Bold, Intense, Fearless: How To Build A Millionaire Mentality

Sep 07, 2024

“Luck, knowledge, hard work-especially hard work-a man needs them all to become a millionaire. But, above all, he needs what can be called “the millionaire mentality”: that vitally aware state of mind which harnesses all of an individual's skills and intelligence to the tasks and goals of his business.”

- J. Paul Getty

At the time of his death in 1976 J. Paul Getty was reported to be the richest man in the world, but hardly anyone knew who he was.

Nearly 50 years after his death not much has changed.

But as well as his 9 billion dollar fortune, he left a raft of essays distilling decades worth of worldly wisdom.

He lays out how he and others made and kept their fortunes in his essays.

One of those essays is “The Millionaire Mentality,” where he breaks down the 4 different types of people and why some make fortunes and others don’t.

The Principal
The General
The Servant
The Agent

Read time: 9 minutes

1. The Principal

J. Paul Getty argues that most men (people) fall into one of four categories and it’s important to be able to identify them. This is especially true when it comes to hiring people.

So what’s the first category?

In the first group are those individuals who work best when they work entirely for themselves-when they own and operate their own businesses. Such men do not want to be employed by anyone. Their desire is to be completely independent. They care nothing for the security a salaried job offers. They want to create their own security and build their own futures entirely on their own. In short, they want to be their own bosses and are willing to accept the responsibilities and risk this entails.

For this, we can think of founders. The people with an idea and the bit between their teeth to make it happen. Steve Jobs, Elon Musk, Jeff Bezos and Oprah Winfrey were and still are visionaries in their respective fields. They take the risks and they reap the rewards.

Aside from episodes of being a man-child Elon Musk is hellbent on electrifying the motor industry, sending people to Mars and allowing people a platform for free speech (cough). He often hasn’t been paid for his work in terms of a salary, but instead (to the annoyance of anti-capitalists), decided to be paid in shares of his companies. This incentivises him to make his businesses successful. If it fails, so does he.

Whether the companies Musk owns would have been as successful as they are if he’d taken a cushy salary is anyone’s guess but people such as those above will move heaven and hell to get to where they want to be.

Not all people can or have the capabilities, motivation or drive to be like the above but we all have the ability to pin down our interests and make something of them. We confuse being ultra-rich with being ‘successful’ but isn’t doing what you, love first and foremost, the most important definition of success?

I think so.

2. The General

Understandably, some people won’t want the hassle of owning a business. There could also be the possibility that what you’d love to do is already being done by somebody else. These types of people fall into the next category.

Next are the men who, for any of a large number of reasons, do not want to go into business for themselves, but who achieve the best, and sometimes spectacular, results when they are employed by others and share in the profits of the business. There are many widely different types of men in this category. They range from topflight salesmen who prefer working on a commission basis-earning in proportion to what they produce, with neither floors nor ceilings on their incomes-to the finest executives in the business world.
The late Charles E. "Engine Charlie" Wilson fit into this category. Charles E. Wilson would have achieved great success had he gone into business for himself. But he preferred working for someone else-first for the Westinghouse Electric Company and then for the General Motors Corporation. Wilson's rise from an 18-cent-an-hour job to the $600,000-a-year presidency of General Motors is a classic saga of American business. Charles E. Wilson was always an employee-but he amassed millions through stock-ownership in the companies for which he worked, thus sharing in the profits he helped to create.

This is more similar to the first category than first meets the eye. Both benefit from the principal side of the principal-agent problem. Because both people want the success of the company and often benefit from it, their behaviours are geared towards the goal of the company and not themselves thus you don’t have to be a business owner to be ‘invested’ in a company and likewise to reap its rewards should it be successful.

To paraphrase the late Charlie Munger, the power of incentives (a piece of the pie) can be extremely powerful. Don’t forget that. Just look at how this turned out for Tim Cook, CEO of Apple. He was an understudy to Jobs and after his passing was handed the reigns to one of the biggest companies in the world.

3. The Servant

So you’re not the type to start a company and don’t care much for buying into somebody else’s either. Where does that leave you? Hopefully in the next category.

