Let me describe a situation that I think will be familiar to most entrepreneurs who are actively growing their businesses.
Right now, you're working with clients who are at a certain level of business ability. But once upon a time, you were working with people at a lower level and at a lower price point. From that point, you grew and you expanded your horizons to bigger opportunities, and you moved on from your first clients.
Now, meanwhile, there's another group of people who don't want to do business with you yet, because you're not at the level that they want to be served at. But as you continue to evolve, you might reach a point where they do want to do business with you. These things tend to flow naturally.
How Can You Serve People at All Levels?
I encourage you to consider, as you evolve, that you might actually still...
If you had a magic wand that let you could schedule when and how you got your own raises, what would you do with that?
Imagine if you could schedule increases to your income on a regular basis. What if I told you this is possible, and all you have to do is get a little more focused and maybe be a little better at what you do?
Scheduling Your Raises as an Entrepreneur
A hugely important thing that all entrepreneurs think about is how to make enough income. For most of us, we have some work that's steadier work but maybe not as well paid, and we have other work that’s not as steady or reliable, but that might be a bigger opportunity in terms of income.
If you do the math using hourly income, there might be some projects where we can make our base rate of x, whatever x is: $10 an hour, $25 an hour, $100 an hour. Then we have some 2x work, and we might have some 4x work.
Who needs more of your time, more of your energy, and more of your attention?
Is it your partner? Does that person need more of your love, more of your ability to connect with them, and more of your presence?
Is it your children? Do they need you to be more present when they come home from school, so you can listen to them, and hear what's actually going on in their day? When kids come home from school, there's a 15 to 30 minute window where they'll actually tell you what's going on, and then after that, if you ask them, they'll just say, "Oh I'm fine, everything's good." Not because they've shut down, just because they've moved on to something else.
Is it maybe a friend who could use your help? A friend who just needs a little support? Who could use your encouragement and your ear, to be able to listen to them, and to hear what's going on with them?
Are you going to let me make you angry if it will help you save some money?
I want you to think about something: How much money is your credit card or your loan interest debt costing you every month? I’m not just talking about the financial cost, which you might be aware of, but also the time cost… What is that debt costing you in terms of hours?
Credit Card Debt is Eating Your Free Time!
The banking industry is an industry that makes its profit from arbitrage: Lending one person money for a certain amount and making a higher percentage on that than what they pay out to somebody who saves. For example, they might charge someone who borrows money 5%, but they only pay out 2% to someone who saves, and then that 3% difference is where they make a profit.
Then there are credit cards. If you look at just about any bank, they market their credit cards a little like candy or even drugs. If you...
What's the difference between a $75,000 car and a $25,000 car?
You know what the difference is? In a lot of cases the difference is simply 3x as many hours worked to afford it.
If you really love cars, fine: we all have our hobbies. But very often, I find people who aren't really that into cars and they just buy the more expensive car because of its brand name, or because they felt like they should. If you ask them why, they often can’t tell you.
I bought a Honda CRV a few years ago. It kind of made me laugh because it's about a $25,000 vehicle. And I once saw a BMW which looked really similar, and it was almost the exact same color blue, so I went up to that car with my clicker and thought it was my car!
There really wasn't that big of a difference between my $25,000 car and this car which probably cost more like $75,000.
When I was younger, I probably would have noticed the difference more, but...
Today I want to talk about the idea of being house poor.
This isn’t about people who don’t have a nice home, or a home at all: that’s another story. This is about people who have a nice home, but one that’s so expensive that they spend their whole time working to pay for the home, and have very little time to actually enjoy it. In fact, they probably don’t really own it: the bank owns it.
I remember when I was just out of college and had started working, I just took my stuff from my parent's house and I moved it to this apartment because I wanted my freedom. But after a few months, I became kind of dissatisfied, because I was hardly spending any time in the apartment.
I was outside in the world, enjoying life at the beach, hanging out with friends, and I realized that I really didn't need a two-bedroom apartment: a one-bedroom apartment would be plenty. Sure, the extra room...
If someone younger than you who you cared about came to you for advice, and they asked you, “What is the best way to get a guaranteed return on investment?” – What would you tell them?
Would you tell them the stock market, because it's been good over the long run? Would you say mutual funds, because they're diversified? Would you say bonds or certificates of deposit? How would you respond to that?
Guaranteed Returns on Investment
As I've worked with clients over the years in their businesses and looked at the risks they take on team members, advertising, new projects or research and development, the only things I’ve found that is a guaranteed return on investment are:
Investing in yourself
Investing in life experiences
Investing in your most treasured relationships.
Those 3 things seem to be just about guaranteed that you're going to get a positive return on your investment.
If you were going to start a rock band, and you wanted to be successful and sell number 1 hits and be awesome, how would you do that?
Becoming a Rockstar
There are really two approaches to becoming a rockstar, and they're very related to how we do business.
The first approach is to want to do things right away. These people want to take an approach that's like this:
“I'm going to be a rock star, so I'm going to play gigs, I'm going to play events 6 nights a week and I'm going to work really hard. I'm going to hustle, I'm going to grind, and I'm going to do this for a year. If that doesn't work out, I'll probably run out of money, so I guess I won't be a rock star.”
And that method does work sometimes for some people, and if it does, it can be awesome. You hear about people who become an overnight success and they work so hard and everything happens in a very short period of time.
Have you ever talked to an entrepreneur who is supported by a spouse who stays at home and helps raise the kids? You'll often hear the entrepreneur say that the other parent works harder than they do. Whether you’re a stay-at-home parent, a working parent, or somewhere in between this episode is for you.
Parenting: The Hardest Job of All
A lot of people don’t realize how difficult the work of parenting can be, mainly because it's not treated in the same way as a paid job. Imagine if you were working 120 hours a week, and you were getting paid a really low amount. You’d probably have some complaints. You’d make sure you took breaks or had certain times off.
When a child is first born, it’s almost impossible to take any time off, unless you have a nanny or a helper. Most new parents don’t get much rest: they’re just trying to keep up.
I love that sort of joke of a prayer. My mom often quotes it to me, and I guess it's because I'm not a very patient person by my nature. But here, I'm going to share with you something that I'm working so hard on. I've become better at it, but it's still difficult.
The Value of Entrepreneurial Patience
I think patience is especially difficult for entrepreneurs, for people who get excited about things and see possibilities, and for people who want to make the world a better place. We get excited about things!
And that’s when the impatience sets in. Where is it coming? When is it coming, why isn't it here yet? I did all my stuff. I mapped out my plan. I did all the homework I'm supposed to. I listened to the podcast by so-and-so. I did this dude or this gal's course. I've done what I'm supposed to do, damn it. Where is it?