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Transcript

Should Everyone Start a Business? The Honest Answer || Masterminds Podcast EP67 · Masterminds Podcast

• 0:00
  SPEAKER_00: One of the most common questions these days is should everyone start a business?
• 0:04
  SPEAKER_00: And I know where these questions are coming from.
• 0:06
  SPEAKER_00: Because all over the internet, the beautiful internet, everybody is saying the only way to get wealthy is by owning or starting a business.
• 0:15
  SPEAKER_00: The honest answer is no.
• 0:18
  SPEAKER_00: Not everybody is meant to be an entrepreneur.
• 0:21
  SPEAKER_00: Because it actually takes a certain type of person, a certain type of skill set to be an entrepreneur, and not everybody is like that.
• 0:29
  SPEAKER_00: Let me even say this way: a certain type of temperament.
• 0:32
  SPEAKER_00: Let me break it down for you.
• 0:34
  SPEAKER_00: The first thing you need to be an entrepreneur, to run your own business, is you need to have a high appetite for risk.
• 0:42
  SPEAKER_00: You know, honestly speaking, running a business is very equivalent to gambling.
• 0:48
  SPEAKER_00: The only difference is you are gambling on yourself.
• 0:51
  SPEAKER_00: So running a business, the CEO, the boss, the founder, the owner needs to be somebody who is willing to try things that others haven't tried or aren't willing to try in hopes of getting a very high reward.
• 1:06
  SPEAKER_00: And most of the time, people fail.
• 1:08
  SPEAKER_00: But you fail, you keep trying, keep trying.
• 1:11
  SPEAKER_00: You have to keep taking risks until eventually it works.
• 1:15
  SPEAKER_00: For somebody who doesn't have that type of temperament, it can become very discouraging, it can become very draining.
• 1:23
  SPEAKER_00: And most of the time, you will either stop before it's time to succeed or you will just get flustered.
• 1:29
  SPEAKER_00: So even if you do get successful by running the business, you won't enjoy your life.
• 1:34
  SPEAKER_00: The second thing is the type of person who's supposed to run a business is most of the time what I like to call a generalist and not a specialist.
• 1:44
  SPEAKER_00: Because running a business requires you to play so many roles at the same time, especially in the beginning.
• 1:51
  SPEAKER_00: You are the founder, you are the CEO, you are the manager, you are the technician, you are the admin, you are the marketing manager, sales, social media, everything all put in one.
• 2:01
  SPEAKER_00: It mostly takes a generalist.
• 2:03
  SPEAKER_00: Whereas some people are specialists, they are very, very good at one particular thing.
• 2:10
  SPEAKER_00: They may even be the best in the world at that one particular thing.
• 2:14
  SPEAKER_00: And in that case, when that type of person starts a business, it's going to fail because they don't have the other strengths that are needed for the business to do well.
• 2:24
  SPEAKER_00: So let's say, for instance, you could be the best carpenter in the world.
• 2:28
  SPEAKER_00: You have the skills, you can build any furniture that any job that's given to you, whether it's construction work, whether it's just decor, you are the best carpenter.
• 2:38
  SPEAKER_00: However, when it comes to things like doing the right calculations for finances, you know, giving the right estimates, how to deal with clients, how to maintain your books, how to market yourself so other people keep booking you, you may not be the best at that.
• 2:54
  SPEAKER_00: So if such a carpenter, for instance, decides to go and work for a furniture company, they will be the best at their job and they will receive high rewards for it.
• 3:06
  SPEAKER_00: But when they try and start their own business, because they lack the skills to run the business, their skills will now go to waste.
• 3:14
  SPEAKER_00: Because everybody may want to work with them, but they don't enjoy the experience because of the places they fall short.
• 3:21
  SPEAKER_00: So the long and short of what I'm trying to say is not everyone is meant to start a business.
• 3:26
  SPEAKER_00: Not everyone is meant to be an entrepreneur.
• 3:29
  SPEAKER_00: And that is fine because when we are talking about building wealth, what people don't say properly is you don't build wealth by starting a business.
• 3:39
  SPEAKER_00: You build wealth through ownership.
• 3:42
  SPEAKER_00: And there's a difference between entrepreneurship and ownership.
• 3:47
  SPEAKER_00: And I'll explain that in a second.
• 3:49
  SPEAKER_00: But before I explain that, now let's talk about why people will tell you that being on a salary cannot lead you to wealth.
• 3:57
  SPEAKER_00: So the problem is not employment, the problem is not the fact that you receive a salary, the problem is something I like to call the salary trap.
