Sam Walton's Rules - Personal Finance Meets Retail

photo by jason.mundy

photo by jason.mundy

Sam Walton was a product of the Great Depression; his experiences at this young age played a large role in shaping his approach towards business as well as managing his own personal finance.

Recently, while reading the The Book of Business Wisdom by Peter Krass I came across Sam’s rules for building a successful business. As I read through each one I couldn’t help but reflect on how these same principles could be applied to one’s personal life.

Rule #1 – Commit to your business – “I think I overcame every single one of my personal shortcomings by the sheer passion I brought to my work. I don’t know if you’re born with this kind of passion, or if you can learn it. But I do know you need it.”

My thoughts – Nobody is going to care about your money more than you. You must commit to learning as much as you can about wealth management and focus your attention on making the best decisions today for the good of your financial future.

Rule #2 – Share your profits with all your associates, and treat them as partners. “In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations.”

My thoughts – Unless you are single, your spouse, children and dependants all play a part in your finances. Engage them as partners; elicit their help in making the right spending and/or investing decisions.

Rule #3 – Motivate your partners. “Set high goals, encourage competition, and then keep score.”

My thoughts – This works. We read to our kids daily from the time they were infants. We challenged them to read along with us before they could talk. As a result they were reading Harry Potter at age 4. Are they a genius? Not by a long shot! We just set high expectations and provide encouragement. The same works for savings goals.

Rule #4 – Communicate everything you possibly can to your partners. “The more they know, the more they’ll understand. The more they understand, the more they’ll care. Once they care, there’s no stopping them.”

My thoughts – I grew up in a family that kept money secrets. I grew up financially illiterate. The more you involve your spouse and kids the more empowered they will be to help achieve your mutual goals.

Rule #5 – Appreciate everything your associates do for the business. “Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free – and worth a fortune.”

My thoughts – You know how motivating it is when someone genuinely appreciates your efforts. Recognizing the efforts of your family will keep them motivated to continue making good choices.

Rule#6 – Celebrate your successes and find humor in you failures. “Don’t take yourself so seriously. Loosen up, and everyone around you will loosen up.

My thoughts – Celebration of your successes is motivational to continue. But not all decisions are going to be right. When you make a mistake, don’t dwell on it, learn from it and move on.

Rule #7 – Listen to everyone in your company and figure out ways to get them talking. “The folks on the front lines – the ones who actually talk to the customer – are the only ones who really know what’s going on out there.”

My thoughts – Two heads are better  than one. Use the combined knowledge to your advantage. Understand there are many hours your family and you are not together, their experience can be leveraged.

Rule #8 – Exceed your customer’s expectations. “Make good on all your mistakes, and don’t make excuses – apologize.”

My thoughts – Your family and you are your own customer. Laying blame and pointing fingers only creates friction in relationships. It’s a waste of time, effort and energy. If there has been a mistake or a communication error, just apologize and move forward.

Rule #9 – Control your expenses better than your competition. “You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.”

My thoughts – Spending less than you earn is the only way to build wealth over time. Unless you hit a lottery or receive an inheritance, frugalily is the only way.

Rule #10 – Swim Upstream. “Go the other way. Ignore conventional wisdom.”

My thoughts – Since the average person’s retirement savings is less than $90,000, taking a different approach is probably a good thing!



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3 comments to Sam Walton’s Rules – Personal Finance Meets Retail

  • Nice article. That list only goes to show why Sam was so successful with Wal-Mart! He was the consummate businessman. 🙂

    However, I have to disagree with your thoughts on number 2: My kids would have me in bankruptcy within a year if I took leaned on them for help in making my financial decisions! 🙂 LOL

    Seriously, there is a germ of truth to what I said, and that is why I would never consider my kids “partners” when it comes to helping me manage my personal finances.


    Len Penzo dot Com
    .-= Len Penzo´s last blog ..10 Financial Lessons We Can Learn From Baseball =-.

  • The LeanLifeCoach


    Thanks for stopping by! I was once a kid in a family that would not discuss finances. While I have difficulty blaming my parents for my poor financial management earlier in life, there is no doubt in my mind; if they had involved me more, I probably could have avoided many of my mistakes.

    As a result of my experience and my desire to see my kids manage their financial lives better we’ve been educating them about financial management since they could walk and talk. Both learned by 4 that the #1 rule is always save 20%. While they have lots of wants they temper their requests and discuss the feasibility of purchases instead of whine and cry and beg for everything they see and want.

    My 13 year old doesn’t question the 20% but burns through the rest of his money. My 9 year old has figured out on her own, if 20% is good 30-40% is better.

    Every kid is different, but yours might surprise you!

    And always keep in mind that being a partner does not mean you have an open checkbook. Everyone must still be held accountable, even the boss!