Tag: Entrepreneur

The Importance of Foundation

Entrepreneur and angel investor Naval Ravikant highlights the importance of learning the foundations in life.

Put simply, it’s becoming competent in skills such as numeracy, writing, reading, speaking, and listening. The better you are at these things, the stronger your foundation and the simpler you will be able to learn anything else.

In my own life, my speaking and listening was more of a weakness so I decided to work as a door-to-door salesman in the summers – there was no way I could succeed in it unless I learned how to speak and listen to a high level. In my off-season I spend a lot of time reading books and writing on this blog, in order to become more comfortable and competent when having to communicate and understand the world through written word.

These skills are not only useful in the world of work, but also everyday life.

Don’t Wish It Were Easier, Wish You Were Better

We all wish life was a bit easier – that we had more time to relax, less stress, and an escape from the duties and responsibilities we have. But we know deep down that escaping our responsibilities doesn’t solve the problem. In fact, achieving hard things gives purpose, fulfilment and happiness. Athletes chase the thrill of hitting personal bests and winning Olympic gold, entrepreneurs want to contribute to make society better, couples want to have great relationships and raise a family. All these goals are difficult to achieve, but we appreciate life so much more when we do difficult things.

So instead of avoiding responsibility, seek it out. Find a goal that you’re not sure is possible for you. Doing hard things hardens you. It gives you more encouragement to realize that your potential is a little bit higher than you thought it was before. It’s the key to self-esteem and purposeful living.

In Today’s Information Age, Execution Is Key

Back in our parent’s generation knowledge was power. In the 1970s only 8% of young adults were going into higher education, while nowadays the figure is closer to 50%. On top of that, the rest of the world are becoming more educated, with more access to resources. The rise of the Internet means we are now in an information age where knowledge is abundant. If you don’t know a simple fact, Google will tell you.

So if knowledge is no longer as powerful, what has replaced it? Execution. The abundance of information in the environment nowadays means that individuals can pretty much choose any vocation that they wish to. The problem for young people now is choosing something to do, and following through on it.

Those who have the courage to execute reap the rewards in comparison to those who are continually seeking knowledge only. A lot of insight can actually come during the experience too, and this type of insight is more impactful if you’re out there in the arena of life instead of simply studying theory.

Entrepreneur Gary Vaynerchuk consistently advises millennials to “stop thinking and just do.” Your young adult life is supposed to be about trying new things, figuring out what you like and don’t like, what you’re good or not good at, and having the advantage of time to course-correct. The way to achieve more in the modern day? Think less, do more.

Dan Lok’s Wealth Triangle: The Three Steps to Wealth

Dan Lok is a Chinese-Canadian entrepreneur and business mentor, and one of his ideas is of the Wealth Triangle. It consists of three sequential pillars for someone to follow in their journey towards financial confidence and freedom.

Here they are:

1. High-Income Skills

Learn a skill that has the potential to make you over $10,000/month or $100,000/year. Lok’s idea is if you’re going to trade your time for money, you may as well trade your time for a high amount of money. A high income skill could be in anything, and includes copywriting, sales, consulting, and social media marketing.

This was a large reason why I chose to learn sales in a commission-only compensation structure – it would give me the motivation to up-level my skills as quickly as possible, while being rewarded handsomely for any success. I’m happy to say that I reached and ticked off this pillar on the wealth triangle after two years of learning and applying sales skills.

The ideal here is to develop more than one high-income skill and bring them together to create even more confidence in your earning power.

If you’re not already practicing a high-income skill and you’re unhappy with your financial situation, this is where Lok suggests you start.

2. Scalable Business

So what happens when you’re already earning five figures a month and you’re ready to go to the next level? Lok’s next pillar is to create a scalable business. Not all businesses apply to this – Lok recommends avoiding businesses like restaurants that create lots of overhead costs or infrastructure. Scalable businesses leverage other people, systems and technology in order to create income from other people’s work. The idea of scalable business is to create cashflow in addition to your income.

In the industry I work in, I was able to start up a team of salespeople in order to leverage their skills instead of only relying on my own sales for income. This involved plenty of training, running sales meetings, and holding progress reviews. It’s definitely more of a challenge that just being responsible for yourself, but it can be more fulfilling if you bring a team along to succeed with you. The reason why it’s scalable is that the team can grow and the more experienced sales reps can become managers who recruit more reps too. The top sales managers in the industry I work earn millions per year.

However, Lok highlights that not everyone is cut out to start a scalable business. There can be risks of losing money, or carrying debt. It can be stressful. According to Lok, creating a scalable business is not essential for building wealth, and it is possible to become a multi-millionaire just from a mixture of high-income skill and the third pillar.

Lok reminds us that as we move onto building a scalable business, it’s important to skill be working on our high-income skill and generating income that way. If you’re just starting off with a scalable business, it’s unlikely that it will be immediately making more than your six-figure income, so keep utilizing your high-income skills to have the confidence of paying yourself, no matter what happens in your business. In my case, that meant going out and making my own sales while also managing other salespeople.

