I Go Broke When…

i go broke when

The truth is that I always go broke when I stop reading.

Before I started my first business I was obsessed with reading everything I could. Fiction (because I wanted to write novels) and non-fiction (because I loved technology and something called “The Internet” was just starting).

And then I started reading books about business because the Internet and entertainment and my life all seemed to be merging with business.

My first business was creating websites for people. My second business was creating “mobile websites” for people, which really didn’t exist then.

In between the first and second business I played poker for 365 days. Even the day my daughter was born. I couldn’t help myself.

My accountant finally said the worst thing he can ever say to me. He said, “you should be starting another business”. I wish I had just kept playing poker.

I love everything in that second business. Here’s what happened.

I stopped reading. I separated from my wife. I had no clue what my business did. I fell in love. I started drinking a lot. I went broke. Lost my house. Lost my family. Blah blah.

I’m sick of “failure porn”. Ok, we get it.

People fail. Then they come back from it and somehow they turn into Steve Jobs. Steve Jobs is this generation’s mythical “phoenix”.

So now I get to listen to music on my phone and my teenage daughter probably sends nude pictures to boys on her iphone.

When I was playing poker I read every book ever written about poker. I watched every video. I was still reading a lot.

But something got to my head. Something bad when I started my second business.

I was really unhappy in a lot of ways. I can’t even tell you why I was so unhappy. My dad was always going broke so I thought I was finally going beyond where he went. I thought I was superior to him. I thought I didn’t need to do what he did. 

And since he was a big reader, I no longer needed to read. And since he stayed with his wife, I no longer needed to.

I know now: investing in your mind is the best investment you can make. Investing in your relationships is right next to investing in your mind.

But forget about failure porn. Don’t fail. Try to succeed. Reading is succeeding.

This is advice often given writers: write the book YOU would want to read.

But really the advice should be for readers: READ the book you would want to write.

This is what I do. 

Here’s advice for movie writers: if you put a gun in the first scene, make sure it’s fired by the end.

That’s like reading. When you read something good (e.g. something YOU would want to write) you’re going to use it in your life to make your life better.

At some point.

Maybe not tomorrow…

But eventually.


Here are five books that helped me from going broke in the last year:

 

“ELON MUSK” by Ashlee Vance

I didn’t want to read this book at first.

How come? Maybe I’m jealous of Elon Musk. He’s built four or more billion-dollar-plus companies. He’s created entire industries. He’s saving the world. He’s worth $13 billion.

But most of all, he’s the real-life model that Robert Downey Jr. used when he was preparing for the acting role of a lifetime: Iron Man.

That got me jealous.

Not only that, but the book cruised past “Choose Yourself” and my other books on the business best-sellers on Amazon.

But…I read it.

I was blown away. It’s a page-turner. When describing how Elon, in 2008-2009-2010, was getting a divorce, dealing with three explosions in a row for SpaceX (one more would have put him out of business), missing deadlines on Tesla, and more, the book reads like a thriller.

Elon Musk made about $250 million on the PayPal sale to Ebay.

But he believed in a mission. And I am always a proponent of “mission before money.”

He put his $250 million (ALL OF IT) behind three companies: Tesla, SpaceX and SolarCity, all of which were destined to change their industries and create new ones.

But at first everyone laughed. Detroit thought he was a joke.

And when everything was going bad, he was literally broke. He was sleeping on friends’ couches. Down from $250 MILLION.

I’ll let Ashlee describe what happens next. Also, I loved the book so much I called Ashlee and he came on my podcast to talk about it (coming soon).

What’s it like to have a strong vision? To execute on that vision to the point of going broke? To manage three completely different businesses at the same time?

These are a few of the things that I learned from this book.

But also, important for entrepreneurs is the notion of “building up.” Everyone wants to start with his/her billion-dollar idea. But that’s not how it happens.

Mark Cuban sold a $10 million software business and then ran a $20 million hedge fund before starting the company that made him a billionaire (he describes it on my podcast).

And Elon sold Zip2, made $22 million (but plowed that money back into what became PayPal and was left with “just” $4 million) then made $250 million and plowed that all back into his next businesses.

Every page is educational and a page-turner, which is what I like best in the books I recommend.

 

Tomorrowland by Steven Kotler

This book is perhaps the most optimistic and the most terrifying book I’ve ever read.

The future is here. Only it’s doubling every year.

So everything you can imagine that is good, will get better. Anything you can imagine that is bad, will get worse. Much worse.

Steven Kotler has been on my podcast three times.

He tells me about cameras attached to electrodes attached to the parts of a patient’s brain that have the purpose of telling the brain (when stimulated electrically) where shapes are, what colors the shapes are, where the edges are.

When the cameras and electrodes are turned on, a blind man can see. The first bionic eye was turned on: the patient’s first sight? Steven Kotler.

