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“[You] can’t plow straight and keep looking back.”
– Paraphased from the Negro Spiritual “Hold On” –
During times of financial stress, it can be surprisingly easy for emotion to overcome reason. Before you know it, a person finds him/herself being ground to dust by the daily struggle of reactionary survival. The problem is that long-term wealth accumulation has never resulted from spasmastic fight-or-flight responses. To move from survival to wealth, a person must somehow make the leap from scratch-and-claw survival to financial strategy.
I know. Easily said.
How to do it is the million-dollar question.
Correction. It’s actually not a (single) million-dollar question. It’s three. But to answer the first question, you’ll need to do some strategic daydreaming.
Write The Vision; Make It Plain.
I’d like to propose that it is impossible to plan your future by reacting only to your present and past. While you may find that your past has brought you into a present world of hurt, you’ll have to look elsewhere if you want your life to improve. So let’s ignore the problems for a moment. It’s not like they’re going anywhere. Take 15 to 30 minutes to envision a future without them. Grab a pen and paper. Take a bunch of detailed notes.
What does your personal life look like in your ideal financial future? What is your family life like? Where do you work? When do you work? Do you travel? To where? How often? What are you doing for income? I say it that way, because your work may feel more like a passionate hobby in your ideal financial future. Write the answer to these questions down. Add any other significant thoughts that come to mind. Date your musings, and save them. The future you may someday thank you.
Question One
The good news is that, by completing the first exercise, you’ve literally just finished phase one of revising your financial future.
Now, I can almost hear your eyeballs rolling around the back of your head as you sigh. How does daydreaming about a better life help me? I’ve done that a million times already.
Of course, you have. Rather than arguing with you, I’ll answer your question with a couple of my own. When’s the last time you drove yourself to a destination without choosing where you wanted to go first? Can a person move from point A to point B without first deciding where point B will be?
We both already know the answer is no.
So all this time, you’ve been wishing and hoping for “a better life”. I’m just wondering if you ever stopped to outline what “a better life” would actually look like or be financed by. What would it feel like? Where would your “better life” be lived? You can’t get to the land of “a better life” if you never stop to specify where it is. So you have to be able to answer the question, “How would a better life and future look/feel for you?”
… And yes, I also know that rolling eyeballs don’t make a sound. [It’s called sarcasm; you’ll find that I use it a lot.]
… And no, this article is not an exercise that’s going to end with you repeating your goals in a mirror or stuffing a wish list under your pillow. We’ve on course to be much more directive with this financial strategy session. There are two questions left in this phase of the “better life” building plan.
But first a word of warning. To answer the next two questions, you’ll need to be honest. Lying to yourself will only put you on the pathway to a world of hurt.
On To The Next One.
In order to answer the next question, you need to consider the difference between making money through business ownership versus earning money through working a job.
If you own a business, you have a system that is able to make money without requiring you to work in it. Although you may have to work in your business to get it started, an true business is designed to continue generating income when someone else is hired to fill your position. You can go on vacation, and the business continues functioning to making money.
A job or side hustle does not function this way. In a job, you must be present to perform services and earn money. If you go on vacation, the cash flow stops. This is because you are basically an employee of either your employer or your side hustle.
Question Two
The continued realignment of your financial future requires answering this question next. “At this time, do you most need a business or a job to start your transition to a better life?”
For some, the answer will be obvious. For others, not so much. You’ll find a few points for consideration below.
If you have bills that literally need to be paid yesterday, today, or tomorrow, a job or side hustle will probably be a faster source of income.
If you’re consistently shuffling money and “robbing Peter to pay Paul”, increasing your income with a job is more likely to get you out of a reactionary cycle.
If you’ve cut your expenses and are struggling to afford basic needs (not wants) of food, basic clothing, shelter, basic transportation, and utilities, the extra funds from a side hustle or job are more likely to increase your financial stability.
By working a side hustle or job, you are more likely to receive income in the next 24 hours to 30 days. This is very different from a business system that can require significantly more time (months to years) to generate consistent returns. Furthermore, business returns take time to increase in size. Once a business starts generating income, it may still be several more months or years before it is able to provide large amounts of profit to the owner.
By using a side hustle you can begin to get traction on payment of your basic recurring monthly expenses. By living below your means, you can break out of the cycle of scrambling for money. If you still want to establish a business after that, set aside saved money to begin the process of building your venture and establishing a personal money tree.
For The Other Better Lifers
If you’ve read the above and find that it doesn’t apply to your situation, you may fall into the second group of people looking for “a better life”.
