The amazing thing is that this is true for even the richest people – i.e. the wellbeing of the (very) rich in unequal societies is less than that of the rich (but not as rich) in more equal countries.

‘Wellbeing’ covers things like: mental illness, obesity, teenage pregnancy, violence, interpersonal trust, self-esteem, life expectancy, literacy and much more.

The reasons are complex but rooted in the deep but conflicting human needs for status and social integration. We measure our self-worth against other people and so want to do better than them. This is stoked up by marketing and media that are designed to set aspirations artificially high, and make us feel inadequate unless we have the latest material goods.

The book talks about how greater equality can be achieved. In countries such as Sweden it is mainly by using fiscal policy (e.g. taxes) whereas in Japan incomes and wealth are more evenly shared to start with.

At K&H we are heavily involved with the Employee Ownership Association and it is interesting that the book focuses on this model as a way to achieve a fairer sharing of wealth. Technology is also likely to provide a levelling off of how resources are shared, and these are very positive signs for the future.

The prizes for more equality are well worth aspiring to. For example in the UK we would have 75% fewer murders and seven weeks more holiday every year if we could get to the position of the more equal societies.

Do you agree with this book, and do you think it should influence our government’s fiscal policy?

To see all the books I have read and recommended over the last few years, see my reading list on my LinkedIn pages.

The list offers lessons for all entrepreneurs, especially the top 20.

Here are John’s four key points from this year’s list:

1.  Choose entrepreneurship as your career
Owning a business is the single best way to become rich in America. Study the top 20, and you will see that all 20 people became wealthy through their ownership of a business. There are no rock stars, bank CEOs, real estate agents, movie moguls, writers, baseball players, stockbrokers, doctors or filmmakers in the top 20.

2.  Start a technology company
If you’re going to start a business, you may want to make it a technology company. Eight of the top 20 — Bill Gates, Larry Ellison, Larry Page, Sergey Brin, Michael Dell, Steve Ballmer, Paul Allen and Jeff Bezos — are founders or co-founders of technology businesses.

There is one information publisher (Michael Bloomberg) in the top 20, three moneymen (Warren Buffett, George Soros and John Paulson), one casino operator (Sheldon Adelson) and four people who gained their wealth from retailing, all from one family and one business: Walmart. Yet almost half of the top 20 list are technology company founders. There is simply no moneymaking substitute for a business in which the marginal cost of producing each new widget is next to nothing.

3.  Start early
Entrepreneurship is one of only a handful of careers for which it doesn’t matter how old you are, where you come from or what prep school you attended — which is why, at age 37, Google founders Sergey Brin and Larry Page are richer than Sheldon Adelson, who is more than twice their age, at 77.

4.  If you inherit money, don’t blow it
A full seven of the top 20 got their money by being born lucky. Christy Walton, Jim Walton, Alice Walton and S. Robson Walton are winners of the Walmart lottery. David and Charles Koch got their start from their father, and Anne Cox Chambers’s late father founded the cable company that bears her name.

The other thing you’ll notice in scanning the top 20 list is that many of the wealthiest people in America are working hard to give their money away as fast (or faster) than they made it. Warren Buffett, Bill Gates, Larry Ellison and Michael Bloomberg have all pledged the majority of their wealth to charity, which suggests that although money may have been a motivator or score card for these entrepreneurs in their earlier years, pure moneymaking has given way to something more meaningful now, which is perhaps the biggest lesson of all embedded within the list.

See here for John’s original post on this subject. If you would like to see John present his ideas on how to build a saleable business on Tuesday 7 December 2010, click here.

At the other extreme are unbridled acquisitiveness and materialism. Which end of the scale are you? Here are the four levels of abundance that we learned about at the seminar:

Level 1: Egocentricity – You are totally focused on what you don’t have and you go all out to get it, just for the sake of having it

Level 2: Ethnocentric – You feel wealthy when the rewards you receive are in line with your efforts (a fair day’s work for a fair day’s pay)

Level 3: Worldcentric – You feel wealthy regardless of the return on your efforts

Level 4: Spiritcentric – You feel wealthy regardless of your circumstances, e.g. even in the face of pain or loss of liberty (think of Nelson Mandela and Ghandi). Here, money doesn’t matter at all.

Where would you grade yourself on this scale?

The secret to success on the stock market is quite simply:

Learn a good system and apply it with absolute discipline

Don’t let ego and greed get in the way! These are the main reasons why people lose money on the stock market – they refuse to accept small losses (ie to accept their own failure) and instead end up losing a lot more.