My third category includes individuals who want only to be salaried employees, people who are reluctant to take risks and who work best when they are employed by others and enjoy the security of a steady salary. People in this group are good, conscientious and reliable workers. They are loyal to their employers, but are content with the limited incentives of a regular paycheck and hopes for occasional raises in salary. They do not possess the initiative and independence-and, perhaps, the self-confidence and drive of individuals in the first two groups.

The workplace is littered with people who fall into this category. We’ve all met people with seemingly an annoyingly disproportionate amount of ability in a particular field/subject, but are happy just punching in and out of work every day and collecting their pay at the end of the month. After all, the world is full of risk and uncertainty.

At first, it seems that these people may be wasting their abilities in some way but it is only when you read about the last category of person you begin to understand their true value.

4. The Agent

Lastly comes the agent which J. Paul Getty summarises perfectly.

Lastly, there are those who work for others but have the same attitude toward their employers that postal clerks have toward the Post Office Department. I hasten to make clear that I intend no slight or slur against postal clerks, who work hard and well. But they are not motivated by any need or desire to produce a profit for their employer.
Postal deficits are traditional and they are met regularly by the Federal Government. I doubt very seriously if there is one postal clerk in ten who cares whether the Post Office Department makes a profit or operates at a deficit. This is perhaps, as it should be-in the Post Office Department. But, obviously, such attitudes are fatal to any business operating in a free-enterprise system.
Yet there are far too many men who hold-or would like to hold-management positions in business whose outlooks are virtually identical with those of the average postal clerk. They don't really care whether the company that employs them makes a profit or shows a loss as long as their own paychecks arrive on time.
I've encountered countless specimens-graduates of the nation's leading schools of business administration among them-who, incredibly enough, are utterly incapable of reading a balance sheet and couldn't even give an intelligent definition of what is meant by the term "profits." What ever exalted titles such men may hold, they still remain nothing more than glorified postal clerks. They feel little or no sense of responsibility to their employers or the stock holders of the company for which they work. They are interested solely in their own personal welfare. Outwardly, some of these men seem to possess the essential qualifications for management jobs. They are obviously intelligent and apparently experienced. But not even a 180 I.Q. will necessarily make an individual a good businessman or executive."

Like mould on fruit, these are the agent side of the principal-agent problem. Utterly focused on how they can benefit in every situation they also produce an air of self-righteousness and arrogance-happy to float from place to place so long as it’s within their interests.

You may say, “Isn’t it within everybody’s interest to get the most out of every situation they can?”

Yes, it is.

But when that concerns stepping on people and using them as leverage to get what they want people tend to frown on that. This problem is fraught in the investing sphere where CEOs are focused on short-term (quarterly) metrics that are to the benefit of them alone and not the shareholders.

People in this last category may feel that they have a ‘millionaire mentality’ because of their ‘hustle’ but rarely create the kind of wealth the first two categories can. They have their purpose, perhaps a founder has booted out their current CEO after years of poor performance and needs somebody to ruffle a few feathers and improve the company’s public perception but not much else.

Final Thoughts

J. Paul Getty wrote this piece over half a century ago, after nearly 6 decades of working with people that fell squarely into those four categories. There’s nothing wrong with the first three categories. The first two could also make you a small fortune. It’s all about your preference for risk, reward and life.

The problem with the fourth category is it’s based on short-term thinking and rarely is short-term thinking good for anything other than getting yourself out of a pickle.

The world is full of people who fit into the first two categories. Those generals willing to do battle for those they believe in and the loyal servants who perhaps don’t have the confidence or want to make something of themselves.

Then, much less there are those people brave enough and willing to die on their sword (or ideas).

These are the people who change the world.

Surround yourself with as many people who fall into the first two categories. The world (and your business) needs people who fall into the third category, but as a simple heuristic for you to follow in life… avoid the fourth kind as much as you can.

Until next time, Karl (The School of Knowledge).

If you enjoyed this article then please consider sharing it.

📚 I leverage book wisdom to better understand people, businesses and ideas. Join my growing community of like-minded people below💡