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The Power of Constraints

July 22, 2016

 

Things can be pretty easy to get if you’re a billionaire. Want to fly to work in a helicopter? Done. How about live like a king in Brazil for 3 months? Done. Get all of your friends together for a yacht party? Done. All of these things have one underlying theme and that is money. If you’re a billionaire then simply paying for the things that you want to do is a matter of opening up your wallet. For the rest of us we need to get creative.

 

 

Just because you can’t afford something does not make it impossible to do. Take the famous vagabond Rolf Potts as an example. When he first started to travel around the world he barely had money for a plane ticket. Even then he figured out ways to live in 39 countries for as little as $10 a day. While traveling around he would frequently be asked about what his father did or how he made his millions but to many's surprise he was nearly broke. The application of this idea extends well beyond travel and leisurely activities. Many of the world’s greatest companies were started by capital and resource constrained founders.

 

 

Tesla’s first car was no more than a Lotus turned into an electric golf cart. The team didn’t have the luxury that multi-billion dollar car companies currently have. They didn’t have teams dedicated to researching power plants, car design, safety testing, and promotion. It was a handful of people in a small warehouse that had to bootstrap ideas and parts together to create a prototype. Since they had none of the resources that most car companies do, they had to completely rethink how to build and market a car. This enabled them to become one of two car companies that have never filed for bankruptcy. It took years of trial, error, and an almost complete collapse of the company in 2008 to build the safest, most elegant, self-driving car ever conceived.

 

 

Almost everyone knows about Warren Buffett's success in investing but when he first started out in Omaha, Nebraska he couldn't have been further off the radar. Just like with Nicolas Darvas, Buffett is removed from all the noise of Wall Street and is able to focus in on only the important information. The constraint of being away from the epicenter of investing makes it more challenging to raise capital and make a name for yourself, but Buffett turned this constraint into one of his greatest strengths. 

 


We would love to hear back from you. Tell us how you have used your own personal constraints to your advantage.

 

Want to learn more about this topic? Check out this article by James Clear

 

 

 

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