I asked him, “what if the cameras were not just in front of me, but everywhere, and I used my brain to tell my eyes which cameras to look out of.”

“That’s coming,” Kotler said. And the conversation continued from there.

If you want to see where the puck is going in bionics, anti-aging, synthetic biology, virtual reality, evolution, steroids and other performance enhancers (“the history of sports is actually the history of performance enhancing drugs since the very first Olympics”), and other equally amazing, hopeful, and terrifying things, read this book.

 

Moonwalking with Einstein by Josh Foer

This is one of those books in specific genre. The writer is a professional journalist researching a story. But then he becomes so absorbed in the story he TURNS INTO the story.

Josh Foer set out to write an article on the US Memory Championships. Championships for people who can memorize 10,000 digits in a row. Or people who can see 5 decks of cards laid out in front of them for 10 seconds and then repeat them back in order.

Josh then got obsessed with researching this and then using the memory techniques he learned. He ended up becoming the 2006 US Memory Champion.

He lays out the exact techniques he uses and how you and I can use them. How we can remember what we read in a book. How we can memorize 1000 digits in a row, or a deck of cards, or everyone’s names at a party, etc. As well as the relationship between learning and memory.

For instance, memory brings up some interesting philosophical questions. In an age when we can look everything up in seconds via Google, has memory become less important as an ingredient of intelligence.

The stories he researches (e.g. the actual “Rain Man”) as well as his own journey to becoming the best memory champ in the US make this a page turner as well as a guide to having a better memory.

 

“Black Box Thinking: Why Most People Never Learn From Their Mistakes – But Some Do” by Matthew Syed

Matthew Syed was a UK table tennis champion and in his book, “Bounce” explored in depth the concepts of talent versus skill and the role of the famous “10,000 hour rule.” That’s the one that says that with 10,000 hours of dedicated practice you will be among the best in the world.

Other “10,000 hour” books include “Outliers” by Malcolm Gladwell and “Mastery” by Robert Greene.

I like these types of books but I get very competitive after I read them. Whether it’s in business, or games, or even relationships (not always a good thing) I want to be the BEST! Second place is no good.

But what Syed covers in his brand new book kind of turns that on its head. He says that often “being the best” simply means avoiding all the bad things that can happen.

In case study after case study, he looks at the ways in which people fail. What type of people learn from their failures? What type of people take failure and become stronger for it.

His case studies range from airplane crashes (how many could have been preventable with the right attitude towards failure?) to David Beckham (what did Beckham specifically do as a child to become the best soccer player in the world as an adult?).

This is fascinating.

I want to get Matthew Syed on my podcast. I’m aiming straight at him.

 

“Creativity Inc.” by Ed Catmull

Imagine if you made 15 movies in a row that opened up at #1 in the box office, made a collective $10 billion, give or take, and have won award after award. Now imagine you went through a $7.8 billion merger with the leading company in animation (until your company dominated) and are still making hits.

There are so many questions:

  • How do you manage differently when you go from 10 people to 100 to 2,000?
  • How do you manage the super creative types who are responsible for such amazing profits?
  • What’s the difference between an animated movie that grosses $1 billion at the box office and another one that flops?
  • How do you handle all the business issues of financing, growing (growth has been the downfall of more businesses than I can count), and even handling the billion-dollar mergers while keeping the creativity level higher than any other company?
  • And how do you manage upwards—managing Steve Jobs so he keeps with the company mission?

Ed Catmull was president of Pixar for its entire existence and is now head of Disney animation.

In biographies of Steve Jobs there is a lot of discussion surrounding Pixar’s financial difficulties in the ‘90s and even the problems they had with Disney in the early ‘00s.

Ed Catmull could’ve written yet another boring business book about his company.

But instead, he realized that the lifeblood of his company, of ANY company, is creativity.

He describes what it is, how you cultivate it, how you manage creative types, and how you stay at such a consistently high level when every movie ups the bar for the movie that will come after it.

The book is an incredible book—not only about creativity but also about management, leadership, culture, the purpose of failure, and how they are all interconnected; to ignore that is to invite in potential failure.


Investing in your mind is the best investment that you can make.

I invest in my mind every single day…

and now I want to invest in yours. Here’s how.

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  • Ayodeji Awosika

    James I entered your contest. I read about 70 books last year and one half of one this year. I need to invest! If I lose the contest I will just buy them all at once on amazon, write a book report for each of them and send them to you on Twitter. Looking forward to next week’s Q and A. Although you didn’t answer my question on the last one!!! My second book is going to be about the life skills we need but aren’t taught in school. Who better to write the foreword than Mr Altucher! I love your work and would love to work with you one day. Cya on Thursday. Ayodeji

  • Little Phenomenon

    I read once. When they forced me as a Literature major. It’s been porn, podcasts and comedy ever since . . .thank you for the great advice though.