Once you figure out your true net worth, it’s time to ask arguably the most important question any entrepreneur can ask themselves: what kind of life do you want?
This doesn’t mean generally, such as “I’d like to have more money” or “I’d like to have more free time.” You need to outline exactly what you want. Do you want more time so you can raise your children? Do you want to jet-set around the world? Is your future garage going to house a Mazda or a Maserati?
Not every entrepreneur desires the same lifestyle, and that’s fine. Maybe you just want to live comfortably and not have to stress monthly bills. Maybe you want to climb the Forbes 400 list and enjoy stratospheric wealth. The paths to get there are vastly different, and you need to understand that before stepping forward.
If you’re unsure about what kind of lifestyle you want to live, here are three options:
- Sufficiency (staying out of anything you’d deem “unacceptable”)
- Surplus (a life with some luxuries)
- Superfluous (a life with so many luxuries they become commonplace)
The problem for many entrepreneurs today is that they’re always shooting for the superfluous lifestyle, not giving any thought to saving for the sufficiency or surplus lives. When you do this, you risk your foundation. You need to make sure, above all else, that you plan to save enough for a sufficiency lifestyle, one that is just above comfortable, without any major sacrifices.
Maybe you want to live richer, but don’t see the need in owning a yacht. The surplus lifestyle is generally where most entrepreneurs shoot for, allowing them to live a lifestyle they’ve only dreamed about, enjoying luxury goods and international vacations without a second thought. You’re not on any “richest” lists, but you’re living much better than most people.
Lastly, the superfluous lifestyle is one only enjoyed by a select few. If you want to live like a billionaire, you will need an extraordinary amount of planning, thought and hard work. This is the gilded mansion lifestyle that goes beyond your wildest dreams.
However, the one trap most failed entrepreneurs fall into is sacrificing the sufficient lifestyle for a surplus or superfluent one. It’s tantalizing to dream and assume that you’ll shoot for that superfluous lifestyle, but there’s a reason only a handful of people around the world live like that. It’s incredibly hard to get there.
The sufficient lifestyle needs to be your base. Before you can even dream about the latter two lifestyles, you need to get square away enough money for the sufficient lifestyle first.
I’ve seen so many entrepreneurs crash and fail, starting back at square one and wasting so much time, sacrificing the necessity of a sufficient lifestyle foundation for one filled with imaginary riches.
You (hopefully) have already mapped out a future for your business, building a platform that solves a problem. You know what your business is doing now and what it will take to succeed, whether that means a greater share of market or an increase in sales.
When you started your business, you had an idea in mind. It might’ve been to carve a niche in your local market (sufficiency) or to be the latest franchise trend sweeping the country (superfluency), but you had a plan in mind. You’ve taken the steps and put in the work to get where you are, keeping an eye on that overarching goal.
Now, it’s time to draw out a similar roadmap for your personal life, keeping in mind that the overwhelming amount of “entrepreneurs” out there are destined to fail. This will not be an easy road.
With these steps in mind, you can define the next steps of your future and determine what it will take for you to reach that lifestyle you really want.