The New Economy: Entrepreneurship, Part Four

CLICK HERE FOR PART ONE

CLICK HERE FOR PART TWO

CLICK HERE FOR PART THREE

So let’s move on to question #2: In this new economy, is it better to become an entrepreneur, or is it really safer to work for someone else?

median-household-incomeThe average household income in the United States is approximately $50,000 a year. If you wanted to be part of the top 25% of income earners, you would need to earn at least $90,000.

To reach the top 10% would be a household income of $140,000, the top 5% $190,000, and to be in the top 1% you would need a combined household income of at least $380,000 a year.

So here’s the question–if you wanted to move up to the top 25% or 10% or even the top 5% of income earners (and who wouldn’t want to?), can you see yourself moving up to these levels with your current means of income?

Most of us have been taught to not even dream that high, but why? In today’s new economy, it is more and more feasible to be a top income earner if you are on the right path. What do you think would give you the best chance to move up to these top levels of income? In my opinion and in the opinion of many experts, the answer is to become an entrepreneur.

EntrepreneurThe concept of entrepreneurship has been around for millennia. The great explorers, the crusaders, the pilgrims, and the American west pioneers. The founding of this country was very entrepreneurial. Breaking away from Great Britain to be able to live as we choose, work as we choose, worship as we choose. It was the essence of being an entrepreneur.

Here is what a few entrepreneurs have to say about this life path:

Paul Zane Pilzer – “Why in America where anyone could have anything, would people want to give up their freedom and become effectively a modern day slave, show up every morning at 7:30am leave at 5:30pm, sit down, shut up and do what your told.”

Susan Sly – “Think about the great entrepreneurs, they are visionaries, they have heart. They are willing to do today what others won’t, so they can do tomorrow what others can’t.”

Kim Kiyosaki – “In the world of entrepreneurship, there are no limits. You can make as much as you want depending on how much you want to work and how smart you are and how great a team you put together.”

But there are reasons people shy away from entrepreneurship, for one, it’s not easy. When people decide to become entrepreneurs and work for themselves, they have to make lots of decisions, but they are riskier than you might think.

Kevin Harrington best known as an investor on “Shark Tank” shared this, “Any kind of a retail business with build outs, is extremely expensive. Even a small store such as the popular yogurt shops today can run $300,000 or $400,000 to setup.”

imagesThe typical business start-up story is the same, small or large, new or experienced, you are taking a risk and can win big or lose it all, and most entrepreneurs lose it all two or three times before they make it.

Richard Branson is a great example of this. As a very wealthy English Business owner and investor, he has lost at least 15 businesses over the years. 80% of all new U.S. businesses crash and burn within their first 5 years, many in the first 18 months.

Meanwhile, 72% of Americans would love to be their own boss, according to a current Gallup poll, but they don’t know how to get there. There are actually only four options for the average new Entrepreneur:

  1. You can buy an existing business – The first question to ask is why are the owners selling? What’s wrong with it? Commonly it’s because they are tired, it is hard, or maybe they are not making the money they had hoped for.
  1. You could buy a franchise. Here there is less risk and it is a proven system, but it is very expensive any where from $100,000 to $1 million.
  1. You could start something from scratch, a completely new business, but most people don’t have the confidence that their product or service idea would really go big, or they are afraid to borrow that much money, or they don’t feel they have the skill set to start a new venture, especially in our regulation ridden and litigious society.
  1. They could become an investor in other people’s ideas and start-ups, but that can prove to be very risky indeed. Harry Dent says, “Venture capitalists, who are the very best and the most sophisticated at investing in new break-through businesses make it on 1 out of 11. That means 10 out of 11 are mediocre or fail, with most of the 10 failing. And Angel investors are lucky to get 1 out of 15 or 20.”

Robert Kiyosaki relates, “A business is a team sport. Like I have to have       accountants, I have to have engineers, I have to have system designers, I have to have office staff and management, I have to have maintenance and sales and marketing, I have to have mission statements, I have to have legal, and all that.

The average joe-smo, even me, I go out there, I don’t have the skills to put a business together on my own.”

The food and hospitality industry has even a greater risk of failure.  Authorities say that 90% of all first year non-franchise restaurants fail.

downloadEven though 72% of Americans say they want to be entrepreneurs and be their own boss, the bottom line for the four traditional options is that each takes money, sometimes a lot of it, they take expertise and they take time. All of that adds up to just too much risk for most people.

But what if there was a way that you could have all of the proven aspects of business ownership and still control your own life? What if you had the proven product, the proven systems already in place, proven training, and you were in charge. And you didn’t have to risk a ton of money.

