If you study financial success books on investments, you will likely come across the terminology “OPM.” It stands for other people’s money. The idea is to start with nothing, but use other people’s money to become fabulously wealthy. Widely used in the real estate world, this concept of financial leverage and OPM is often hyped on infomercials.
How does it work?
You want to buy a rental property, but you don’t have the money. You put down a small amount and finance the rest from the bank. Let’s say you buy a house for $100,000, but you only put down $5,000. When the price goes up to $150,000 and you sell the house, in addition to the rental income you earned, you pocket $50,000. In simple terms, the magic of OPM is that you made $50,000, but you only used $5,000 of your own money (if anything at all!). That’s an extraordinary return on your investment. Obviously, given the housing downturn, many people are realizing that the $100,000 home doesn’t necessarily become $150,000 and could end up at $50,000. That has been a painful lesson to many, but the OPM concept is still a valid approach.
My entire life has been spent studying a different type of leverage—one leveraging not other people’s money, but something much more valuable. And its value is always there and cannot go down. In fact, the more it is used, the more it goes up in value.
Erin Morgenstern debuted as an author last year with a most creative book, The Night Circus (it’s also one of my favorite book covers of 2011). In addition to receiving numerous rave reviews, the book was recently awarded the Alex Award by the ALA, which is given to the top ten adult books that also appeal to young adults.
As I talked with Erin about her achievement, I was struck by three success themes:
Catherine the Great was by any definition a political success story. Baptized Sophia Augusta Frederica, she rose from a young German girl to later take the name of Catherine II and become the most powerful woman in the world. Moving to Russia at just fourteen years old, with no knowledge of the language and no hereditary claim to the throne, she later ascended to power in a coup. The people of Russia loved her and she became one of the greatest benevolent despots ever known.
How she achieved such power is a fascinating study in leadership whether you agree with her methods or not. Robert K. Massie now chronicles her extraordinary life in his new book, Catherine the Great. Massie is a superlative author, historian and biographer. He won the Pulitzer Prize for Peter the Great: His Life and World. His many books are loved for his ability to bring his characters to life.
What were some of the personal qualities serving Catherine’s goals?
The expression “moving the needle” first appeared in England during the industrial revolution. The reference was to gauges on steam engines. During World War II, it became a more common term in reference to aviation gauges. In business today it’s synonymous with making progress.
I’ve seen three major types of people in business. One person can describe the needle, the other can move the needle, and rarely someone can do both. What do I mean?
Diana Gabaldon is the bestselling author of the Outlander series and the Lord John novels. (Outlander fans, she is currently working on the eighth of the series Written in My Own Heart’s Blood. The latest Lord John novel was recently released.) She is a fascinating person with a diverse background. I’ve known Diana for a few years and, when I visited Scottsdale, I interviewed her about her insights on her successful writing career. I quickly realized that some of her suggestions are applicable not just for authors, but also for all of us. Here are a few success tips that I gleaned from Diana Gabaldon: