Success on the road less traveled

How many people have a J-O-B that does not nurture or fulfill them, and live smaller lives as a result?

by Todd S. Smith — 

Entrepreneurs typically buck the system. Conventional career and financial thought seldom encourages this atypical path. We hear: “Get a good education. Find employment with a stable company. Save as much as possible so you can retire someday.”

Following this advice limits those thirsting for more from their personal and professional lives. How many people have a J-O-B that does not nurture or fulfill them, and live smaller lives as a result? They may enjoy more security or better benefits, but what do they sacrifice in terms of quality of life and self-satisfaction?

Conventional financial dogma, despite its best intentions, perpetuates the problem. Many stories in the popular financial media promote zero debt, saving at all costs and utilizing traditional investment tools to ensure a secure future. While this is inherently good advice, it nevertheless can deter people from pursuing larger, more fulfilling lives. It also neglects an important asset class: you and your career.

Pursuing work that nurtures you as a vehicle through which to express yourself can be a significant investment, providing far richer returns than traditional investment vehicles. Yet following this path often involves forsaking the mainstream and embracing risk. It may require foregoing savings, incurring debt and temporarily resisting traditional investments.

Entrepreneurship is a very viable choice for some, but its aphrodisiac effects can cause us to abandon conventional financial wisdom entirely. You want to enjoy the benefits of your less traditional vocation while ensuring future prosperity and financial security. In order to see your dreams manifest as you follow that divergent path, you must remember to employ certain conventional financial tools.

1. Have a plan. Just as you have business and marketing plans, create a financial plan that indicates where you will allocate and invest your funds.

2. Allow for emergencies by developing and maintaining adequate reserves. Try to earmark at least six to 12 months worth of expenses to keep your business afloat and your portfolio, if you have one, intact.

3. Make sure you are properly insured. Nothing can derail your business and your finances more quickly than being sued and/or underinsured in the case of an emergency.

4. Watch your debt. Counter to mainstream thought, not all debt is bad. Debt incurred to develop yourself and your soul’s purpose (education, your business, etc.) is good. Still, you should limit high-interest debt as much as possible.

5. Do not invest everything in your own company. Be sure to diversify your existing wealth to mitigate your risk.

6. Do not forget about retirement. Many entrepreneurs are too busy running their companies to consider retirement. Reduce taxes and save with a solo-401(k), profit-sharing, or even a defined benefit plan for older business owners. Develop a succession plan, for your eventual retirement.

It takes courage to run your own business and follow a different path, but remember to plan. You don’t want to look back, wishing you had followed the herd. Money is not meant to keep us trapped in a rigid life. Rather, it is a vehicle for enriching our souls. Knowing this, you can succeed as an entrepreneur — and preserve your future — by marrying unconventional methods with conventional ones.

 

Todd Smith, Certified Financial Planner™, is a financial planner, speaker and coach who helps working adults navigate the complex financial landscape to achieve greater economic success and prosperity. 602-485-3896 or www.azmythfinancial.com.

Reprinted from AzNetNews, Volume 26, Number 3, June/July 2007.

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