What if you had all of these good aspects of business minus the employer? Do you think more people would be open to working for themselves in that environment?

 

Being As Responsible As I Can

sobering-reminder-of-our-own-mortalityI have been thinking a lot about my mortality lately. No, I don’t have any premonitions, but Julia and I just updated our Revocable Living Trust and it always makes me think about my life, my relationships, and whether or not I am doing all I can for my family.

My first job right after discharge from the Navy in 1987 was selling pre-need cemetery plots.

I was in South Carolina and after 6 months I became the top salesman for Memorial Gardens Plantation.

This was an eye-opener for me!

I was 26-years-old and boy did I get an education on death and everything related to it. I believed in my product (the pre-need purchase of burial plots and associated items, a 100% need for every human being) and that I was saving families thousands of dollars by making the purchase before the death of a loved one. But what really cemented it for me was the following experience.

6a00d8341bf67c53ef01a3fc5cd987970bOne evening while I was preparing to make my house calls to pre-arranged appointments, a beautiful young woman came into the cemetery office with a baby in her arms.

She was crying and I suddenly realized something terrible had happened and I was witnessing a young widow making funeral arrangements.

I watched in shock as the cemetery director explained to this distraught woman the typical procedures and costs and need for a vault, a casket, the headstone, etc.

His matter-of-fact explanation is not what bothered me. What infuriated me was the way in which he was leading her to purchase the most expensive items, appealing to her loss and love for her husband.

I was so upset that I determined right there that I would work even harder to persuade people make all of these arrangements pre-need, which translated into thousands of dollars in savings, but also having these kinds of arrangements taken care of before the event of death, the survivors would be saved tremendous agony and heart ache. Since that experience, I have always had life insurance, a will, and later an estate plan.

I am not rich by any stretch of the imagination, so my estate is small, but I just feel so much better knowing that Julia and the kids will not have to make a bunch of decisions upon my eventual passing. If they want to be mad about the decisions made, they can be upset with me–the one who is gone, not with each other.

Estate_PlanningDo you have your affairs in order?

Do you have a solid retirement plan in place?

Do you have a current estate plan in place?

Are you willing to take the time and expense to do all of these hard things now while you can for your loved ones, or are you going to leave it to them during their grief?

Estate Planning is an integral part of wealth building.

Without an estate plan, everything you treasure will be left to chance and likely loss.

But these losses are often just the “tip of the iceberg”. The horror stories associated with disagreements over who gets what and when and even how, are what divides families and often destroys relationships for a lifetime.

downloadBy creating an estate plan you control all these decisions, relieving your loved ones of the stress and hardship they would have faced had you not been proactive.

There is one fact of life we all face; death. We know that death is unavoidable, and can happen at anytime and anywhere. Stop and think; you have home owners insurance despite not thinking your home is going to burn down, and car insurance even though you don’t expect to be in an accident.

You insure your home and car in case something does happen. Having a comprehensive estate plan is how you control your estate, and make tough decisions when life’s inevitable events do occur.

In the best selling book “7 Habits of Highly Effective People” Steven Covey emphasizes the importance of planning. Two of Steven’s habits speak directly to the importance of estate planning.

imagesHabit 1 – “Being proactive is about taking responsibility for your life”. Comprehensive estate planning is all about being proactive.

Habit 2 – “Begin with the end in mind.” Estate planning is about you being in control over how you want your life to “play out,” and how critical decisions will be made when it becomes necessary.

Julia and I just updated our estate plan. It may not be the most enjoyable activity, but Julia feels so much more secure and I feel like I am being as responsible as I can.

 How Much Does Estate-planning Cost? 

I did some digging and found a basic range of family estate planning costs from $1,800 to $6,500 per living trust. Also, you should plan needing to update at least every few years, figure about $300-$500 per update. I am sure there are cheaper and more expensive planning options, but this is what I found.

Who Should Do Your Planning?

I also researched a little on this and found anything from do-it-yourself websites to attorneys who are happy to have you in their office during multiple sessions, as long as you don’t mind all of those billable hours.

For those who have little time and want to get it safely done with as little fuss as possible, we suggest taking at look at Strongbrook’s Estate Planning Program.

 

The Failing American Dream: There Is A Cure

abc_stossel_090910_mainIn April of this year, John Stossel wrote a thought provoking article about the ability of never quitting as being the reason America has been successful.

I quote him here:

In the USA, it’s OK to fail and fail and try again. In most of Europe and much of the world, the attitude is: You had your shot, you failed, and now you should just go work for someone else.