If you’ve spent years just barely staying ahead of your bills and paying on debt, but you’re never able to save enough to feel financially secure (much less get rich), you might attempt expanding your income by offering services through a business.
If you only feel as secure as your next paycheck, round of bonus, or positive earnings report from management, it may help to begin taking control of your future income by starting a side business.
If it concerns you that your children or grandchildren aren’t being taught how to secure a financial future that’s independent of an employer, having them intern at your business could provide valuable financial education.
Businesses can be like trees. You invest time and energy into growing them at the beginning. However, once a business or tree has been established and growing for a while, it will begin to produce fruit for you. However, just like a tree, there is a limit to how much you can take out of a business and still have it function well enough to survive. The fruit provided by a tree usually represents a small amount of the total material comprising the tree. Just like you wouldn’t cut down a tree and still expect it to continue giving you fruit, you can’t take all the funds out of your business and expect it to survive.
So when it comes to building a business, it’s important to decide how the venture will function in your life before choosing the kind of busines to begin. Your business should be designed to thrive under circumstances that match your ideal lifestyle. If you’re goal is to travel the world for 10 months of the year, don’t start a high-touch system providing boutique real estate services to high-end clients. You may become rich, but you’re also likely to kill all your dreams of travel.
That kind of approach is the business equivalent of planting an apple seed in the hope that the tree will produce oranges. It would be very frustrating to spend years slaving to grow that tree – only to find that it follows the genetics of the apple seed instead of providing your longed-for organges.
Question Three
This idea ties into the final question required for the successful realignment of your future. Even after all your work, identifying that your ideal future would be best served by starting a business still isn’t enough. Building a business can be hard. Entrepreneurs tend to be people who go against the flow of the crowd. They catch the vision and give life to dreams that previously existed outside the realm of others’ imaginations.
This is usually because entrepreneurs are fueled by more than the desire to experience a better, more luxurious life. The business owners who chase down and hog-tie tremendous aspirations are often driven by their answer to our final question, “Why are you motivated to build a business?”
Often times, the answer isn’t just that they want a better life. Frequently, the answer is that they have a burning desire to change the world. People may have told them it wasn’t possibe, but that answer wasn’t good enough. They found a way to create the change anyway.
In the case of Momma’s Money Tree, the purpose of these posts, resources, and products are only partially for income generation and your education. When she first started her journey, the founder of our company found herself frustrated by the lack of business and financial education she’d received from some of the best universities in the country. She was simultaneous irritated by statements from colleagues and coworkers who couldn’t fathom that a woman would want to be a mother and a business person at the same time. As time passed, she realized that there wasn’t a system designed to walk a person with a basic (i.e. middle/high school) education through the process of properly planning and starting a small business.
Our founder never wanted her children to experience the feeling of being trapped (in a career, relationship, town, etc.) because they lacked the knowledge required to generate the finances for their long-term security. So, she decided to create a financial and business education system for them. Although you have the privilege of reading the articles, buying the products, and using the resources, everything found at Momma’s Money Tree is an open letter to the children of its founder. Her “Why” ended up being a desire to pour all that she had learned from her businesses and career into teaching her children how to apply thier financial and entrepreneurial knowledge in the world. She became a woman on a mission to not only leave her family with a money tree planted by their mom, but she also wanted to leave a system for teaching future members of the family of how to grow money trees of their own.
When starting her journey, one of the first things our founder did was to answer the 3 questions posed to you in this article.
- How would a better life and future look/feel for you?
- At this time, do you most need a business or a job to start your transition to a better life?
- Why are you motivated to build a business?
Bonus For Reading This Far: Our founder actually took the process a step further by buying a series of binders for herself and each of her children. By placing half sheets of letter or legal paper between two of the photo cards, she altered the binders to serve to allow scrapbook and journal entries of her family member’s business and financial misadventures. If you’d like to see the binders, you’ll find them pictured at the end of this article.
In Conclusion
Defining your best life, identifying your most urgent financial needs, and identifying your motivator for change are the keys to realigning your financial future. By pausing to organize these portions of your plan, you do more than simply daydream about future hopes. You actually plant the seed for long-term wealth accumulation – because you’ve identified your driving reason to either start planning the launch of your business or start developing the financial reserve (i.e. savings) to eventually launch your own business. Either way, this represents a win for you now – and in the future.
Congratulations! You’ve just taken your first steps toward growing your own money tree!
D’Loreyn