… more than you think.
This caused me to pause for a moment as I turned this thought over in my head:
This resonates with my own experience and via my friends and professional colleagues who have continued to grow their wealth faster than their ability to spend.
Which pathway / financial “strategy” fits you more?
- I try to earn more money than I spend, each and every year.
- I can’t seem to get my finances figured out, not matter what I try.
The reality is that most folks , when they are completely honest with themselves, fall into one of the two groups above. I’m in the first bucket, 100%. But, let me clarify and be even more specific:
- Our family’s capital-b “Budget” has become less stringent and precise as I’ve been able to increase my total yearly earning power through increasing my base compensation / salary as well as investments in a growing portfolio of assets and securities. Now, my wife and I do financial planning per event / as-needed since we have our baselines adequately covered.
- My startups budget is tight, rigorous, and I review it every single month with my accounting and contract finance team (we don’t need a full-time role here at the moment). This is the worst part of my job but since I know that I’m more naturally inclined to try to “earn my way out” (i.e. venture capital!) of having to budget. But, you can’t do this with a business and you need clean and consistent financial hygiene.
When I was in my 20’s I desperately needed a budget to give me frame, focus, and to teach me the fundamentals of cash-flow management and how to think properly about money; building a healthy relationship with money is the most important “relationship” that you build in your 20’s! Your 30’s are designed to have you test-drive your financial playbooks to see what’s missing and to give you a real opportunity to make them better.
One of the more important reminders for entrepreneurs and founders is this: You will naturally run your startup (and professional life) like you run your personal life. This is obvious for those who’ve done this before but a bit of a surprise for folks who are building their first venture.
This is why I challenge all founders to make sure that their own “financial homes” are stable and secure; meaning, that if they don’t know how to relate to money as an independent individual and adult then it is unlikely they will know what to do with a ton of money when they raise or start earning revenue.
And that’ll kill your business and startup before you’ve even launched; trust me, I know because I’ve sacrificed my own baby(ies) because I was simply ill-equipped and had a desperately-immature relationship with money.