The Most Important Thing

According to many social scientists, the most important thing in life is a person’s social and professional network. In other words, the people around you, your team, and the people you work with. If you have poor people around you, you will probably be poor. As the saying goes “Birds of a feather flock together”.

The CashFlow Quadrant represents the four different people in the world of business. Remember that there are entrepreneurs found in three of the four quadrants – the S, the B, and the I.

E stands for employee.

S stands for self-employed

B stands for big business (500 employees or more)

I  stands for investor

My doctor is an entrepreneur is the S quadrant…. And S can also stand for specialist, small business, smart, and star, such as professional athletes and movie stars.

Before firing his accountant he asked, “Who should I talk to if I fire my accountant?”

I gave him three names: Tom Wheelwright, my accountant, Garrett Sutton, my attorney, and Ken McElroy, my partner in real estate.

“Why do I have to call all three?” he asked.

“Because business is a team sport and they are all part of my team,” I replied. “We have been together for years. We have made millions together. I trust them with my life.”

“But why three?” ask the doctor.

Because it takes three different advisors to make money, protect what we make from taxes, and protect our money from predators. If not for the three of them, I would be like you, making millions but paying excessive taxes and worried about predators who want to steal my wealth through the court system.

“Do you mean lawsuits? he asked.

I nodded. “Lawsuits and taxes. You see, if you have plans on becoming rich, you need to know how to protect yourself-before you get rich.”

My doctor had another question: “Why didn’t my accountant give me this advice?”

That really is the million-dollar question, isn’t it? And the answer is that I don’t know. My friend would have to ask his accountant that question. What I do know is that my previos accountants did not really know to protect my wealth either. They were smart and expensive. When I realized they did not know or understand why I invested in real estate, I let them go. When another accounting firm suggested I sell all my real estate and invest in mutual funds, I fired them immediately. They may have been smart accountants in the E quadrant, but they were not smart accountants in the I quadrant.

In this book, you will learn my team so you can build your own team. Begin an entrepreneur is no big deal. Almost anyone can be an entrepreneur.

There was a young girl in my neighborhood who had a babysitting business. Her parents allowed her to use the family home to take in young children of different ages, in the evenings. Parents would drop their kids off and gladly pay her fee to be able to enjoy an evening without the kids. Once her charges were asleep, the young entrepreneur would do her homework while she made $10 an hour per child. On a Saturday night, her busiest night, with seven kids to watch, she earned $70 per hour, plus tips. Not bad for a 15-year old girl.

She used her earnings to pay for most of her college tuition and expenses. In other words, she reinvested her money, which made her a richer entrepreneur. I do not know if she paid taxes. That is between her, the tax department, and her conscience.

The point is that anyone can be an entrepreneur. The problem is, very few entrepreneurs become rich entrepreneurs.

Statistics show that most entrepreneurs do not become rich. In fact, many small business owners earn less than their employees. The small business owner earns less because their work continues after the employees go home and they work even when the business is closed. When you calculate the number of hours the small business owner puts in and how much they are paid, many earn less, per hour, than their employees.

A friend, an entrepreneur, recently had a news article written about her. The newspaper stated she made $80,000 a month. I am sure many people gasped at hearing that amount. Later, when I had a coffee with her, I asked, “ How much of that $80,000 a month do you keep? Smiling she said, “None of it. I reinvest every penny of it to grow the business. We survive on my husband’s paycheck.”

Being an entrepreneur is a 24/7 job. Even when they are not working physically, most are working mentally, or worrying emotionally. Employees can go home, or go on vacation. Most entrepreneurs cannot. I’ve heard that Bill Gates did not take a day off for eight years while he was starting Microsoft.

I stress this because many employees think being “ the boss” is easy. Many employees think they do all the work and the boss has it easy and makes all the money. The reason many employees and entrepreneurs do different types of work, work that requires different skills.

Statistics show that the reason nine out of 10 small businesses fail in the first five years is because most employees, even college graduates with advanced degrees such as MBAs, do not posses the essential skills to be entrepreneurs. Making matters worse, of the one in every 10 that does survive the first five years, nine out of 10 fail in the second five years. I know. I have been one of those statistics. I have had far more failures than success.

I am quite certain that the reason most employees do not become entrepreneurs is because the thought of failing- and of being without a steady paycheck- terrifies them. For those that cannot control that fear, it is best they keep their day job, their benefits, and paid holidays…punching out at 5:00, having dinner, watching TV, enjoying their three-week vacation each year and appreciating the security of being an employee.

Leave a Reply

Your email address will not be published. Required fields are marked *