Karen Keller
The definition of capitalism is a socio-economic system in which private ownership leads to profit for the owner. At least that’s what the dictionary says. But what does it really mean for entrepreneurs?
Unfortunately, 80 hour work weeks have become the norm for entrepreneurs. They are committed, creative, and eager to make everything they touch a success.
Entrepreneurs take matters into their own hands. They know where to start buy somehow, they get side-tracked. They lose focus because everything depends on them. How can they avoid this trap? They can learn the secrets behind the most successful capitalists of our time.
Secret #1: Being a capitalist isn’t only about income. Because you make a large income doesn’t guarantee entrance into the capitalist class. What you need to do is create a business or revenue stream that generates cash regularly without you having to sell your efforts. For example, Carl is a lawyer who makes more than 300K a year. He puts in at least 80 hours per week. And there’s John, who owns a travel agency that generates annual income of 300K but he doesn’t have to run it or be involved in any way. In fact, when he dies her family will still reap the benefits of solid cash flow. Make your money work for you.
Secret #2: ROI for 25 years or more. Focus on projects that will provide income for the long haul, aka greater than the next paycheck. This is where you need to be willing to take the risk. Start that online business. Tell your daughter to start one, too. That online business will generate income plus you are investing time and energy that you have control over. Focus on projects that will result in long term income collection -income that you can reinvest into other ventures that interest you. For example, instead of working for that big coffee shop in the sky, work in your own coffee shop where every cup of Joe is ‘KaChing’ in YOUR cash register.
Secret #3: Diversify sources of income. Which would you rather have a job that paid you $250,000 or a job that paid $100,000 plus you collected additional income of $150,000 in stock dividends, real estate holdings and consulting fees? If you choose the latter, you’re better likely to survive a recession. Besides, you are not at risk for losing everything if your employer decides to downsize.
Secret #4: Capitalists value their time. This is the very reason they want the biggest chunk of their money to come from passive income (real estate, dividends, pensions, royalties, etc). They realize passive income is the road to freedom.
Secret #5: Capitalists think like farmers. Poor people see money as a finite commodity – it runs out then you wait for more to come in but you only get so much at a time. The capitalist sees money as a seed – just like a farmer. Each nickel that comes your way has the potential to produce or expand into more money. For example, if a teenager saved $10,000 per year and at 12% rate of return (compounded) they’d have $83,692,000 by the time they were 75 years old. But, unfortunately many young people want to have new furniture or a shiny new car right now. Time is a friend to your money and the capitalist knows this.
Secret #6: Constantly create opportunity. Go after that big client. Research and invent the next ‘must-have’ product. Look for the next risk. This does require you to become a student of investment, trends, and research know-how. Oprah said it best, “What looks like luck to most people is when preparation meets opportunity.”
Secret #7: Think of business as a game – with confidence. Remember when you played Monopoly? It was a race to see who could accumulate the most money and real estate. Well, in the real world it isn’t that much different except you are racing with yourself. You are determined to prove your success not in terms of money, etc. (those are the rewards) but in terms of your talent and skill. Approaching your business this way helps remove a lot of the fear because you understand that if you lose money or assets, you’re only one idea away from rebuilding.
Secret #8: Looks and origins don’t matter. The capitalist doesn’t care that their money comes from non-sexy businesses. They can smile all the way to the bank if they are in the trash business, storage units, or selling electrical products. On top of that, they are smart to shake all possible resources to get money; banks, equity groups, or insurance companies. The average middle class person sees that banks are the only place to go and if they get turned down twice they stop trying.
Secret #9: Understand what’s in your peripheral vision. That means taxes and any other fallout related to investments or business start-ups. They keep their eye on the main ball but don’t lose track of the other balls on the table.
Secret #10: Recognize who holds your future. The capitalist knows that markets may go up and down but they always have a plan for whatever they run into. They don’t remain tied into one particular action, especially one they don’t control. The capitalist doesn’t panic they go to Plan B.
Become a capitalist; at least adopt their way of thinking and acting. They obviously are doing something different that results in building wealth. Entrepreneurs need to read memoires, biographies, and reports on the philosophies and what motivates the capitalist to succeed. Learn the mistakes they’ve made and what things they value. It isn’t just about the money.
