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What Henry Ford Knew That Many CEOs Have Forgotten

Henry FordWe all know a lot about Henry Ford. But the two of us didn’t know much about Herbert Casson until recently. Now we have a growing fascination.

Casson began his career as a minister and ended it as an author. He was a Methodist turned socialist turned capitalist. He was one of the people featured in the book, 50 Key Figures in Management.

A capitalist with a better way to get rich

It was what he said about Henry Ford that caught our attention. Here are a few excerpts, written as a contemporary of Ford’s:

“Judging by results, Henry Ford is the most successful manufacturer in the world. He pays the highest wages. He makes the highest profits. He sells the cheapest goods.

Henry Ford is a complete answer to the silly Marxian theory that a capitalist can only make money by robbing his employees or the public.

Henry Ford robs nobody. He is not an exploiter of the proletariat.

He is a multi-millionaire, and every penny of his money is clean.

His enormous profits are only a part of what he saves the public; and he pays his workers far more than they could make if they were on their own.

Henry Ford is a capitalist, and he shows all capitalists a better way of getting rich.

Scoffing at Ford

After telling the story of Ford’s fascinating journey from farmer to entrepreneur, Casson continued:

“We may scoff at him if we like—if we are foolish enough; but it seems to me that he is the one who has the joke on the rest of us.

Henry Ford knows how. He has solved his business problems. He has shown us the one right way to handle men and produce goods and make profits without making enemies.

It would be better for all of us if we STUDIED Ford more and scoffed at him less. The more I find out about him the more I am impressed with his ability and his sense.

What the world needs is more Henry Fords; that is the truth, whether we like it or not.

If we had 1,000 Fords, we would have high wages, high profits, low prices and no labor troubles. We would have peace and prosperity.”

Ford and his employees

He goes on to discuss how Ford treated his employees:

Take, for instance, Ford’s methods as an EMPLOYER. In this respect he is most peculiar. He has followed a most unusual course, and he has made a great success of it.

The fact is, that Henry Ford seems to regard himself as a LABOR LEADER rather than an employer.

He gives his men MORE than they ask.

He gives them better working conditions than they had ever thought of.

He watches over them and protects them.

He has made his men the best-paid and most contented workers the world has ever seen.

He was one of the few leaders to hire convicts and people with disabilities. He treated all of his employees like people. Casson concludes:

“He has stopped the war between the workers and the management. He has established peace and goodwill.

He has shown every other employer what can be done.”

Entrepreneurial CEOs today can learn a lot from Ford. You can have it all. It just takes some ingenuity which begins with a mutual trust between you and your people. To paraphrase Ford, your people might become good customers, too…if you treat them well.

Source: Tips on Leadership or the Life Stories of Twenty Five Leaders

This book was written by Casson in 1929 and republished in 2003. We found it riveting so we highly recommend it to you.

Image in this post from sciencecontrol.com

How the Rich Make Money

golden_eggs.jpgThe Federal Reserve recently published some new wealth data [PDF]. They looked at levels of net worth and the income associated with each. They defined net worth as total assets (including a primary residence) minus any money owed.

You need a net worth of over $8 million to make the top 1%, $2 million gets you in the top 5% and it takes about $900,000 to place yourself in the top 10%.

So those are your targets if life on your own terms means being in the top 10% or above.

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Making more doesn’t mean having more

This report also looked at share of total wealth. As it turns out, the richest of the rich – the top 1% – didn’t get richer. They still held approximately one-third of the country’s total wealth in 2007, the same as 1995.

However, their share of income was up significantly – from 17% in 1997 to 22% in 2007.

The wealthiest people in our country saw a bigg increase in share of income, but their share of net worth didn’t go up. Does that mean rich people got caught up in the “spend, spend, spend” economy? Possibly.

We often think, “If I could just make a little more money.” This study offers further proof that making more doesn’t necessarily translate into having more – even for the richest among us!

Make do, then make more

The crucial thing – the starting point – is to figure out how to make do with what we already have. Then when we make more, we’ll have more because we manage it all better.

We can enjoy some of it now and invest the rest for our future – for the life we dream of living.

How the rich make money

As might be expected, the average person gets most of their income from salaries and wages. As we move to the top 5%, we see that a larger share of income comes from business ownership and investment real estate.

It really kicks in for the top 1%. Plus they have built up enough assets to get a significant boost from selling those assets for a profit. It’s Economics 101 – buy low and sell high.

But it’s no panacea

We’ve recently seen people losing money in business and real estate. Like most things, it’s no panacea. It’s risky. But if you aren’t trying to get rich quick, you can greatly improve your odds.

The best advice

We also found it revealing that this study showed that the bottom 50% lost money holding assets and from the ownership of businesses and real estate.

The rich made a lot. The bottom half lost money. What do the rich know?

Before you jump into investing in a business or real estate, educate yourself. Get advice from someone who’s actually succeeded at it. If they’ll mentor you, that’s great. If they charge you for it, it will be worth every penny.

You’ll get where you want to be faster by learning from people who have done it rather than trying to learn it on your own.

So if life on your own terms means building wealth, get started creating multiple streams of income today – even if it’s just part-time!

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Thanks for reading our post today. Until next time, here’s to your bigg success!

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(Image in today's post by barunpatro)