How Do You Get Rich?

Readers of this column know I am a proud family man. My twin grandsons are entering college in the fall and we could not be more delighted. They are an endless source of pride and an equally great source of stories. Recently, one of my grandsons asked me, “Grandpa, how do you get rich?” I presume he’s been thinking about his path in life and, as he is entering university, he’s been giving some thought to his career and direction.

I didn’t hesitate in my answer: “Well,” I said, “It depends on your definition of ‘rich.’ You can be rich with your relationship with your wife; you can be rich with your family. You can be rich with your friends and community…These are some of the things I value most.”

I knew that’s not what he was asking about, but it is an important point, and there are things a person needs beyond monetary wealth to be happy and successful in life. In fact, these very things help to build financial wealth. I took the opportunity to share this with my grandson. “Rich isn’t just money,” I said, “And besides, who is rich in whose eyes? There will always be someone with more money than you and if you chase money with greed, you may not end up happy or rich.”

When we first got started, my wife made $5,000 a year as a teacher, and I was hustling for less than $25,000/year. I was fortunate because I had a great mentor in my father and he taught me to use my centers of influence to help build my business. In fact, my father was one of my biggest centers of influence. He was a manufacturer in New York’s garment district. I stopped in at his office for lunch every day (because I couldn’t afford lunch myself) and he would introduce me to people he worked with. Eventually, I became a specialist in that industry: I could talk about textiles and trimmings and I learned the risks in that business and I picked up a lot of accounts that way.

I joined organizations, built relationships, and I was always prospecting. If I went to the dry cleaner, I was working with the dry cleaner. But, my father taught me to be careful, to not always be selling—rather, to always be building my network.

When I entered the Army, I was in a unit that had many accountants and attorneys. One of the accountants became a close friend and he began his practice when I was starting mine. We would recommend various accounts to each other.

Another center of influence I had was the friends I made in college; and friends with whom I went to summer camp. I didn’t chase people, but I let them know what I was doing and they knew I wanted to help them. One of my fraternity brothers got a job out of school at a major advertising firm. We would get together once a week, because his agency was located in my building. He would introduce me to various people with whom he worked. Before you knew it, I had a book of advertising executives’ homeowners and auto policies. One of them became the biggest agency owner in the country and before I knew it, I was the agent—all from a simple auto policy.

Speaking of accountants and attorneys, a friend of mine (who happened to become president of Michigan State) had a little black book of wisdom, and shared his tips about business through the book. One of his best pieces of advice was: “Be kind to the accountants and attorneys, for they will inherit the earth.” Truer words were never said; I’ve gotten many referrals from accountant and attorney friends.

Once my business was running, I learned that attorneys and accountants, like insurance agents, have to take continuing education. But, they have the option to identify their own experts and specialists to teach the courses. I got approved to teach these courses and I went to my friends’ firms to discuss Workers Compensation audits; I would customize my information—so for attorney friends who served the garment industry, I could talk about those risks and related contracts. And I would receive referrals. I would get clients from the attorneys and by doing so, I built further expertise.

My own attorney asked me to join him in volunteering for a charity. He said, “You will meet people who can become clients,” but he said, “Don’t chase them away.” I built my business further by doing good for others. At meetings, people knew what I did and they saw that I was interested in helping them and the community. When they needed to work with someone they trusted for insurance, they thought of me.

My father and my friends taught me the importance of working with your centers of influence, not necessarily selling, but my dad also taught me to always look forward. He was a wonderful businessman and my idol. So, of course, I called him to tell him when I got a big new account. He said, “That’s good, but also bad.”  I was surprised and asked, “How is that bad?” He said, “Now you have to replace that big prospect with five new prospects. You always have to have prospects in the pipeline—so your business doesn’t run dry.”

He was right again. There’s a tenet in business: Eighty percent of your new business will come from your existing clients. When I started out in the life insurance business, I would go back to my clients every year, and as their families grew, their needs increased. As I went into the property/casualty business, I continued this practice. I would have an annual review for each existing client and sell coverages because they were growing, or their worth and property was increasing in value. The annual review is essential. Not only is it doing the right thing for the insured, it also helps protect you, as an agent, from E&O exposures.

And as I learned from my father, whenever I finished an annual review, I would not leave the room without a referral for one of my client’s friends, competitors or family members. How many of us forgo that annual review or leave it up to a CSR? There was a period in my early days when if you asked my clients who their insurance company was, they would say, “Steve Ruchman.” I was the face for the companies and my clients knew they could call me for all their needs. That’s a good thing. It’s not an inconvenience, it’s an opportunity.

I’m excited for my grandsons as they embark on their education and careers. I know they will make many great friends and important contacts at school and I hope they remember the importance of the relationships they make along the way. These are the things that have made me rich.