It is a statistical fact that women are better at making money on trading shares than men are. The reason is ego!

The systems that make all the difference are in themselves quite simple. The main ones we learned about were “channelling” where you track trends by looking at graphs for various shares to pick up on patterns, and then do some basic due diligence on the company concerned (easy with the internet now of course).

Also you must always, always using “stop losses” (selling stocks after they drop by a certain %age from the purchase price or the subsequent increased value – usually 10% to 20% maximum).

Another small but important tip that we picked up from the seminar was to do with US stock rather than UK or elsewhere. The main reasons are that the US stock market:

• is the most liquid, most freely traded market in the world
• their trading hours end at 9pm our time, so you have time after office hours to check on your stocks
• it is the world’s largest stock market, so there is so much choice
• there is no stamp duty

At the time of writing this, I have not yet traded actively (my US brokerage account is still being opened), so I hope by the time you read this I will have some success stories to pass on!   Please let me know if you would like to hear them.

This is another great example of a “system” taking away so much of the risk usually associated with investment and speculation.

The system is that you allocate your assets into categories that give you the right balance of security and growth, and allow a pre-defined amount for spending and enjoyment.

Depending on your age (years to retirement) and whether you are aggressive or conservative in your approach, a set percentage of your assets are earmarked for:

1.  Security bucket - say 40%.  This is “rainy day” cash – aim to have enough to cover 6 to 12 months living expenses.

2.  Growth bucket - say 40%, broken down into:

a.  Buy and Hold investments – 20% (property, long-term shareholdings etc)

b.  Momentum trading – 20% (trading shares, options etc)

3.  Dream bucket - say 20%. Spending money to reward yourself for your successes in the first two buckets.  For most people this is cars, homes, boats, holidays etc.

At K&H I am hoping to develop a service or perhaps run training sessions for clients to pass on some of this (and other knowledge).  Please let me know if you are interested in finding out more to help you on the path to greater wealth and financial independence.

The ways of building wealth were categorised into:

1. Paper - This includes stocks, shares, options etc- anything intangible and tradable. In other blogs I will be revealing the secret of success in trading stocks!
2. Property - eg using the power of Other People’s Money (OPM -pronounce it “opium” to get people’s attention) – borrow money on your equity growth and deposit on more properties. I will be passing on the 5 Golden Rules of property investment for 2009 in another blog posting.
3. Business - This goes without saying for us and our clients of course. I always believed, and still do after attending the Wealth Mastery course, that this is the number one way to add value to the lives of others and so it is the most socially and responsibly valuable way in which to build wealth.

There are various other way of categorising investments (eg assets allocation in “buckets”) and I will be looking at these in more detail in later blog posts.

As you might expect from anything with the Anthony Robbins name attached, the seminar was about much more than just creating wealth. The overarching message was that psychological factors play a key role. In fact, 80% of our financial success is determined by this.

Of course, once you start recognising that so much of success is determined by what is in your mind, you also discover that “wealth” is actually more of a state of mind than about material or monetary gain. The paradox of the seminar was that we then went on to find ways to make material or monetary gains!

To me, the most valuable part of the 4 days was:

• getting clarity about my number of years to “financial independence”
• discovering how this can be brought forward by using paper investments in particular

Over the next few weeks I will be posting a series of blogs with all of the key things that I learned on the Wealth Mastery course. These include:

1. Why aren’t more people wealthy?
2. The three pillars of wealth creation: Paper (stocks, shares etc), Property, Business
3. Asset allocation “buckets” – a system to spread risk
4. The secret to successfully playing the stock market
5. Which “level of abundance” are you at?
6. The key to financial abundance
7. The four things you need to achieve financial wealth
8. The 5 Golden Rules of property investment for 2009

Here are 7 reasons why you should look at the downturn in a positive light:

