“Your largest wealth-building asset is your income. When you tie up your income, you lose.” ~ Dave Ramsey
Does it take money to make money?
Income represents money you can invest to make more money. If you tie up all your future income, you will always be living in the past. As Dave Ramsey tells his listeners every week, you cannot jump at an opportunity without the necessary cash on hand. Continue Reading…
Six weeks ago, I received an invitation to be a featured blogger at the 2010 World Business Forum, which is being held October 5th and 6th at Radio City Music Hall in New York City. Come to find out, this is an invitation-only opportunity offered to a select group of top business bloggers, and establishes a membership amongst the WBF10 Bloggers Hub.
As I read over the invite, I was uncertain if it was actually true. I expressed gratitude for kindly extending the invitation to attend the forum and asked why I was chosen to attend, as for I felt that I had yet to contribute anything of significance to the leadership community. Micheal Singer replied with: “I found your blog on someone else’s blogroll, and I took a brief look and liked what I saw. We’re looking for interesting viewpoints. And while many of our bloggers have institutional ties and recognition, etc., we also want some new voices. This is a great opportunity to stretch your voice and reach some new people if you want the opportunity. It’s that simple.” Continue Reading…
The average American millionaire realizes significantly less than 10 percent of his net worth in annual income. – Thomas J. Stanley, William D. Danko
I’ve come to terms that most people think that once you become a millionaire, all your worries will be over.
Until I had the privilege to work with some of the wealthiest professionals in the country, I too used to think the exact same thing. It wasn’t until after sitting down with and having talks over coffee about what it means to have a sense of financial freedom that I realized it’s not about how much income someone has coming in, it’s about having the wisdom to handle it. With that said, it reminds me of a talk from Randy Haugen where he said: “If you can’t manage your finances with 40k a year coming in, then you are going to be flat out dangerous if/when you have a million!”
Stanley and Danko, authors of the best selling business classic, The Millionaire Next Door, conducted a twenty-year study of how people become wealthy in America and found some surprising results. Annual income does not translate to net worth automatically. Smart entrepreneurs use their income to give their company the resources it needs to grow. The average millionaire then looks for ways to decrease income, pay lower taxes, and use what money is left over to increase net worth.
A story is related in their book about a Texan who had done so well in the business of rebuilding diesel engines that he was taking on British partners. The Brits flew to Texas to meet him and were rather taken aback by his ten-year-old car, his worn jeans, and his modest home in a lower-middle class neighborhood. In fact, on meeting him, they thought he was one of the company’s truck drivers. Then he showed them his spreadsheets, and they were blown away!
Besides hard work, accumulating wealth requires discipline and sacrifice, and that might mean living below your means. Keep your eye on the prize and don’t be influenced by keeping up with the Joneses.
There is a huge difference in knowing about life and implementing that knowledge successfully. Many people incorrectly assume that once they have graduated from college and land a well-paying job that are on their way to being wealthy. Getting a job and working is the way to start, but it’s the right job that matters. Often, it’s not the one that pays the most. Robert Kiyosaki‘s theory, explained in his book, Rich Dad, Poor Dad, is that if you wanted to own a fast-food franchise, a “Poor Dad” would tell you to get a degree in hospitality management and then work for a corporation. The “Rich Dad” would tell you to start washing dishes at your favorite restaurant. “Rich Dad” wouldn’t worry that his son was a dishwasher and not making much money, but rather he would take pride in knowing you’re gaining invaluable experience in learning every aspect of the business. This is why he says that the rich don’t always work for money: sometimes they work just for the experience.
If you ever took formal driving lessons, especially learning to drive a motorcycle, you are taught to always look for an escape route. If you come around a corner and there is a log across the road, where can you head the car or bike to escape a collision with the log. If you are driving down a two-lane highway and an oncoming car has poorly judged the distance needed to pass, where is your opening to avoid a head-on collision?
You will also need to plan an escape route in case your business doesn’t work out and you have to call it quits, at least for a while. The best way to have a financial escape route is to have a backup…a savings account or reserve of some kind, an asset you could sell if you absolutely had to, a line of credit, or even a business relationship strong enough to help you in a pinch. Look for your financial escape routes so you can follow your passion and feel more secure about taking well-thought-out business risks.
If we keep in mind that when it comes to money, most people want to play it safe and feel secure. So passion does not direct them. Fear does. Don’t be afraid to apply this theory to your own career path. As you work your way up, the ins and outs of business will unfold around you as well as many nuanced real-life situations that you won’t encounter in a classroom.
All of us can look back and think of times when we appreciated the one person on the team who just got the job done. When the company car broke down, he was the one who took control. When the projected numbers weren’t making sense, the go-to guy picked up the phone and got the clarification from the finance department.
Find these people and stack your team with them. Then when you ask them to go the extra mile, you won’t have to worry about the task getting complete. Better yet, you won’t have to do it yourself because you’ll know it will be take care of.
