I Wish I Had Learned This a Decade Ago: Money Lessons
Reflecting on my career journey, I’ve transitioned from being an employee to stepping into the role of a business owner. This shift has offered me invaluable insights into how people view money and make financial decisions.
One of the most profound realisations I’ve encountered is the importance of adopting a business owner’s mindset. Business owners generally approach money differently than employees.
On average, they tend to be more willing to invest money, seeing it as a tool for growth rather than just an expense.
The Hidden Costs of Employment
When you work for someone else, many costs are often concealed.
For example, someone else restocks the coffee, cleans the office, and hosts those “free” Christmas drinks.
The beauty of employment is that you don’t always have to worry about these financial outflows; they’re simply part of the package. However, this comfort can lead to a lack of awareness about the real costs of running a business or managing your finances effectively.
As a business owner, you quickly learn that every item and service has a price. You begin to appreciate that every expenditure carries both a cost and a potential benefit. Successful business owners understand how to weigh these factors, often choosing to spend money strategically to save time or enhance profitability in the long run.
Too often, those not accustomed to this perspective concentrate solely on immediate costs. This narrow focus can lead to oversights that may ultimately cost them money or time—two precious resources that can significantly impact their financial well-being.
For example: You can either invest money to generate more revenue or spend it to free up time that can then be utilised to pursue more income opportunities.
Understanding Financial Stress
Transitioning into a business mindset is not just about money; it's also about managing stress.
Financial stress is a common concern, especially for those juggling family responsibilities, mortgages, and careers.
Many people think that financial strain is a problem faced only by others. However, it’s completely normal to feel the pressure, particularly when you have big aspirations—like upgrading your family home or ensuring your children receive a quality education.
Regardless of your income level, financial stress can creep in when you’re uncertain about your situation and your ability to meet those goals.
A lot of my clients find themselves in this very predicament. They’re high earners, yet they struggle to balance their financial ambitions with the realities of their current circumstances.
The Debt Dilemma
Another critical issue I frequently encounter is the tendency for high-earning professionals to take on excessive debt.
While it’s tempting to leverage debt for assets such as a home, it’s essential to recognise that this approach may not always lead to financial freedom.
Many people assume that acquiring debt for investments—be it property or shares—is a guaranteed pathway to wealth.
However, this decision must be made with caution. The appropriate level of debt varies based on individual goals and the necessity for flexibility in one’s financial life.
For instance, I often see individuals eager to grow their wealth who take on significant debt while simultaneously planning to reduce their working days to three or four days a week.
This lack of alignment between action and goals can create more stress rather than alleviating it.
Instead of relentlessly pushing in one direction, it’s vital to consider your need for flexibility. Do you have a robust plan that accommodates both your financial goals and your lifestyle desires?
A Path to Financial Clarity
Understanding these aspects of financial management is crucial for anyone looking to improve their financial situation. By embracing a business owner’s mindset, you can better navigate your financial journey, making informed decisions that lead to lasting change.
If you’re looking for guidance on aligning your financial strategies with your goals, consider scheduling a strategy session with me. Together, we can create a tailored plan that considers your unique circumstances and aspirations.
Want to know more?
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The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.