Jeff Bezos, one of the world’s richest men and most successful entrepreneurs, needs no introduction. As the founder of Amazon and owner of the Washington Post and aerospace giant Blue Origin, Bezos has insights on creating and managing wealth from a unique vantage point.
- View Investments Like Planting Seeds
Consider any new investment, whether in the stock market, an exchange-traded fund or a new business, is like planting a seed. All seeds need the right conditions to grow and prosper; more than anything else, they need time.
The right investments provide concrete returns, and if you’ve done your due diligence and researched your investment thoroughly before committing to it, significantly increases your wealth. But the key is patience. You can’t rush a harvest, and you can’t expect steep returns overnight.
- Carefully Make Decisions Based on Their Significance
You may have heard the phrase, “You can’t unring a bell.” The same thinking applies to financial decisions.
Bezos calls the more significant type of choice a “Type One” decision. He likens it to stepping through a one-way door. Once you go through it, there’s no going back. These decisions should be made carefully and with the input of others with relevant experience.
What Bezos calls “Type Two” decisions are less serious and reversible, like putting money in a savings account. These are more like two-way doors. Don’t spend too much time mulling these over, but make them as promptly as possible. Type Two decisions are best made by individuals or small groups with sound judgment, according to Bezos.
- See Failure as Feedback
No one runs before they walk, and you’re not likely to make the right investments or financial decisions all the time. Bezos says this is a part of the process, and you can’t achieve success without experiencing a few stumbles. Don’t expect every financial decision to work out the way you had hoped, but take comfort in the fact that you can learn from your failures and use them to better inform your future plans and goals.
- Cash Flow Is Crucial
More than anything, Bezos says to keep your eye on your cash flow. The future value of your investments or savings is determined by your cash flow, both present and in the future. The more money you generate, the more you can invest or save. If you can boost your future cash flow, you increase the long-term value of the investments you may make down the line.
- Know How To Identify a ‘Dream Business’
According to Bezos, whether you’re planning to start your own business or looking to invest in someone else’s, it’s important to know how to spot what he calls a “dream business.”
Such a business has four main characteristics — it has to have a loyal following of customers who love what the business is doing or selling, it has to have the potential to scale up significantly, it has to promise high returns on capital investments and it has to have real long-term potential. When you spot a business that ticks all of these boxes, you’re on to a winner.
- Take Risks
At the end of the road, you’re more likely to regret the things you didn’t do more than the things you did, according to Bezos. In Bezos’ view, your regrets will mostly be about missed opportunities or things left undone and it’s rare to regret something you tried but didn’t work out.
Failure usually results in lessons learned, not regrets. Bezos says this applies to life choices in general: “I’m not just talking about business. It’s like, ‘I love that person, and I never told them.’”
It’s best to go after your goals, hopes and dreams rather than not taking action and leaving yourself forever wondering, “What if?”
- The Power of Wandering
In his 2018 letter to Amazon shareholders, Bezos discussed the topic of “intuition, curiosity and the power of wandering.” He emphasized the importance of setting aside sufficient time for intuitive thought, reflection, speculation and indulging your curiosity.
This “wandering” can often lead to innovative solutions to problems, including financial decisions. This is the flipside of the “what if?” coin, and it can be a powerful tool when used correctly. In Bezos’ words: “Wandering is an essential counter-balance to efficiency. You need to employ both.”
This might surprise those familiar with Amazon’s focus on efficiency and the rapid-fire, overnight deliveries of almost any product you can imagine. But Bezos suggests that a sprinkle of inefficiency is critical to realizing success. Only through exploring and experimenting can you find innovation.
“Sometimes (often actually) in business, you know where you’re going, and when you do, you can be efficient,” Bezos wrote. “Put in place a plan and execute.”
But those periods of wandering, though they may not be as efficient, are not aimless. Decisions from that kind of speculative thinking can often be “guided — by hunch, gut, intuition, curiosity.”
When you follow those hunches and find something that pays off, Bezos says, you’ll see that it’s “worth being a little messy and tangential” to find new opportunities.
- Find Your Calling
Discovering and embracing your true passion in life — your calling — is a critical piece of advice that Bezos has consistently given to younger members of his staff, his three sons and his daughter. He shared these thoughts, among others, during the Forum on Leadership at the George W. Bush Presidential Center in 2018.
In essence, Bezos sees genuine success as being able to turn your passion into your career, and everyone has a passion in them that should be discovered and embraced for real success. In Bezos’ words: “You can have a job, or you can have a career, or you can have a calling. And if you can somehow figure out how to have a calling, you have hit the jackpot.”
- Know the Value and Cost of Originality
Bezos stepped down as Amazon’s CEO in July 2021, though he’s still Amazon’s executive chairman. In his final shareholder letter in April of that year, he emphasized the importance of preserving the unique qualities that make you original but also cautioned shareholders that maintaining that originality can have a cost.
“The fairy tale version of ‘be yourself’ is that all the pain stops as soon as you allow your distinctiveness to shine,” Bezos wrote. “That version is misleading. Being yourself is worth it, but don’t expect it to be easy or free.”
While being original can have real value, it takes continual effort to prevent the pressure of conformity from stripping you of your unique traits.
“Embrace and be realistic about how much energy it takes to maintain that distinctiveness,” Bezos said. “The world wants you to be typical — in a thousand ways.”
His parting advice included this cautionary note: “Don’t let it happen.”
- Always Think Long Term
This pairs well with the first piece of advice offered above. According to Bezos, it’s best to always keep an eye on your long-term goals.
Genuine success can’t be measured by immediate results, but rather by what you achieve over time. Every decision you make should be with your end goal in mind, and the further you look into the future, the more informed your choices will be.
This article originally appeared on GOBankingRates.com: 10 Best Money Lessons Shared by Jeff Bezos
