Are you an Entrepreneur or a Wantrepreneur? Recently, I had an opportunity to visit with a potential job applicant here at the Financialoscopy office. I like to ask applicants in-depth questions. I asked what it is that they are looking for. This particular individual said that they want to leave their regular job that they have to show up to day after day, and they want to become their own boss. They want to own their own business. They want to make certain that they have control over their future. Those are great things to say, but as I continued on with my questioning, I asked them to tell me what they do on Saturdays and Sundays. How do they fill their weekends? This individual, who is barely 30 years of age, said they love their weekends because it’s when they get to take naps. Immediately, I’m thinking about how an entrepreneur rarely ever takes naps. In fact, especially at that age, this is the time that you put as much effort as possible into your business because you are the one who is solely responsible for its growth.
This is an example of why people are not really entrepreneurs, they are a wantrepreneurs. They want to be able to say they control their life, they own a business, and they are self-directing their future. Yet, they are the person who is taking naps. They believe that they are in charge when what they really have done is bought themselves a job. Even if you are considered self-employed, being self-employed does not necessarily mean entrepreneurship. It just means you have created a job for yourself. Except now you’re responsible for the additional expenses, the additional FICA and Medicare taxes, and the additional risks, but you’re not showing any of the profits.
Years ago, my wife and I were watching late-night television, and we were watching one of these get-rich-quick shows about real estate. We laughed when we saw these individuals on a beautiful beach in Hawaii sipping Mai Tais. They said all you have to do is wait for the checks to roll in once you own rental property. Supposedly, these individuals had only owned real estate property for less than a year and now they were in Hawaii, and if you follow this same system, you too could be independently wealthy. You would never have to worry again. We laughed because we also owned a real estate portfolio, but we understood that real estate involves work. It often requires getting on your work clothes and working on your rentals. It involves painting, stripping hardwood floors, and cleaning bathrooms, ovens, stoves, and refrigerators as one set of people move out and another set of people move in. It involves working with contractors. It means making sure that the sidewalk gets shoveled during the winter and the lawn gets mowed during the summer. It requires work, and you don’t get money right away.
I had one client years ago who decided, after watching one of these shows, that he wanted to become a real estate investor. On a whim, without consulting me, without any advice, he bought several duplexes in a part of town that I would not necessarily go to. My rule is, if I would feel uncomfortable going to collect a rent check at 10:00 o’clock at night in that neighborhood, I would not buy a piece of property there. He called me later on with two questions.
Question 1: What do you do if somebody doesn’t pay their rent?
Well, you make certain that you only have people in there that will pay their rent, and you make certain that you’ve got enough money in the bank that if they don’t pay their rent, you can pay the mortgage payment. Then he told me that kind of presents a predicate for question number two.
Question 2: How do I begin taking income off of these rental properties that I own?
Keep in mind, he wasn’t getting rent payments, but he still had mortgage, principal, and interest payments due. He never evaluated what the risk was of becoming a true entrepreneur. Instead, he was a wantrepreneur.
These schemes might seem really flashy on late-night television, but there is no quick way to become rich. Even with the lottery, there’s only one or two winners; most people lose. It’s the same with entrepreneurship. You’ve got to be willing to put forth the work. You’ve got to be willing to do the hard lifting. Even then, you’ve got to realize that the majority of small businesses fail because there is risk involved. I’m not saying that you shouldn’t have a side hustle. Sometimes, a side hustle is a very smart thing to have. I’m not saying that you shouldn’t work toward being an entrepreneur. Just realize you can’t become an entrepreneur and do things like relish your naps on Saturday and Sunday afternoons.
If you are the type of person who is able-bodied, willing to work hard, and you have skills and knowledge about something specific that most other people do not have, then entrepreneurship could make a positive difference in your life. But go into it thoughtfully and with lots of advice from accountants, CPAs, financial advisors, and other entrepreneurs Don’t just listen just for the good things that you want to hear, but also listen for the bad and the ugly. Can you handle it?
If this has got you thinking about your own future or about whether you should become an entrepreneur or a wantrepreneur, go into that decision with some knowledge and wisdom on your side. If you would like to discuss this further, let’s talk. Perhaps it’s time to schedule your Financialoscopy®.
