Understand What You Know (and what you don’t)
Once you’ve taken stock in what it takes to get to your dream lifestyle, you need to take account of your own personal strengths and weaknesses.
You’ve gotten to where you are by emphasizing your strengths, often glossing over your weaknesses. If you’re finally ready to accept the fact that you do not know everything, it’s time to move forward.
In the business world, this will mean hiring amazing people who excel at your weaknesses. When it comes to your personal finances, this means knowing when to listen to offers and when to flat-out reject them.
IT’S OK TO SAY NO
The ability to say “no,” is absolutely crucial for successful entrepreneurs. At the beginning, you may feel the need to say “yes,” to every offer that comes your way, but you’re beyond that now. At this stage in your life, you can be selective with your time, attention and money.
You need to know if a business offer is in your field of expertise — or a great deal for your friend/uncle/acquaintance pitching you. We’ve talked before about building your moat — this is why you need that moat. If you’re pitched an offer in a field you’re not comfortable with, odds are this is not the deal for you.
Once you’ve gotten to the point in life where you’re saving money for that surplus or superfluous lifestyle, you shouldn’t let distractions get in the way. A trusted financial advisor can tell you whether or not an offer is going to be good for you long-term, or if it’ll just drain your time and resources.
Everything needs to come back to the basic premise that financial independence will only happen on your personal account, not your business’ ledger. Do what you can to protect that path to financial independence, even if it means hurting feelings or saying no to a lifelong friend with a too-good-to-be true investment offer in a field you have no knowledge about.
DON’T FOLLOW THE CROWD
Once you’ve set your savings plan up and have started to build that nest egg, what does pop culture tell you to do? Invest in the stock market, of course! You’ve seen countless commercials for websites and apps that make it seem so easy. Maybe you’ve even got a hot tip or two from a colleague.
Did you obtain your wealth through financial market knowledge? Do you even know what you’re getting yourself into? If you’ve answered “no,” to either of these questions, don’t mindlessly sign up for an online account and start buying stocks of your favorite companies. You’ve built your business and your personal financial castle on smart, informed decisions. Why throw caution to the wind now?
If you know nothing about the stock market, it’s perfectly fine to bypass it. If you’re honestly curious about investing, go with the advice of a trusted financial advisor — not a celebrity.
Think of it this way: when you need legal help, do you hire an attorney or start reading legal journals? It’s fine (and honestly smarter) to delegate duties like this to people who are well-versed.
This comes back to knowing yourself. Your time and money should strictly go toward pursuits you’re knowledgeable about. Throwing money at an unfamiliar issue could be disastrous for your long-term financial well being. Just because you’re told to do it or because everyone else is doing it is terrible reasoning.
When you take stock of your own strengths and weaknesses, your road map to financial independence will become even clearer. You’ll be able to accept or decline opportunities based on their merits to you instead of outside information.
Your time and your money are too valuable to waste on foolish decisions.