 

But this limits the possibilities. And some of America’s biggest successes came from people who failed often.

 

We know that Thomas Edison invented the light bulb, but few people know that Edison filed 1,000 patents for ideas that went nowhere. He was fired by the telegraph office. He lost money investing in a cement company and an iron business.

 

Henry Ford’s first company failed completely.

 

Dr. Seuss’s first book was rejected by 27 publishers.

 

Oprah was fired from her first job as a reporter. A TV station called her “unfit for TV.”

 

But they all kept striving — and succeeded. They were lucky to live in America, where investors and your neighbors encourage you to try and try again. We are lucky to benefit from their persistence.

 

But those happy experiments are less likely to happen today. Now there are many more rules, and regulators add hundreds of pages of new ones every week.

 

Dallas Mavericks owner Mark Cuban left school with no money and no job prospects. He managed to become a billionaire by creating several businesses from scratch. I asked him if he could do it again today, and he said, “No … now there’s so much paperwork and regulation, so many things that you have to sign up for that you have a better chance of getting in trouble than you do of being successful.”

 

That’s tragic.

 

It’s not just big corporations that get hassled by regulators, the way progressives might like to imagine.

lemonade-stand

Kids’ lemonade stands — and one I tried to open in New York City — are sometimes shut down for not having proper business licenses.

 

When Chloe Stirling was 11-years-old, health officials shut down her home cupcake-making business.

 

The more government “protects” us, the more it puts obstacles in the way of trying new things. It does that every time it taxes, regulates and standardizes the way things are done. Simultaneously, government offers “compassion” — welfare and unemployment benefits.

 

Faced with the choice of collecting unemployment or putting your own money at risk and hiring an army of lawyers to deal with business regulations, I understand why people don’t bother trying. When that attitude is pervasive, the American dream dies.

 

On my TV show this week, economist David Goldman says, “The U.S. government has done everything possible to make it hard for people to take a new idea from inception to startup to expansion.” He says that when he told a former CEO that he was going to be on my show, the ex-CEO said: “Just tell them to shut Washington down. That’s all they need to do!”

 

Washington won’t shut down. But couldn’t regulators just chill out for a while?

 

Big government doesn’t send us the message that we can make it on our own and that great things may happen if we dare to try. Government mostly hinders us, and then brags that it is waiting to take charge when we fail.

I believe that the American Dream can still become the American REALITY!

But it requires a singular mindset. We have to be willing to work hard and do things that we are not used to. It demands personal responsibility for our own outcomes and doing some double duty (working at more than one thing at a time). And we will have to spend less time watching “American Idol” and more time developing our ideas and taking educated risks.

170 years ago, Alexis de Tocqueville stated that, “[Americans] are constantly excited by two conflicting passions: they want to be led, and they wish to remain free. . . “

Tocqueville was very clear, it is impossible to reach our potential without taking complete responsibility for  our actions and owning our current conditions.

I have spent the entirety of 2014 to this point, speaking anywhere people would listen regarding this very issue and then offering solutions that the average American could engage to turn the situation around.

My main message has been that there is no political liberty without financial liberty and to engage in financial liberty or FREE ENTERPRISE, there must exist a certain level of political liberty.

cleon-skousen-speakingOne of my mentors, Cleon Skousen, always taught that the magic of America was that the citizens, free from government intervention, had the right to try, buy, sell and fail. And if you tried enough times, you would most likely succeed.

Today that philosophy has been replaced with that of avoiding risk at all cost and being safe and working for the government or a big multi-national corporation.

This sounds more like a personal wealth death sentence.

To have the kind of financial health that will allow a citizen to engage in liberty of all kinds requires enough residual income to meet all day-to-day living expenses plus 30% to provide citizenship activity flexibility (donations to or promotion of liberty causes or time spent at the state or federal legislature or local political service or speaking and writing, etc)

[Residual income, is income that continues to be generated after the initial effort or cost has been expended. Royalties or rent income for example, are types of residual income.]

For example, if your living expenses are $4,000 per month, you will need a minimum of $6,300 of monthly residual income or $76,000 per year (approximately 20% for taxation and $1,200 for liberty flexibility) to be economically independent and able to engage in liberty.

There is no longer any question, America faces a multiple front crisis; a serious retirement crisis along with a potentially disastrous national and personal debt crisis.

Most Americans recall the devastation caused by the 2004 Indian Ocean Tsunami. We sat in utter horror and even screamed at our computer screens as we helplessly watched people being swept away by the unrelenting waters.

