Calm Down Little Man. You're Broke
Most entrepreneurs who finally got a good paycheck experienced "The High." Basically, it's the feeling when you can purchase anything you need and most of what you want. There's also that humbling moment when you figure out that you're just the dusting on the tip of the iceberg. This moment arrives in the least four ways.
1. Taxes
It's a proven fact that a majority of new entrepreneurs don't calculate taxes because taxes are conditional; not a set amount. In the back of our young minds, we're thinking that taxes have nothing to do with operating expenses. Then reality hits. If we don't report the correct earnings not only can we get in trouble, but we can also ruin the chances of financing and investor opportunities because the numbers aren't adding up. Then when April comes around we're coming out of what we considered our profit share to pay taxes after the fact we spent a lot of it. So we come sliding down the ladder. It sucks paying up to half of your earnings. Get a great accountant to structure out your books and always pay ALL liabilities first even if you have to put money aside into escrow.
2. Meeting a Person with Real Money
I met a family who is so wealthy their compound interest is unidirectional. The world would have to end before they're ever literally broke. They're not famous although famous people know them. Their total amount of real estate taxes could buy a mansion every year. The maid and security staff are on-site at their house even when they're away. There's an employee time-punch on the wall for goodness sake. Here's the shocker, they're freaking nice and the kids are well mannered! So it's hard for others to hate them.
Meeting them was a huge motivation. They're a result of generational wealth, it's difficult for anyone to reach that level of wealth in a lifetime. However, we can set our heirs up to get there with the decisions that we make today.
3. Sticker Shock
About ten years ago, things moved in the right direction for my company and after liabilities were considered there was a, what I thought at the time, a decent amount of profit. Given that I am an active traveling CEO who handles most of the work hands-on, I figured it was time to purchase a company jet. Every source online at the time never disclosed the price of the aircraft so I finally contacted a dealer. He asked what I wanted and what was my budget. I said a six-passenger Cessna and my budget was around $600,000. He laughed, as he said "Ok," I laughed and said "alright", then he said you know those start at $2-million used. I said "Got-damn!" He told me to go with a single-engine for now until I'm ready. He was cool about it, he understood I was a rookie. After that phone call, I realized our company's profit was far from decent.
4. You Spent it
I have not experienced this because I learned from other's mistakes and I only talk to older, educated, "No-Men" who don't want to see me fail. I've seen Bentley cars parked on crowded streets of substandard houses with no garages to put them in. I've witnessed a guy who spends $3k per month on his leisure car payments and doesn't have his own home. There a people who had deals and situations decades ago that put six-figures in their pockets, they spent it, and walk around still bragging about how much money they had.
I'd rather never have it than to had it, then blew it. I'm known as the Humble CEO. I think of it this way, it took lots of wealthy entrepreneurs and entertainers a couple decades to get where they are. I've mastered discipline and impervious to the need for financial instant gratification. My advice as a Hardcore Entrepreneur is to think of your profits as bricks. Use those bricks to build your enterprise and don't throw them away, if plans fall through and the structure falls down, at least you still have the bricks to try again. Don't let the "B" on the front of your car prevent you from achieving the "B" in your bank account in the future. Think smart, think large.
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