3. High-Return Investments

Lok defines a high-return investment as an investment that provides at least a 10 percent annual return, year in and year out. This is the best way to build your net-worth after you have at least developed your high-income skill. One example Lok gives of a high-return investment is real estate.

As good as a 10% annual return sounds, Lok recommends thinking more strategically – would this money get a better rate of return if I invested it into myself in training a high-income skill, or if I invested it in marketing for my scalable business? In my own life, I took advantage of reinvesting my money hundreds of times over into matched betting, a high-income skill I learned in 2015. At the time, I was saving for a trip to New Zealand and within six months of starting this “high-income skill”, I had earned over £15,000 for my trip, and actually started earning more through betting than I did with my regular job at the time. If I had instead put the savings I made from my low-wage job into a 10% investment vehicle, I would have come away with a tiny amount in comparison. The matched betting provided me with 500+% return, although I did have to spend time actively betting on my laptop.

Lok says that if you master the high-income skill portion of the Wealth Triangle, and invest it wisely, you can create a million dollar net worth in seven to 15 years if you’re able to keep your expenses in check.

The biggest reminder of the Wealth Triangle is that it is supposed to be used sequentially. Lots of people think about investing and starting businesses when they haven’t even harnessed any of their earning power yet. According to Lok, if you’re earning less than $10,000/month, hitting this consistently should be the main focus if your target is wealth. Trading your time for high dollars gives you a foundation that you can then move onto the second and third pillars. Sinking all your life savings into a business idea, like we see on Dragons’ Den, is a result of these entrepreneurs skipping the first stage of building up their high-income skills. When the Dragons inevitably say no, they are emotionally and financially bankrupt.

In summary: Build up a high-income skill, then work on a scalable business to create cashflow, and then invest in something with high returns to expand your net worth.

Lessons in Stoicism: The Illusion of Control, and How to Deal with Adversity

Lessons in Stoicism is a book written by John Sellars that introduces the Stoic school of philosophy made famous by Marcus Aurelius, Seneca and Epictetus in the first and second century AD.

One of the main themes in Stoicism is the idea of control within one’s life. The Stoics asked themselves what they really control. The answer – the only thing we can control is our judgements. Although judgements are only a small part of the mind, the Stoics believed that because we can control our judgements, we are able to control what truly matters for our wellbeing.

So, if our happiness is based on our romantic relationships, career, possessions, appearance, or health, we are leaving our happiness in the control of external forces. Even though we can take actions to aid us to be successful in the categories above, we ultimately cannot control whether a partner loves us, whether a company hires us, whether possessions remain in our possession, and whether the body remains healthy. So make your goal simply to do the best you can.

Another tenet of the Stoic philosophy is how to deal with adversity in one’s life. Stoics believed that adversity is the stimulus that is needed to develop as a person, and that life wasn’t complete without facing any difficulties – that would be the real misfortune! Even so, the Stoics remind us not to seek out adversity and drama for the sake of it, it will happily come naturally in the timeline of our lives.

The Stoic philosophers practiced a technique called the premeditation of future evils. They thought about all the possible bad things that could happen in their lives – the death of a family member, loss of reputation and riches, loss of health etc. This may seem like a negative thing to do, but the Stoics found that when people avoided thinking of these setbacks, they were ill-equipped to deal with the reality of it when the time came. Entrepreneur Gary Vaynerchuk frequently thinks about what he would do if he found out his mother had died in a car accident – not only does it prepare for the probable event that his mother will die before him, it realigns him to what is truly important in his life.

Read more about Stoicism in some of Seneca’s most revered essays: On Tranquility of Mind, Consolation to Helvia, and On the Shortness of Life.

Success Leaves Clues, but We Shouldn’t Disregard Luck

A quote popularized by Tony Robbins – “Success leaves clues” – can get us very excited about lofty goals. If we were only to follow the playbook of mega-successful entrepreneurs, sportspeople, politicians and artists, we could (and should) achieve the same results. But what most people are poor at understanding is the role of luck in success.

Daniel Kahneman, the Nobel Prize winner and author of Thinking, Fast and Slow, highlights books like Built to Last by Jim Collins and Jerry I. Porras that describe common characteristics of successful companies that are built for growth and long-lasting success. Kahneman argues that the companies that are chosen for their success are statistical anomalies, rather than the consequence of skill. Many companies run exactly the same way would fail due to the role of luck and chance. Therefore, the conclusions made in these types of books could well be useless.

Although it is difficult to get your head around, Kahneman’s point makes sense. A year after their inception, Google were willing to sell their company for $1m, but the deal didn’t go through because the buyer said the price was too high. There are likely a multitude of other ‘lucky’ events in the company’s history that will have helped Google to get where they are today.

But just because a lot of success is down to luck, doesn’t mean that we should no longer try. The real question is: How can we put ourselves in more positions to get lucky? We are much more likely to get signed by a professional football club if we play in front of scouts and spectators than if we played in our back-garden where nobody saw us.