Financial education has not been a perfect fit for the American educational system. While there are solutions to this issue, allow me to share some crucial lessons I discovered outside the classroom.
Lesson 1: Being an entrepreneur may earn you more money than working for someone else.
Instead of preparing students to be entrepreneurs, the emphasis in university is frequently on training them to be employees. The purpose of the educational system is to create people who can be integrated into the organizational structure, maintain their composure, and put in the necessary effort to pay taxes to support the system. Although some people find this to be a valuable and important path, it’s critical to acknowledge that there are other paths to financial success.
Entrepreneurship provides the chance to escape the constraints of a fixed income and a conventional job. You have the potential to make significantly more money—sometimes 10 or 100 times more—by starting your own business or engaging in entrepreneurial endeavors than what may be possible as an individual.
Lesson 2: Focusing On Profit On Time As A Metric
If you can transition from being an employee to thinking about your price per hour, you can implement a system that enables others or technology to carry out tasks and increase your return on time. This is something that the educational system doesn’t always teach you.
Consider a straightforward business example involving the sale of yard work services to neighbors to illustrate this point. Initially, a person could work directly for neighbors for a rate of $20 per hour, earning $160 per day for an 8-hour workday.
Since the gain on time is restricted to the number of hours worked, this is not much different from working as an individual. However, the person can increase their return on time by accepting the responsibility of finding new customers and employing additional individuals to complete the yard work.
They can hire other individuals in the neighborhood to do the yard work for them at a lower rate, like $10 per hour, as opposed to doing it all themselves. Even though the person currently only makes $80 in income, they can attract as many customers as there are neighborhood kids who are eager to work for them.
By using their time on Saturdays to secure one additional recurring client per week, they can double what they make in just four weeks (four clients at $80 profit = $320 instead of $160). Think about the potential if they gained ten new customers!
Scaling a business entails more challenges, such as working with various individuals, making equipment or truck investments, and taking some risks. However, the potential rewards are much greater if you accept these challenges and work hard.
Lesson 3: The Real Cost Of Spending
You really spend the difference between your earnings and expenses when you make a purchase. Let’s say you just graduated from college and make $3,200 after taxes each month. If your monthly expenses total $3,100, that means you are saving $100.
You can save an additional $400 per month if you can find a way to cut your monthly expenses to $2,700, which will enable you to save for retirement or achieve financial freedom five times faster than before.
Another way to consider it is that you are not only purchasing a particular item when you make unnecessary or unilateral purchases. You are also using up the difference between your income and expenses.
Using the example from above, which shows $2,700 in non-essential expenses and $500 in savings, even though $300 only makes up 10% of your total expenses of $3,000, increasing expenses by $300 reduces your monthly savings by 60%, from $500 to $200.
Initially, all the funds required for necessities like rent, utilities, phone bills, insurance, etc., are used up. After taking care of these costs, the remaining amount can be used to invest in a business opportunity that might eventually result in financial freedom or to save for retirement.
Lesson 4: A Degree May Not Be the Best Investment
In the past, earning a degree may have been the primary way to stand out in the job market, but that is no longer the case. There are countless ways to develop your unique skills to increase your value, employability, and uniqueness.
Let’s say your degree took you four years to complete and cost an average of $100,000. In my opinion, there are things that cost one-tenth as much in both time and money as your degree and provide your name with more credibility.
For instance, the publication of my first book, “Raising an Executive,” served as a significant catalyst for me in terms of developing my unique skills and gaining credibility. I believe it was the turning point that convinced several clients to work with me because it earned me numerous appearances on TV and radio.
The book was written in a matter of days, and I used marketing strategies to push it to the top of Amazon’s bestseller list. Writing the book gave me much more credibility than earning my degree. In fact, my education is rarely discussed in a professional setting.
There are several other cost-effective and time-efficient ways to establish your unique brand and stand out. Effective strategies include obtaining certifications, seeking mentorship from well-known figures in your industry, public speaking, launching a non-profit organization related to your field, and contributing to media publications in that sector.
While a degree may still be valuable in some fields, it’s crucial to explore alternative options that may offer more credibility-based returns on investment.
Lesson 5: Your Network Matters More Than Your Resume
College often teaches you that your resume is the most crucial factor, but this is simply not true.
I have a friend who was struggling to find a job after college. He applied for over 300 jobs, but he never made it to the interview stage.
To at least get a call, he falsified his resume, claiming to have graduated from Duke University with an impressive GPA of 4.0.
Surprisingly, even after submitting about a dozen applications with the false, impeccable resume, he still didn’t receive any interviews.
In my opinion, your network is far more important than your resume. Even if you lack the perfect resume for the job, you can still have a chance if you know the right people who believe in you and will vouch for you to an employer.
Your network will send business your way or vouch for your employment if you consistently do good, challenging work and are passionate about what you do.
Lesson 6: It’s Okay to Discuss Controversial Topics
I used to believe that because I am a devout Christian, I wouldn’t be able to engage in certain social circles. However, spending a lot of time in prayer before God and discussing my faith with clients and coworkers has had the exact opposite effect.
People are often energized when they hear someone expressing different beliefs. I used to keep my faith a secret to avoid offending anyone. However, walking with God has improved my common sense, humility, and sobriety to the point where people with different worldviews value and appreciate my perspective on things.
I don’t bring up controversial topics just to offend someone. However, if God is showing me something through the home ministry my wife and I run, and it has relevance to the workplace, I will definitely speak up and share it.
I’ve had coworkers open up to me about their struggles with alcoholism and other personal issues, and as a result, we have grown closer than we ever would have been if we hadn’t shared our backgrounds.
I would suggest that you are free to share things that might otherwise be considered taboo or could lead to disagreements with clients and coworkers, as long as you speak and act with sincerity.
Final Thoughts
Financial and professional success is not a linear path, and it certainly isn’t one-size-fits-all. These lessons demonstrate the power of thinking creatively, challenging conventional wisdom, and embracing a more imaginative approach to one’s career and financial success.
I would encourage you to challenge the status quo and remain open-minded in your pursuit of financial success, whether it involves reevaluating how you spend your time, leveraging your unique talents, or finding the courage to share your convictions. It’s never too late to learn these valuable lessons because they often come from experiences and perspectives not always covered in books or the classroom.