended to have more problems. When Zagorsky compared people's IQ scores and their likelihood to have problems such as paying bills, declaring bankruptcy, and defaulting on credit cards, those with the highest IQs were more likely to have financial instability.
What if you didn't get good grades in school? That doesn't matter, either. Standardized tests and rigid curriculums do a poor job of measuring creativity and drive. As we will discuss in later chapters, effort, critical thinking, collaboration, and curiosity are the traits most needed for success. Unfortunately, just like the tethered elephants, too many people internalize failures at school into believing they will fail later in life. Average student Steven Spielberg, the genius director of Jaws, Indiana Jones, E.T., Jurassic Park, and Saving Private Ryan, was rejected twice by the University of Southern California's film school. (Decades later, multi billionaire Spielberg, whose films have grossed more than $9 billion, showed that there were no hard feelings when he donated $500,000 to USC's School of Cinematic Arts.) Even Nobel Laureate and renowned physicist Albert Einstein failed his entrance exam to the Zurich Polytechnic Institute. A recent study of 700 millionaires found that their average GPA was 2.9 out of 4; C students were the most likely to become millionaires.4 Forget about how you did in school. You don't become a success by looking in the rearview mirror.
Believing in your ability to succeed is the key to becoming Future Proof. Self‐perception is more important than any other factor in predicting success. Scientists at Basel University in Switzerland and the University of California analyzed the data of 1,824 people ranging from 16 to 97. “We established that self‐esteem is more likely to influence success than vice versa,” according to psychology professor Ulrich Orth who led the research.5 If you think you can or think you can't, you're right. Self‐made billionaire Larry Ellison dropped out of two colleges before co‐founding Oracle. “I studied everything but never topped,” the world's most successful average student Bill Gates once declared, “But today the toppers of the best universities are my employees.”
Most parents, having spent their lives struggling to make ends meet, encouraged their children to get good, steady jobs and then retire with a pension. In 1950, the average American family income was $3,300 a year and the median home price was $7,354.6 In other words, a house cost a little more than two years' wages. The American dream was within reach of most Americans. In postwar America, companies were adding jobs and the average worker stayed at his job for over 14 years. People felt secure in their work, financially secure about their future, and could send their children to college debt‐free. The greatest generation lived a Future Proof lifestyle. Such a halcyon world is long gone.
Job Security Is a Myth
Hundred‐year‐old companies are being displaced by newer, leaner startups. In a booming economy, retailers such as Radio Shack, Payless, Toys‐R‐Us, Kmart, and Macy's shuttered over 5,000 stores in 2017 displacing tens of thousands of workers. Of the original Fortune 500 companies, only 10.4 percent are still on the list.7 And when large companies fail, so do their underfunded pension plans. Over 120,000 retired United Airlines workers saw their former employer's pension fund collapse when the company filed for bankruptcy. The same thing happened to the pension funds of the once great industrial giants Delphi and Bethlehem Steel. So where are these so‐called secure jobs?
Manufacturing jobs in the United States peaked way back in 1979. Even if factories are coming back to America, they are going to be employing robots, not humans. According to the Washington Post, American factories now produce twice as much as they did in 1984, but with one‐third fewer workers.8