There’s no doubt that having enough money is a prerequisite to a good life. When you have enough money, you can choose to spend time with your family and do the things that make you happy. However, there are many impediments to achieving this ideal lifestyle, and here are seven that you must watch out for if you want to build real wealth.
One of the first things stopping you from becoming rich is that you carry high-interest debts. Although debt can be a useful tool, most of the time, people get into debt for unnecessary reasons. According to a recent study, about 80% of people are battling with debt. In other words, 4 out of every 5 people you see are in debt. The disadvantage of debt is that you must pay it back with interest. And the interest rate of some debts could be as high as 20%, which means that for every $100 of debt you have, you would have to pay an extra $20 back in interest. Now, imagine if you have to pay back $1,000 with a 20% interest rate. That means that you’ll have to pay an extra $200!
Now, don’t get wrong, every single day, it gets harder to stay out of debt. From student loans to a mortgage, auto loans, and credit card debts, being in debt seems to be the new normal. However, the first step to stay out of debt and become rich is to decide that debt will not be part of your life. Some people are doing well without debt, so decide to be like them by avoiding debt. Imagine what your life would look like if you didn’t have debt? Think of how you could use the extra money you would have every month if you were debt-free.
Now, the first step to get out of debt is to calculate how much you owe and pay it back. You may not be able to pay everything at once but making plans to pay back your debts is certainly a step in the right direction. Once your debts are paid, do your best to avoid further debts by cutting your spending and creating a budget. This will help you focus on your needs and significantly reduce ever getting into debt again!
The fear of investing
Another thing stopping you from building true wealth is the fear of investing. So many people prefer to save their money in banks where they can see it because of the fear of losing money. However, it is easier to become rich by investing rather than saving money.
Therefore, the first step to overcoming the fear of investing is learning about investing. One of the reasons why you may be scared of investing is that you think you’ll lose all your money, and this is probably because you don’t know how investing works. Although investing does carry risk, the more investing knowledge you have, the more educated investing decisions you can make, and the good part are that you don’t have to go back to school to learn how to invest. You can start by taking advantage of free online resources or enrolling in an investing course.
Next, you have to set goals to help you stay motivated during your investing journey. For instance, you can set a goal of investing a certain amount towards retirement or for your children’s education. Start small so that you don’t lose your motivation if you happen to realize losses. Even $100 can get your investing journey going. Also, it’s important to learn from your mistakes when they happen because they will, but the key is to avoid them in the future!
Thinking you already know everything about money
One of the easiest ways to deceive yourself is to claim you know everything about money. When it comes to money, there is no know-it-all. In fact, the richest person on earth does not know everything about money, and having a degree in finance does not guarantee you’ll become rich.
However, when you think you know everything about money, you may find it difficult to learn new things. The most productive minds are the ones open to learning new ideas. You should be willing to admit there are things you don’t know.
Here are a few ways to learn more about money and improve your finances. Firstly, invest in books and courses about money to increase your knowledge. One of the habits of some of the richest people is that they read every day. People like Warren Buffett, Mark Cuban, and Oprah Winfrey have all attributed their success to what they learned from reading books.
You can also learn more about money by associating with successful people. We learn faster by observing what people do, therefore, you can easily pick up the habits that made them successful by associating with them. For example, you could learn how to save for retirement by associating with someone who has done that already. You can learn from their exact steps and mistakes to increase your chance of success.
Having kids before you can afford to
Kids are adorable; however, having them when you’re not prepared can be terrible for your financial progression. Many people fail to realize that kids are dependent and you have to take care of all their needs, and this could cost a lot of money.
For instance, you have to start spending money even before the kid arrives. You have to visit the hospital for regular checkups during the pregnancy, and you may be required to take some medications. After the kid has arrived, you still need to spend money on clothing, feeding, and regular medical checkups. It is also possible to have a medical emergency that would cost you more than you have planned for.
If you ask , having kids should be something that adds joy to your life and doesn’t add financial stress to it. Unfortunately, this is exactly what happens when you decide (or don’t) to have a child when you’re still swimming in debt or have no savings in your name.
Therefore, before you decide that it’s time to have kids, consider how much money you have set aside and if it’s enough to take care of a child. Remember that that child is your responsibility, and many of your parental duties will require money.
Pursuing more formal education than you need
Gone are the days when the only way to make money was by going to school, getting good grades, and getting a job afterward, which would be proceeded by buying a home and a car with a loan, contributing to your retirement accounts, and then enjoying your golden years. Although there is nothing wrong with this life path, it may not be as practical as it once was. In fact, this type of lifestyle limits your financial potential if you ask me.
The main purpose of going to school is to get educated enough to secure an income, but sometimes education can be taken too far. Getting three degrees doesn’t mean earning three times more however it does mean either spending three times the money on school or taking on three times the amount of student debt. This debt can severely impact your financial position and growth as you make interest payments and loan repayments for decades after graduating.
If you want to be rich, acquire the education you need to succeed but not more than that. Perform an assessment of the cost-benefit trade-off of your time and money when it comes to education, and if the return warrants the investment, then, and only then, should you pursue more education.
Not being able to sell yourself
Another thing stopping you from becoming wealthy is your inability to sell yourself. Selling yourself simply means the ability to make others see your worth. