Is Your Mindset Wealthy or Poor?
Is Your Mindset Wealthy or Poor?
Let’s talk time and money. One of my favorite Warren Buffet quotes is: “The poor work for money, the wealthy work for time.” It serves as my constant reminder to leverage my time, delegate, handoff, share ideas, and communicate with my team. I might add that Mr. Buffet owns 63 major corporations that he never sets foot in. He might speak to the CEOs once a year. This quote also ties into the “Time Value of Money”.
A Crash Course in a Winning Mindset
I have met numerous clients who sort of understand the importance of it. It remains a foundational principle of business ownership, so here is a short crash course:
Working for an employer is a job and it requires you to work in order to get paid. Businesses are investments, not jobs, and have different rules. Businesses are expected to produce a profitable return to their owners, which includes the original money invested plus the interest payments or profits over and above the original money you invested or loaned the project. Another big fundamental characteristic of businesses is that you don’t have to go to work if you don’t want to. It’s your choice.
Earlier, I said Warren Buffet owns 63 major companies and doesn’t work in any of them. He hires employees to run them for him. Thousands of business owners choose to do the same thing. Any size business can be set up to run itself without you, yet thousands of business owners don’t know this. Thousands of owners choose to work in their business because they enjoy it. The choice is yours. Let’s get back to learning how to make good business decisions with your money and time.
Principle of Time and Money
If you invested money to start your own business, you must have expectations of when you will be paid back (just like a bank).
- How soon (time) will you get your original money back? 3-5 years is expected.
- How much profit or increase in value will you make from investing your money in the business?
- Will it be equal to or greater than a very safe stock market investment, for example, 6-8%?
It is critical that you understand how long it takes for your money to double! You won’t live forever and someday you will need money to retire. (Read the rule of 72.) By comparison, you could purchase shares of a stock (business ownership)… say $1,000 for 1000 shares of Netflix (in 2003). Without you lifting a finger, working at Netflix or anywhere else, today you would have earned $500,000. It’s just as easy to learn about the stock market as it is to drive a car. It’s not complicated—it just requires discipline. If you noticed in the Netflix example, the increasing stock price (appreciation), goes up without you working—it is basically free money. I’ll say it again: It’s free money. All you did was put the time in to learn why and how the stock market works.
Again I repeat, a business is an investment, not a job. Therefore, you must compare the value of personal time and money paid into your business to other investments that may require little or no personal “labor” or working hours from you.
Critical business questions to consider:
1. I didn’t know my employees could run my business! How do I set this up?
2. I like working in my business, so how do I make it MUCH more profitable?
3. I don’t have time; Can someone help me with these business decisions?
4. Should I learn the basics of business investing if it’s as easy as driving a car?
I hope you win the day!
About the Author
Hi, I’m John Blakeney!
Since 1999, I’ve dedicated my life to building high-performing people and companies. I’ve been hired to advise hundreds of CEOs and I’ve doubled revenue for most of my clients. I have hired and trained thousands of employees in leadership, and on how to be profitable business decision-makers. Clients include small businesses, mid-market, and Fortune 500 Companies. I’m an active keynote speaker on leadership and a university educator on innovation. For fun, some friends and I brew IPAs with attitude. My wife and I are parents to three adult children.