• 4:07
  SPEAKER_00: The salary trap is putting you in a box that is so invisible you don't notice what is happening to you.
• 4:16
  SPEAKER_00: And it puts you in a box in three different ways.
• 4:20
  SPEAKER_00: Let me break down those ways to you.
• 4:21
  SPEAKER_00: The first problem with the salary trap is that the moment you stop, everything ceases.
• 4:29
  SPEAKER_00: Whether it's illness, whether it's death, whether it's being let go because your company is downsizing, whether it's your type of business going out of style, whether maybe your boss just doesn't like you anymore.
• 4:43
  SPEAKER_00: The moment you stop working, your lifestyle comes to a complete stop.
• 4:49
  SPEAKER_00: The second trap is that your salary is capped.
• 4:54
  SPEAKER_00: It doesn't matter how well you are doing at your job, it doesn't matter how much you are able to grow, no matter what, your salary will never exceed a certain amount because the value that you are given is not exponential.
• 5:09
  SPEAKER_00: The value that you are actually given when you are receiving a salary is time.
• 5:14
  SPEAKER_00: You are being measured by the time you are putting in.
• 5:17
  SPEAKER_00: So if someone is paying you for 40 hours in a week and four weeks in a month, that's 160 hours every single month.
• 5:25
  SPEAKER_00: That is exactly what they are paying you for.
• 5:28
  SPEAKER_00: Whether this month you brought in the biggest deal, whether you brought in the biggest business, whether everybody likes you or not, your value is limited to the time.
• 5:40
  SPEAKER_00: So your salary will always be capped.
• 5:42
  SPEAKER_00: I know there are going to be increments and bonuses, but it will still be capped, whereas ownership is unlimited.
• 5:49
  SPEAKER_00: Now, the third trap, which is the silent one that most people don't think about, is a salary builds nothing.
• 5:59
  SPEAKER_00: Now, most people get their salary and they spend everything.
• 6:04
  SPEAKER_00: So what that means is you have worked hard for 25 years and your net worth is still zero because you earn 10,000 a month, you spend 10,000 a month.
• 6:17
  SPEAKER_00: Earn 20,000 a month, you spend 20,000 a month.
• 6:21
  SPEAKER_00: So at the end of the day, when you've worked for so many years, you have nothing to show for it but memories of good times gone.
• 6:31
  SPEAKER_00: This is the biggest trap that most people don't notice.
• 6:35
  SPEAKER_00: So the trap itself is not employment, is not about the fact that you receive a salary.
• 6:41
  SPEAKER_00: The trap is how you deal with the salary.
• 6:45
  SPEAKER_00: So let's go into how you should think about your salary.
• 6:49
  SPEAKER_00: Your salary should be a seed.
• 6:51
  SPEAKER_00: I think everybody growing up, we all understand how farmers work.
• 6:56
  SPEAKER_00: You understand the fact that when a farmer harvests their crops, they don't eat all the seeds because they need seeds to plant all over again for the next harvest.
• 7:09
  SPEAKER_00: And that is what your salary is supposed to represent.
• 7:12
  SPEAKER_00: Your salary is not supposed to be spent all at once.
• 7:15
  SPEAKER_00: I know most people, if their salaries are paid on the first of the month, by the fourth, it's finished.
• 7:22
  SPEAKER_00: Some people cry that it gets finished before the salary even comes.
• 7:25
  SPEAKER_00: You know, they've taken loan on their phone, they are waiting for the salary to hit.
• 7:30
  SPEAKER_00: You are supposed to be using your salary to build wealth, and you build wealth through ownership.
• 7:40
  SPEAKER_00: So let me go straight into talking about what ownership really means.
• 7:44
  SPEAKER_00: Ownership is about having assets that will be bringing you revenue over time, or having assets that will be appreciating in value over time.
• 7:57
  SPEAKER_00: So as soon as you receive your salary, the first thing you should do, I can't emphasize this enough.
• 8:03
  SPEAKER_00: As soon as you receive your salary, the first thing you should do is pay your future self first.
• 8:10
  SPEAKER_00: Choose a percentage.
• 8:11
  SPEAKER_00: Honestly speaking, it's not about the percentage.
• 8:14
  SPEAKER_00: I like to stick with 20%.
• 8:16
  SPEAKER_00: I know some who say 10%.
• 8:18
  SPEAKER_00: I even know some who say 50%.
• 8:20
  SPEAKER_00: It doesn't matter about the percentage.
• 8:23
  SPEAKER_00: What matters is the consistency.