When you are fortunate enough to have the get-it-done people on your team, let them do what they do best. Don’t request that they work on a report about a certain thing is used, and then right before they finish, tell them what the found. People with a track record of making things happen despise doing double work. They want to find out the answers for themselves.
Let these team players act as role models for other people who insist on jumping through hoops before they take on a task. Sooner or later, they will eventually learn: it’s best just to dive right in!
It’s a common practice for people to try and cover up their weaknesses, it happens all the time–especially when it might mean getting ahead or left behind in the business world. However, despite the effort to minimize them, weaknesses tend to reveal themselves when you are under pressure. Spending all of your time managing your weaknesses is pointless. Instead, a better approach is to concentrate on your strengths.
Building on your strengths makes sense because, ultimately, it will pave the way for a less stressful way to achieving your goals. First, you will have a proven track record that demonstrates the skills you already do well. Second, playing to your strengths allows you to experiment within your comfort zone. When trying to branch out and expand your business, it helps to know that you can build on what you have already done. Third, by relying on your strengths, you’ll find the inspiration to set attainable goals. By seeking more challenges, your leadership will inspire others to do the same.
When you think about it, how are you currently looking at others?
There are some good ideas…and some bad ideas. Ken Hakuta should know, as for he is known as “Dr. Fad” and made quite the name for himself when he introduced the Wacky Wall Walker to the U.S. market. It became one of the best-selling fad toys of all time. Hakuta earned over $20 million while selling 250 million rubber spiders over a period of just six years!
Ken Hakuta can also attest that what may seem like a bad idea to somebody may be viewed as a great idea to somebody else. Everybody knows of an idea or concept that they’ve heard about and thought was not going to go anywhere (heck, look at Twitter!) and then, wham! – several years later the organization not only succeeded, but the idea spawned other related ideas and the business grew exponentially. Think of the Pet Rock, Chia Pet, and any other of stress management desk toy.
Always be on the lookout for new ideas that appeal to the masses. As you go about your daily life, look through a different worldview at the jobs people are doing around you. Are there ways we can be doing these jobs more easily? Are there certain aspects of an industry that you find fascinating? Do you find yourself attracted to businesses and markets that help people? Are you seeing something that will make people’s lives easier? By answering these questions, you might be able to brainstorm and think of something unique that the market will respond to in a very positive way.
I had recently chatted with a Recruitment Director for one of the nation’s largest Information Technology firms. Four months each year she visits college campuses to recruit graduating seniors for her company’s junior executive training program. The tenor of her remarks indicated she was discouraged about the attitudes of many people she talked with.
“Most days I interview between 8 and 12 college seniors, all in the upper third of their class, all at least mildly interested in coming with us. One of the main things we want to determine in the screening interview is the individual’s motivation.
We want to find out if he or she is the kind of person who can, in a few years, direct major projects, manage a branch office, or in some other way make a really substantial contribution to the company. “I must say I’m not too pleased with the personal objectives of most of those I talk with. You’d be surprised,” she went on, “how many 22-year-olds are more interested in our retirement plan than in anything else we have to offer. A second favorite question is ‘Will I move around a lot?’ Most of them seem to define the word success as synonymous with security. Can we risk turning our company over to people like that? “The thing I can’t understand is why should young people these days be so ultra-conservative, so narrow in their view of the future? Every day there are more signs of expanding opportunity. This country is making record progress in scientific and technological development. Our population is gaining rapidly. If there ever was a time to be bullish about America, it’s now.” The tendency for so many people to think small means there is much less competition than you think for a very rewarding career.
Where success is concerned, people are not measured in inches, or pounds, or college degrees, or family background; they are measure by the size of their thinking. How big do we think determines the size of our accomplishments.
Now, let’s see how we can enlarge our thinking.
Ever ask yourself, “What is my greatest weakness?” Probably the greatest human weakness is self-deprecation that is selling oneself short. Self-deprecation shows through in countless ways.
John sees a job advertisement in the paper; it’s exactly what he would like. But he does nothing about it because he thinks “I’m not good enough for that job, so why bother.” Or Jim wants a date with Joan, but he doesn’t call her because he thinks he wouldn’t rate with her. Tom feels Mr. Richards would be a very good prospect for his product, but Tom doesn’t call. He feels Mr. Richards is too big to see him. Pete is filling out a job application form. One question asks, “What beginning salary do you expect?” Pete puts down a modest figure because he feels he really isn’t worth the bigger sum that he would like to earn.
Philosophers for thousands of years have issued good advice: Know Thyself. But most people, it seems, interpret this suggestion to mean Know Only Thy Negative Self. Most self-evaluation consists of making long mental lists of one’s faults, shortcomings, inadequacies. Its well to know our inabilities, for this shows us areas in which we can improve. But if we only know our negative characteristics we’re in a mess. So, look at any challenge as an opportunity to grow and move forward.
What have you experienced yesterday that is helping you today? How is it helping others?
