Start up School Lesson #2: Taking control and gaining your financial freedom
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Last week on the blog, we talked about the need to escape from the treadmill and taking control. This is something many of your related to, especially in these uncertain times.
Being an employee is of course an honourable and sometimes enjoyable way to earn a living, but the downside is that you’re restricted to earning money only 8 hours a day, 5 days a week.
In this post, I’m going to encourage you to think less like an employee and more like an entrepreneur.
A 100 years ago about 90% of us were entrepreneurs. Now that number is 10-20%. In moving from farms to factories and offices we delegated our financial freedom to others. At the same time we got a little lazy, put on a few extra pounds and lost our entrepreneurial skills.
This post is about getting off that corporate treadmill and taking responsibility for your own financial freedom and getting those entrepreneurial skills back.
Start by thinking of yourself as Me Inc or Me Ltd, where you hire out, on a temporary basis, your brain, your experience or your skills to a specific organisation in return for a ‘fee’. Stop thinking of yourself in a job, think of yourself as a contractor woring on a short term assignment.
See, you’re already starting thinking like an entrepreneur.
But until you’re in a position to obtain all your income as a full time entrepreneur, you need to focus on being able to create your own financial stability by investing 10% of your earnings in money generating opportunities.
Most entrepreneurs who own businesses don’t really own a business, they have a job. Think about it. The window cleaner, the pool guy, the gardener, the cleaner. They all have jobs. They are no more free than those stuck on the corporate treadmill.
What we are trying to create is residual income – lifetime streams of income which we don’t have to manage. We want to create income streams which flow to you whether or not you get up in the morning. We are looking at what Tim Ferriss called The 4-Hour Workweek.
If you can recognise the difference between creating a job and creating an income stream, and start with this goal in mind, you’ll be quickly able to evaluate oppportunites and focus only on those that create income streams.
If you look through the ‘Business Opportunities’ section in your Sunday paper, you’ll see lots of ads for carpet cleaning businesses, car valeting business or scratch removal. All of these are jobs which are going to sap your energy and require you’re physical presence. You’re not going to achieve your goals of spending more time with the family or spend time travelling by pesrusing these ‘opportunities’.
Unless you can figure out a way to turn these ‘jobs’ into income streams, you need to keep looking.
What kind of entrepreneur are you?
There are 4 different types of entrepreneur:
- Intrapreneur
- Extrapreneur
- Infopreneur
- Autopreneurs
An Intrapreneur is someone who is good of influencing the decisions of others, people who give advice and like to share ideas. An intrapreneur is someone who works inside an organisation, not as an employee, but as a freelancer or consultant. Examples of intrapreneurs insurance agents who get residual commissions.
An Extrapreneur is someone who enjoys creating things or entertaining others. eg a writer gets royalties as does a songwriter or app designer.
An Infopreneur is someone who is good at teaching and expalining complicated subjects easily. Infopreneurs make money selling information such as from courses or books.
An Autopreneur is someone who owns businesses which generate automatic streams of income for example landlords or investors in shares.
So, what sort of entrepreneur are you?
Related posts:
I think I’m an infoprenuer myself.
You raise a really good point here Matthew. You don’t need to make a massive shift in what you do to become financially free, you just need a change in mindset.
“success in anything is 20% mechanics and 80% psychology” Tony Robbins
Ben´s last [type] ..It’s all in the gut baby
There is very useful information in this article. Thanks for posting it Matthew.
You are right that in the last century, less people have chosen the route of freelancing. We decided to chose the contort and security of employment instead. However, This has its costs.
Best,
Eduard
Matthew Needham Reply:
August 24th, 2010 at 12:00 pm
You’re absolutely right Eduard, employment does has it’s costs. Glad you’ve found the article of interest. Thanks for commenting!
Can I be a mixture? Sorry if that sounds like having my cake and eating it but I love talking to people and helping them get unstuck, writing and all the creative fun that that entails is cool and something I couldn’t not do but I’m also working on some bits and bobs that will eventually come under your ‘infopreneur’ umbrella.
El Edwards´s last [type] ..How to smile all week- even if you live for the weekend
Matthew Needham Reply:
August 24th, 2010 at 11:52 am
Absolutely you can. The reason why I broke it up is so that in the next post we can help people find what their niche is, so that when they come to setting up their passive income generating business it is so much easier as it will play to their natural strengths!
Thanks for the comment El!
El Edwards Reply:
August 24th, 2010 at 12:00 pm
Phew. Thanks Matthew
Matthew,
You definitely made the most important point in this post. You have to think about your business from the beginning and not only do you have to think about the way the business operates, but you also need to work on your lifestyle design as well.
If you want freedom and more time, then you can’t create a business that will require you to be there all the time. If you want to travel and operate your business remotely, then you can’t operate a brick-and-mortar business… all things that need to be thought of ahead of time.
-Joshua Black
The Underdog Millionaire
Joshua Black | The Underdog Millionaire´s last [type] ..Consultative Selling- This Ain’t Your Grandma’s Close
Matthew Needham Reply:
August 25th, 2010 at 9:15 am
Absolutely Joshua. a traditional business is not what most people aspire to, but it’s what they end up with. Starting small and aiming for 10% of your regular income is a great starting point. Thanks for the comment!
[...] What type of entrepreneur are you | Big Red Tomato Company [...]
Financial Freedom is the best aspect for running either a small or big enterprises. Many times its happen that lack of finance cause we are unable to beat or fight with market competitors . But We have to also control inner financial freedom because sometimes its happen that money routed to wrong place and can results to lack of resources where we needs actually !
What you think ! Its not a advice or expert suggestion , Just I had noticed such this So I am raising here
Thanks
Tej Kohli
Tej Kohli´s last [type] ..mrtejkohli- http-moneymattersblogcom-ilfs-investment-managers-ltd- IL&FS Investment Managers Ltd Valuation and Risk Analysis
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