Knowing what sets a business owner apart from someone who is self-employed can mean the difference between spending the majority of your time at the beach, or at the office. This is not to say that one title is automatically a better business decision than the other, but identifying the risks, roles, and traits for each will help you make a more informed decision for your business strategy. When you are defining goals and setting milestones for your business plan, making a decision to be a business owner or self-employed should be included in your final draft (along with an exit strategy, but that is another discussion).
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Liberals would say that some are more fortunate than others and that people are working too hard to maintain a mundane living to find any time and/or take on the debt required to do any of the above. Conservatives will refute by saying,” Excuses, excuses!” Then liberals respond with, “Why should I have to go through all that just to earn a living?” Phew! It seems like anytime this issue is brought up, it turns into a conflict over where the line lands, marking where empathy should end and where personal responsibility should begin. I would like to share what I see from both sides of the argument, and let you decide.
We’ve explored the private sector in a kind of “wild west” small business meets small town kind of way. Then we released the kraken upon the small town and watched as feast or famine swept the little island community. Now, we analyze some of the signs that can be identified around town, and may serve as an omen of a failed economic system. As a disclaimer I am not a decorated economist, and these insights are a process of my own personal theories (mostly gathered over the years watching documentaries, reading news articles, and referring to similar events that have taken place throughout history). These theories should be taken as speculative thinking and nothing more until you have done your own homework and formed your own opinion.
A dictionary definition may have you believing that these two terms are similar, but let’s explore some of the activities/motives involved with each, as we discern some of the differences. Do you think having sales skills alone, is what will put food on the table? This may be true, but working in sales requires a lot of sweat equity to build and sustain momentum, and can leave you feeling burnt out. If you want to work smart or be long-term successful in literally any business endeavor, you will need to develop skills (or network with someone with them) in marketing. Marketing is how you get customers to come to you. Have you ever tried offering a product or service to make some extra cash when times were tough? Who do you target when trying a new business idea?
I use the term investing loosely here, because real estate wholesaling is a form of flipping assets to create a capital gain. You may have seen shows on television of accredited investors flipping houses on the market. The shows cover some of the highlights of the process involved in flipping a real estate investment for a retail profit, including the impressive before/after photos and all the contractors needed to get the job done. Wholesaling is not so glamorous or exciting, but there is far less risk involved. This is the ideal real estate investment strategy for earning experience in the market and building investment capital that could be used towards other types of real estate deals, like flipping homes (which can come with many unforeseen overhead costs).
In “How to Offer a Service without Giving up Your Time”, I explained the importance of avoiding a situation where you are stuck wearing many hats. This is common among d.e.m. (do everything myself) business individuals, and is fine as long as you value the time you invest in your business. For the majority of us entrepreneurs, who like to enjoy life on our own terms, we want to retain as much of our free time as possible. This is a job for the players that make up an entrepreneur’s entourage and personal power team (p.p.t). Consider them a band of heroes, each equipped with their own skills/power, that save your time. An intelligent entrepreneur may bust their ass bootstrapping their business during its early start-up phase, but as business grows, the entrepreneur’s team must also grow. It’s like a plant that out grows the pot it was planted in, when it was just a seed. The entourage or the p.p.t. is a natural byproduct of a successful business and/or an intelligent entrepreneur scaling to a new level. All the players of this power team have their purpose, and there will be a time and place in which you will utilize each, and prosper together.
Many of you have the opportunity to change your lifestyle, and start building momentum towards your financial goals just by making changes to your income/expenses. I am not talking about getting a second job, or even starting a business. I talk a lot about ways to create income streams, but what about increasing cash flow? Creating income can be a daunting task, that requires investment risk of one’s resources, and increasing cash flow requires discipline. Tuning your income streams and cash flow to the right frequency can make all the difference in receiving a clear signal to reaching your financial/lifestyle goals. Too much adjustment of one over the other can lead to that signal becoming fuzzy or distorted.
You have probably found yourself often pondering this question, either alone or with others. What is for dinner, or what do we want for dinner? This may very well be considered normal, because let’s be honest, what do you think about when you hear the term “home economics”? Does this bring thoughts of a cliché image of a sultry “Suzie home maker” pin-up from the 1950’s? Whether or not that is a good thing is defined by your own personal perception, but it’s completely irrelevant because all home economic skills are, is the ability to maintain the sustainability within a home. One of the biggest pit falls of reaching financial goals is a lack of home economic skills, like determining what’s for dinner. Many individuals lose more money going out to eat, or spontaneously purchasing food on a daily basis, than they do from splurging on entertainment or toys. I have developed a simple system for determining what’s for dinner, and creating practical grocery lists, so that I don’t get sucked into the dinner time financial pitfall.
One man’s trash (junk) is another man’s treasure. This is the sentiment behind the idea of turning junk metal into precious metal or value. This concept of creating value is good for the environment and good for your wallet. In part one I explained how to identify this valuable junk and shared some resources I use to scale their value. Now, I want to share some methods you can put into action today that will help you get your hands on some of this valuable junk metal. Using your scrap/junk metal earnings and reinvesting in precious metals (Platinum, Gold, Silver), is what I call turning junk metal into precious metal. The reason why I think this is a good strategy to incorporating precious metal commodities into your asset portfolio is due to the amount of hands on experience/knowledge you gain as a result of seeking junk metal. Not only will you gain the ability to see/calculate an estimated value of any “junk” you find, but also an appreciation for the intrinsic value these metals have obtained throughout the industrial age onward.
Understanding the differences between capital gains and residual income should be common knowledge for anyone, let alone an entrepreneur. Unfortunately, from elementary to high school, we are conditioned to accept capital gains as the most realistic means for making a living. Each have their pros and cons, but I want to make it very clear that it is a matter of choice as to how you make your living. I think people tend to lean towards capital gains for reasons I explained in “If Money is Too Taboo then Try Adding a Dash of Value”, where I was talking about how money is stigmatized as the root of all evil and how it should be “earned”. If you are self-employed and making a living at what you are passionate about, then I can see how that mentality could work for you. In “Entrepreneurs Create Options to Gain Control” I explain why entrepreneurs are interested in opportunities that create residual income. Residual income is about gaining control, and attaining control is about gaining freedom, but the best way to make that happen is to create options that offer value.
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