The financial crisis we face today is no less menacing. The current financial tsunami is acting very much like the event of 2004. As the economic tide recedes, we watch not in horror but in curiosity or even total oblivion. The entire nation appears to be suffering from Normalcy Bias,* denying or ignoring that a crisis exists at all. All the while, the water has reversed and is now up around our ankles.

What needs to happen is that real men and women need to face their fears, be responsible and be willing to determinedly taking control of their own destinies.

If we yearn for our children and grandchildren to enjoy the freedoms that we do today, developing this level of Financial Freedom Health is a moral and familial imperative.

Take the Financial Freedom Health/Education Assessment and see how prepared you are to perpetuate financial and political freedom.

Financial Freedom Health/Education Assessment

  1. Do you have an adequate retirement plan? (Based on the $76,000 residual annual income discussed above, this means a $1,750,000 nest egg with a 4% annual dividend. Using the accumulation method at 7.9% earned interest annually, this will require retirement plan installment payments of $1,215 each month for 30 years. A business or a properly acquired real estate portfolio can accomplish the same residual income in a much shorter time and in a safer manner).
  1. If your current retirement plan is not adequate, do you have the skills and resources to correct it?
  1. Have you done sufficient research to really know if your retirement plan is crisis proof? 
  1. Do you review your retirement plan semi-annually? Are staying up-to-date on all law and policy changes that could impact your retirement plan and investments?
  1. Do you have enough knowledge to trust your retirement providers or are you “blindly”trusting them?
  1. Do you have a will or living will or a revocable trust in place? Why? Have you explored all options?
  1. Do you have your investments protected as much as law will allow? Are you sure?

If any of these questions are troubling to you, click here to begin a free course on financial freedom.

Col Sanders

In the USA, it used to be OK to fail and fail and try again.

Before Harland Sanders became world-famous Colonel Sanders, he was a sixth-grade dropout, a farmhand, an army mule-tender, a locomotive fireman, a railroad worker, an aspiring lawyer, an insurance salesman, a ferryboat entrepreneur, a tire salesman, an amateur obstetrician, an (unsuccessful) political candidate, a gas station operator, a motel operator and finally, a restaurateur.

At the age of 65, a new interstate highway snatched the traffic away from his Corbin, Ky., restaurant and Sanders was left with nothing but a Social Security check and a secret recipe for fried chicken.

As it turned out, that was all he needed.

If you, like Colonel Sanders, refuse to give up on the American Dream, click here to start your American Dream education.

 

* Normalcy bias refers to a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and its possible effects. This may result in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of governments to include the populace in its disaster preparations.

Atlas Shrugged: France Models The Future Of America

9780465092680_p0_v1_s260x420In his 2008 book, The Cube and the Cathedral, George Weigel writes a compelling story suggesting that if you want a good view of the United States 15 or 20 years from now, take a look at Europe.

More to the point are disturbing news reports that demonstrate spooky similarities to Ayn Rand’s Atlas Shrugged, being played out in France as you read this. Watch this Video.

Recent proclamations and “business as usual” from Congress and the Executive branch are providing more than ample evidence that American political leadership is following in the footsteps of France’s “Shrug,” and rushing with all its might to catchup with, and indeed overtake Europe in the race to fulfill some anti-Randian ideal.

In spite of it all, Monticello College remains dedicated to the proposition that the Unites States is a nation watched over by Providence, and that although she seems to have stumbled, America can be great again.

We are doing all that we are physically capable of to provide leadership and accountability to that end. Part of that effort is the debt-free building of our campus in Monticello, UT. Thanks to many of you, we reached our 2013 funding goal of $2,500 per month.

Our new funding goal or Phase Two of our building campaign is to secure 350 individuals or families who support Monticello College and are willing to donate $25 per month for 6 months.

Phase two is the build-out phase where we will develop facilities for summer programs and large group events and prepare for our first cohort of on campus students.  The funding goal for phase two is to raise $300,000. Step one of this goal is to reach $50,000 so we can begin construction by June 1, 2014.

Again, we need 350 individuals or families to contribute $25 per month for the next 6 months. We, of course, will gratefully accept any donation that you can offer.

Will you help us?

Will you be part of the re-building of our country?

To donate or for more info click below:

DONATE HERE

 

The Debate Over The 2nd Amendment

AR15_M62Whether you support it or not, the recent dispute over the Second Amendment has the makings of a serious controversy in coming days.

With the current refusal of as many as 300,000 Connecticut gun owners who legally possess rifles that have just now become illegal in that state, we are witnessing a profound example of civil disobedience.