• 8:26
  SPEAKER_00: If you can be dedicated enough that every amount of your salary that comes in, every money that comes in, you are paying a particular percentage to your future self.
• 8:39
  SPEAKER_00: That guarantees, that prevents the trap that we're talking about.
• 8:43
  SPEAKER_00: Because remember, the trap is in three folds.
• 8:46
  SPEAKER_00: The first one is that when you stop, it stops.
• 8:50
  SPEAKER_00: But now, if you've been putting money away, then you have something to keep you going when things stop.
• 8:56
  SPEAKER_00: The second one is that it's limited, it's capped.
• 9:00
  SPEAKER_00: Now, when you invest your money, it's unlimited.
• 9:03
  SPEAKER_00: And the third one is the silent killer of not owning anything because your salary comes in and goes out, and you solve that by buying assets.
• 9:14
  SPEAKER_00: When I talk about assets, when I talk about ownership, it could be anything, it could be treasury bills, it could be gold, it could be stocks, mutual funds, it could be buying real estate.
• 9:31
  SPEAKER_00: Anything that you purchase, which either appreciates in value or brings in revenue, is the kind of assets that I'm talking about.
• 9:41
  SPEAKER_00: I'm not talking about the assets that in actual fact are liabilities.
• 9:46
  SPEAKER_00: I'm not talking about going to buy a new car, I'm not talking about going to upgrade your phone or going to buy that, you know, you know, not new Birkin bag.
• 9:55
  SPEAKER_00: No, I'm talking about assets that appreciate or bring in revenue.
• 10:01
  SPEAKER_00: Now, the good thing about buying these assets, and if you notice the type of assets I spoke about, all these are safe assets.
• 10:08
  SPEAKER_00: They are things that are guaranteed to grow.
• 10:11
  SPEAKER_00: The good thing about this is this is not risky like owning a business.
• 10:15
  SPEAKER_00: Let's even say you want to invest in businesses.
• 10:19
  SPEAKER_00: You can be just an owner in a business.
• 10:23
  SPEAKER_00: You can find a business that's already doing well.
• 10:26
  SPEAKER_00: Maybe you have a friend who's opened a shop at Cantamanto and is doing well.
• 10:30
  SPEAKER_00: You can say, Oh, I've saved up my salary for the past two years.
• 10:34
  SPEAKER_00: Let me put it in so that you open a second shop at Cantamanto.
• 10:39
  SPEAKER_00: And your second shop, every month, you will pay me this amount.
• 10:43
  SPEAKER_00: You know, I know a man, I heard of a man, I don't know him personally.
• 10:47
  SPEAKER_00: I heard of a man who opened a vulcanizer shop, and all he requires is that the vulcanizer will pay him thousand CDs a month.
• 10:59
  SPEAKER_00: Anything you make past that thousand CDs a month is your profit.
• 11:04
  SPEAKER_00: And he did this 300 times.
• 11:06
  SPEAKER_00: So after doing this for a while, now he was getting consistently 300,000 CDs a month without having to work on them.
• 11:15
  SPEAKER_00: Because these volcanizers didn't have the startup capital.
• 11:19
  SPEAKER_00: He gave them the startup capital, and they are just required to give him thousand CDs every single month.
• 11:25
  SPEAKER_00: That is what I'm talking about when I mean when I say ownership.
• 11:30
  SPEAKER_00: Ownership is about letting the money that you have made go to work for you.
• 11:36
  SPEAKER_00: You know, you spend the first part of your life working for money, and then you turn things around and let the money work for you.
• 11:46
  SPEAKER_00: So to summarize, so you really understand this.
• 11:50
  SPEAKER_00: The solution is not that everybody should run and go and start a business.
• 11:55
  SPEAKER_00: There will be chaos.
• 11:56
  SPEAKER_00: You will fail and you will say, Richie and masterminds lied to me.
• 12:00
  SPEAKER_00: No, that's not the solution.
• 12:02
  SPEAKER_00: If you don't have the temperament, if you don't have the patience, if you don't have the hunger for risk, don't start a business.
• 12:10
  SPEAKER_00: Concentrate on ownership and make sure you understand that your salary is a seed.
• 12:18
  SPEAKER_00: So you need to sow that seed, you need to prepare it for the next harvest.
• 12:24
  SPEAKER_00: Choose a percentage and always put that away into owning assets that are going to grow your wealth over time.
• 12:31
  SPEAKER_00: With that being said, I hope this conversation has brought you another step closer to being the mastermind.
• 12:37
  SPEAKER_00: I know you deserve it.