Start up School Lesson #2: Taking control and gaining your financial freedom
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:
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?