Super rich entrepreneurs are not focused on how much their business is worth.
Rather, they focus on how much money is coming in. There is no point if the business is worth billions but the revenue cannot surpass the expenses. This is why major companies go bankrupt. The fundamentals of doing business remain the same regardless of how big a company is. The money coming must be more than the money going out. Successful entrepreneurs never forget this and they have habits that ensure they stay on the right course to maximize the opportunities for cash inflow.
These 5 money habits are principles of financial increase.
What are Money Habits?
Money habits are habits that directly impact the earning and spending of money. They are a bit different from work habits. Work habits have to do with productivity. Money habits are things people do, often without any conscious thought, that directly affects their money.
Rich people don’t work for money. Hence, work habits and money habits are separate. The reward for work is more work. The reward for responsibility is more responsibilities. That doesn’t mean a person will make a lot of money.
Work habits do not translate to financial results.
On a secondary level, what you do with the money you have determines how much money you will make. But on a primary level, what brings money is not what you do for work. Instead, it is how you do your work. This means how much leverage you put on it.
Super rich entrepreneurs have several money habits depending on where they function. There are 5 particular money habits common to most of them regardless of their industry.
1. The Checking Habit
Accountability is very important in business. When most super-rich entrepreneurs have a new business venture to manage, they always make the accountability timeline very short.
This means checking how much the business is bringing in every day. Average entrepreneurs wait till the end of the week or month to look at how much money came in. Super rich entrepreneurs look at the daily numbers.
They constantly check how much money is coming in.
There is a 9-figure entrepreneur that says that when he is working on a new venture, he looks at the numbers every 15 minutes. If the numbers are the same every time he checks, he does something to make it go up. Of course, more established ventures can be looked at daily or weekly. But waiting up to a month before checking the financial numbers is a bad practice.
When things go wrong financially, those who check the numbers regularly will know quickly and do something about it. Those who wait for a month before checking the numbers get to know about the problem too late.
A financial problem is often not a problem if you get to know about it in 24 hours or less. Then, you can do something before it grows huge.
2. The Budgeting Habit
This is different from the regular budgeting that most people do. Most people budget to cut their coats according to their size. Super rich people choose the coats they like and plan to grow into it. They budget forward.
This type of budgeting is not about setting goals. It is preemptive spending. One of the reasons people don’t do what it takes to achieve their financial goals is that they have not decided what to do with the money.
Super rich entrepreneurs have the habit of budgeting how they are going to spend the money they are going to make
Money is quite useless without its purchasing power. And when people aim for more money without a picture of what to do with it, the desire is not there. In some cases, people even sabotage themselves from their goals. They see making a lot of money as making a lot of money.
Super rich entrepreneurs put a different picture on the money they want. They see the things that the money will do. Hence, their drive for riches is not what merely for the money but for what they will do with the money.
Super rich entrepreneurs budget forward and give it all it takes.
3. The Confirmation Habit
Super rich entrepreneurs talk to their tax attorney before fantasy spending. Fantasy spending means spending exorbitant amounts of money on luxury items. The downside of this kind of spending is the tax system.
Any entrepreneur that doesn’t take tax laws seriously will pay heavily for it. Every purchase made, no matter how small, affects the taxes a business pays. This is why super-rich entrepreneurs have the habit of confirmation.
The confirmation habit is the habit of confirming the impact of every major purchase or sale in the context of taxes.
An entrepreneur was about to sell one of his major real estate properties. Just before the sale, he called his tax attorney to ask about what the impact is going to be on his taxes and how he could better arrange the terms of the sale.
The attorney asked what he would like to do with the money from the property. The entrepreneur replied that he would purchase another property. In that case, the attorney concluded that there is a way to structure the sale whereby the entrepreneur won’t pay taxes on that sale.
The tax system (in the USA) rewards you for putting your gains back into the economic system. Super rich entrepreneurs maximize these rewards.
4. Preeminent Investing
Everybody knows that rich people invest. But what many don’t know is that rich people invest before other expenses. They don’t spend first. They don’t pay their debts first. They don’t buy luxuries first.
Everything else follows the investment. When the right investment has been made to secure the future, then they can do what they want with the rest of the money.
Super rich entrepreneurs have a habit of investing (before other expenses) with the money that comes in.
Tony Robbins, a top business coach, says there are two businesses every entrepreneur has to deal with — the business you are and the business you are becoming. If you focus too much on the business you are, you won’t have a business anymore in 5 years. If you focus too much on the business you are becoming, you won’t make it to the future because you will be bankrupt today.
If the money is coming in good today, super-rich entrepreneurs have formed a habit of investing in what the business is going to be in 5–10 years. The next concern after making good money today is securing tomorrow.
5. The Goodwill Attractor
Finally, super-rich entrepreneurs tip liberally. They sometimes give a ridiculous, outrageous tip. But it is an investment. They want special treatment and so they give people reasons to treat them specially.
This also attracts goodwill. Working people like those who give them big tips. When the tips are regular, they form a bond with such people. And a sense of loyalty is created. Such a bond can come in handy in many situations.
If you teach your members to tip liberally, they will naturally become better givers.
Yes, some entrepreneurs are tight-fisted with money. In most cases, they are the ones that get the outbursts of anger when someone triggers public hate against rich people.
Tipping is a way to show generosity. When people can give liberally, they are enabled to receive liberally also.
5 money habits are common among super-rich entrepreneurs. Anyone that embraces those habits has a significant chance of becoming a super rich also. They are:
1. Checking regularly how much money came in
2. Budget before earning
3. Talk to a tax attorney before fantasy spending
4. Invest first
5. Tipping liberally