Does Jim Rohn know what he's talking about? - Person Review

Who is Jim Rohn #

An author and motivational speaker. He is known for his various self-help books (7 Strategies for Wealth & Happiness, My Philosophy For Successful Living), motivational tapes and speeches.

Was he really a millionaire? #

His claim to fame and what he proclaims each time he introduces himself is that he became a millionaire at 30. He is also open about going broke soon after. I think going broke that quickly ought to raise some questions.

Rohn made his million in a MLM company, which soon after went bust. If the company you work for goes bankrupt and you go bankrupt, it is probably because all of your assets, all of your wealth is tied up in that company. That would mean that “his million” was in company shares.

A harsh way to look at this would be to say: Profits in company shares are unrealized profits and fluctuate with the value of the company. And only when you cash out and realize those profits can you actually claim to be a millionaire. On the stock market it would be certainly seen like that. Holding a stock during it’s all-time-high doesn’t mean anything if you didn’t sell.

Company shares are illiquid (unless you work at a publicly traded company, you can’t just sell them whenever you want), so he probably couldn’t have sold, even if he wanted to.

Also don’t forget that about taxes. If you cash out your shares the government will take a (big) cut.

It’s hard to value privately held companies, so shares were likely overvalued (it was a failing business after all.)

Maybe officers at the company above him knew that the ship was going down and pushed their company shares onto him in place of compensation, effectively trading value-losing shares against hard cash that they would have otherwise paid out to him.

All of this is to say: These theories cast serious doubt on Rohn ever having been a millionaire like he claims. And even if, it would have only been on paper.

Alternative scenario #

Let’s say his money didn’t only exist on paper (i.e. in company shares), but was in his bank account.

The company he works for goes bankrupt, but his money is save because it is under his control. The only way he goes personally bankrupt now, is by having terrible money habits, which would be even worse for his credibility.

Rich from public speaking #

After the bust he got rich by holding seminars and where he (among other things) taught others how to get rich. All from a guy who wasn’t rich himself and had only been rich on paper before.

It’s the paradox of practice:

to teach wisdom that the teacher himself hasn’t successfully used in his life
– Mj DeMarco in The Millionaire Fastlane

Wouldn’t you rather take advice from somebody who has achieved, what you want to achieve? Instead of just proclaiming it?

His Mentor #

Rohn talks about all the lessons he learned from his mentor Mr. Shoaff after he started working at his company. Shoaff started multiple MLM schemes, to which Rohn contributed.

MLM is a terrible business model for all, but the people at the top. You are basically profiting from the losses and labor of the people at the bottom.

I wouldn’t want to do business like that, and I would be careful with what the people, who do do business like that, have to say.

The Positive #

I wouldn’t be writing this if Jim Rohn didn’t have something to offer. He was a great public speaker and story-teller and is fun to listen to.

What he really drilled home for me was taking control of my life’s philosophy. The Slight Edge (the author of which had the idea from Rohn) had already implanted the idea in me, but with Jim Rohn I understood it more clearly.

Conclusion #

Fun to listen to. Flexible morals. Tread with care, especially when it comes to the topic of money.