Posted in Money on February 27th, 2017
Genghis Khan built one of the largest empires in human history, while overcoming the aristocratic system he was born in and facing adversity from outside attacks and invasions. No man in human history ever conquered as much as he did, nor was as fear as he was (including Alexander the Great). In this article, we look at four financial lessons we can learn from Genghis Khan.
1. Destiny can be changed. Genghis Khan – also referred to as Temujin – lived grew up in a region where every clan served its own interest with the aristocratic clans carrying significant resources and advantages over the other clans. In his culture, there was no meritocracy and thus Temujin’s destiny was failure. Yet he defied this by becoming one of the most successful leaders in human history while also building one of the largest empires in human history. Temujin used his disadvantage to his advantage: since he was destined to be a failure by his society’s customs, he violated all of them by annihilating the aristocracy and promoting his own system as he rose to power – his system being a meritocracy.
Modern money advice often seeks rationalizations for failure or expressing praise considering one’s disadvantaged background. While these may feel good for some readers, listeners or viewers, the reality is that these are the “Sham, Flattery and Deception” that John D. Rockefeller warned us about – ultimately the strongest disadvantage means that we have no loyalty to the system which we were raised in. Are you from poverty? Good, because you will have no loyalty to the existing rich and you can treat them like Temujin treated the aristocracy. In addition, if you have a strong disadvantage according to your culture, you can focus solely on what obtains results and stop wasting time doing what others tell you – their rules only work for them, what works for you?
2. Money goes to those who finish what they start. Temujin said, “There is nothing good in anything until it’s finished.” Nothing. Temujin lived this philosophy by finishing what he started, even if he later let it go if he didn’t see benefits. I chuckle when I hear people say, “I’m an idea person” even though they’ve never actually built their idea. Idea people are weak and pathetic. Finishers are strong. Finish what you start, even if you later choose to get rid of it. You will see yourself differently when you finish what you start and you will also learn to recognize others who do (a huge advantage if you’re an investor).
In writing for various sites and teaching courses, here are some patterns I’ve seen over the years with readers and students:
3. Wealth is behavior. Temujin started the first meritocracy in Mongolian history. The meritocracy is built upon the idea that behavior leads everything – especially wealth. Wealth comes in many forms, though it’s often promoted as money or capital in today’s world; in the past, wealth could have been physical power, military power, etc. In the Mongolian Empire, wealth was anything that made the Mongolian Empire more powerful and dominant. Rather than promote people on the basis of blood lines (aristocracy), Temujin promoted people who were skilled and excelled at their skill. This resulted in people spending more time being the best they could be at their skill; cronyism and “knowing-the-right-person”, which are common in aristocracies, did nothing in Temujin’s day.
Make sure that the people in your life excel at what they do; measure them by their character, which is reflected in their behavior (for an example, what can you see in this behavior?). I spent many years on Wall Street and realized that most were terrible traders who simply relied on cronyism to succeed. I did meet a few people who were worth my time, but the simple truth is that most people will never be, especially in a system that promotes aristocratic thinking over meritocratic thinking (which is becoming more common in the United States). Never forget Proverbs 13:20.
In addition to promoting a system that rewarded behavior, Temujin also shows us excellent behavior:
Make sure that your net worth is your behavior. Let others talk about their stocks, bonds and bitcoin – all of these could cease tomorrow, and at some point might. Yet, your behavior is always under your control and it will be wealth in every age and wealth that cannot be taxed, confiscated, or restricted by capital controls. And money that does not represent good behavior is not money, it’s fraud and it will eventually meet a fraudulent end. This will always be true.
4. Success starts with a vision. Temujin warned his children that a man without a vision would become a slave – he would become seduced by fast horses, beautiful women and attractive clothing. Temujin’s warning to his children reminds me of what Niccolò Machiavelli observed in the History of Florence:
They were freer than their forefathers in dress and living, and spent more in other kinds of excesses, consuming their time and money in idleness, gaming, and women; their chief aim was to appear well dressed and to speak with wit and acuteness, whilst he who could wound others the most cleverly was thought the wisest.
Machiavelli observes in Florence exactly what Temujin warns his children against and we see this same pattern today – look at what the Millennial generation and the Baby Boom generation has done with the prosperity from the work of those who came before them? They’ve completely squandered it – prosperity destroys fools. The reason for this like Temujin warns and Machiavelli observes is that these people lack a vision, so they waste their time in idleness. They travel. They crack jokes. They game others. They complain. They wander. They have absolutely no vision and their life is a reflection of their lack of vision.
It should be of note that the desire of nice things or partners is not wrong or evil; after all, Temujin is well-known to be the father of many offspring (easily in the thousands) and he himself had fast horses and attractive clothes. What Temujin understood was that these are not the vision; they come and go in life, but they are not the objective that we pursue.
One humorous observation about the Mongolian Empire is that Temujin’s family failed to follow his advice and the Mongolian Empire – while one of the largest in human history – also collapsed quickly. Unlike the Roman Era, the Mongolian Empire was a quick start, quick end empire. This was not the fault of Temujin, however, but an example of how the work and diligence of one generation is squandered by the next. Prosperity destroys fools.