1. Problems or opportunities? Nearly every client I speak to in every line of business has been able to see a potential upside for their business. This creates a competitive edge for them as most business owners are too blinkered to see beyond cost cutting and working longer and longer hours IN the business.
2. Sustainability and the environment The need to save money has made us all much more careful about the resources and energy that we consume. I hope this is the wake up call that the developed world needs to save the planet and that this rubs off on the BRIC (Brazil, Russia, India, China) countries too.
3. Buy now, pay later (or never) culture My kids’ generation, as a result of their exposure to advertising on TV, internet etc, could be forgiven for thinking that it is normal for everyone to buy whatever they want on credit and simply write the debt off at a later date if you can’t afford to pay it. The idea that you have to save up to buy things seems rather quaint and old fashioned. I personally hope that credit (this sort anyway) gets even harder to obtain so that this cultural trend is reversed and my kids can grow up with a responsible attitude to spending.
4. Survival of the fittest There are too many bad businesses out there run by business owners who are classic “E-Myth victims” (as we call them in the office). During the good times they were able to do little more than survive anyway and the downturn means they are forced to close down. This is probably in the best long-term interests of the owners, who would otherwise soldier on working excessive hours and under unnecessary stress until death or retirement with little or no money.
5. The end of the “second hand” stigma The material benefits accumulated during the “boom” years will last us a long time. Most of these (houses, cars, electronic goods etc) are very durable and we will come to realise that they do not need to be replaced regularly- that was just what the marketing people made us believe to make us buy more. Just replace the words “second hand” with “recycled”! I have just signed up to the Freecycle web service and I am aiming to minimise the contents of my black wheelie bin even more in future.
6. Bargain hunting There are many great bargains out there, especially for cash buyers. This includes buying in talented new people for your business. Just don’t be tempted to buy for the sake of it (see point 5).
7. Finally, remember that it could be a lot worse Consumerism and excessive spending beyond our means was never going to be sustainable. We should be thankful that we have not come down with even more of a bang.

Those of you who are familiar with Affluenza will recognise that many of the issues above relate to the root causes of this illness. If this concept is new to you, I strongly recommend that you find out more (eg by reading the books Affluenza- The All Consuming Epidemic, which I have just read, and Your Money or Your Life, which is next on my reading list). I think there will be less Affluenza in our society going forward as a result of the recession.

Let us know if you can you think of any more positives.

This also coincides with the decision of Feisal Nahaboo (MD of the Probiz accountants network that K&H are members of), to enter into a partnership with the UK’s exclusive Heartmath provider (Heartmath is stress relief and personal performance enhancement system that uses breathing and visualisation techniques with huge scientifically proven benefits).

So, here are 7 (why is it always 7?) ways to boost your personal performance and money making capabilities, based on my own experience:

1. Eat healthy food
2. Take regular exercise.
3. Don’t eat/drink anything that just gives you a short-term boost because when the effect wares off, you will suffer a proportionate decline eg coffee, alcohol and similar stimulants and drugs.
4. Explore natural supplements- e.g. Ginkgo Biloba, Ginseng and Omega 3/DHA.
5. Meditate or use similar techniques (such as Heartmath – see above)
6. Explore alternative health remedies when you are ill, instead of just taking the pills that your GP prescribes.
7. Associate more with people who practice the above (“You are the average of the 5 people closest to you” from the Slight Edge book).

I will talk more in a later blog about my personal experience of Heartmath and some of the effects on me of making changes in the 7 areas above.

One thing that is becoming obvious as I work with clients and see who is successful and who is not, and that is the fact that “the key to success” is actually several keys. These keys are about much more than just accountancy and business advice in the traditional sense, and I believe it is crucial that we at K&H take a holistic approach to the advice we give to make sure our clients get value from us. This includes thinking about their physical and mental wellbeing and in some cases helping coach and support them in these and other areas.

Do you agree? Please tell me.

In essence this book is about how the money you make is a barometer of the value you are adding to the people round you (assuming you are accumulating your wealth “ethically”). There are lots of great ideas ion the book and what follows is based one of the more interesting sections- Seven Money Skills of extremely prosperous people. These are:

Moneyskill #1 – Value – they value each pound/dollar like a money seed and recognise that even a very small amount can grow into a fortune given time and the right investment choices

Moneyskill #2 – Control – they control their money down to the penny, eg always looking for the best value, balancing their books (eg doing bank reconciliations!), taking advantages of discounts, checking bills for errors etc

Moneyskill #3 – Save – they enjoy saving money- at least 10% of what they earn.

Moneyskill #4 – Invest – they have a systems for investing money, eg using an emergency “bucket” for 3 months’ worth of living expenses. As that bucket overflows it goes into other buckets with different levels of investment risk.

Moneyskill #5 – Earn – they have multiple steams of income, eg rental income, business profits, salary, interest, dividends.

Moneyskill #6 – Shield – they protect themselves with trusts, limited liability companies/partnership, insurances etc

Moneyskill #7 – Share it – If the above creates a rather unpleasant image, this last one will dispel it. They are also very generous, donating at least 10% of their income. Money multiplies fastest when it is divided.

If you scored yourself 1 to 10 on how well you are doing on each of these measures, what would your score be? My score was 45 out of a possible 70 (an average of 6.4 out of 10).

Please us know what your score is and whether you think that score matches your overall level of prosperity.