The amendment in question states:

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

In the 2008 Supreme Court case of D.C. v Heller, it would seem that this issue had finally been put to bed, but the debate rages on. The final paragraph of the majority opinion of the Court concerning D.C. v Heller delivered by Justice Scalia makes their ruling clear:

We are aware of the problem of handgun violence in this country, and we take seriously the concerns raised by the many amici who believe that prohibition of handgun ownership is a solution. The Constitution leaves the District of Columbia a variety of tools for combating that problem, including some measures regulating handguns, see supra, at 54–55, and n. 26.

But the enshrinement of constitutional rights necessarily takes certain policy choices off the table. These include the absolute prohibit­ion of handguns held and used for self-defense in the home.

Undoubtedly some think that the Second Amendment is outmoded in a society where our standing army is the pride of our Nation, where well-trained police forces provide personal security, and where gun violence is a serious problem. That is perhaps debatable, but what is not debatable is that it is not the role of this Court to pronounce the Second Amendment extinct.
We affirm the judgment of the Court of Appeals.

Here is a chance for all citizens, regardless your politics, to become informed and stand for something.  For more information on this topic I recommend the following:

The Founders Constitution

The Making of America

And the following opinions in these links:

The Six Things Americans Should Know about The Second Amendment

The Second Amendment Myth

 

The Charles Schulz Philosophy






 

Charles Schultz

Charles Schultz

Although this philosophy has often been attributed to the creator of Charlie Brown and Snoopy, there is no evidence that he actually penned it.  Regardless who the author is, it still makes my point.

In our capacities as fathers and mothers, family protectors, and business decision makers, we all have to measure other people.

We have to judge who to trust, to help us, and who to lead us. Who will I trust with my kids?  Who will I do business with? Who do I trust as a political leader? Who do I trust for investment advise?

The list goes on.  What I am really saying is that we have to make judgments about others everyday.

The question is what criteria are we using when we make these judgments?

In the quest to build leaders it is easy to say that we want them to have impact in society, to make a difference, to “be the change we wish to see in the world.” Ok, I agree with that, but what character qualities, what skills, what disciplines do we want to inculcate in these future leaders to achieve the desired “change?”

What follows is the philosophy of Charles Schulz (or someone else).

1. Name the five wealthiest people in the world.

2. Name the last five Heisman trophy winners.

3. Name the last five winners of the Miss America pageant.

4 Name ten people who have won the Nobel or Pulitzer Prize.

5. Name the last half dozen Academy Award winners for best actor and actress.

6. Name the last decade’s worth of World Series winners.

How did you do?

The point is, few of us remember the headliners of yesterday.

These are no second-rate achievers. They are the best in their fields.

But the applause dies. Awards tarnish. Achievements are forgotten.

Accolades and certificates are buried with their owners.

And we seem to be little effected by these momentary achievements.

images (1)Here’s another quiz. See how you do on this one:

1. List a few teachers who aided your journey through school.

2. Name three friends who have helped you through a difficult time.

3. Name five people who have taught you something worthwhile.

4. Think of a few people who have made you feel appreciated and special.

5. Think of five people you enjoy spending time with.

6. Identify 2 mentors who helped to open the doors of life for you.

7. Recall one act of kindness that forever changed your perspective on life.

Easier?

The lesson: 

The people who make a difference in your life are almost never the ones with the most credentials, the most money…or the most awards. They simply are the ones who care the most.

In fact, I submit that people who make a positive difference in your life are probably making a positive difference in the lives of others at the same time.  Good people are usually good to everybody.

These criteria should also apply to our leaders. High achievement is contagious and helps to raise the standard for all of us, so yes when possible we want our leaders to be the best in their fields, but we also need leaders who are not afraid to admit mistakes, we need leaders who genuinely care for others, we need leaders who are charitable in their private lives, we need leaders who are truth and principle driven, and who are self-deprecating and humble.

Moreover thou shalt provide out of all the people able men, such as fear God, men of truth, hating covetousness; and place such over them, to be [their] rulers . . .”

(Exodus 18:21)

It is time we reexamined this whole leadership thing.

images (4)After all, we are the ones who decide who we are going to follow—a basic requirement for leadership.

So if we get to decide who the leaders are why are we choosing so many bad leaders?

Or maybe bad leadership is not the issue here.  Maybe bad choosing is the real problem.

When we choose leaders, are we more concerned about what is in their hearts or are we more interested in what is in their wallet and how much that will benefit us?

When we choose leaders do we care more about how they think or who they know?

When we choose leaders are we more interested in what they do when few are looking or do we value the intuitive skill of smelling out a good photo op?

Again I say, it is time we reexamined this whole leadership thing.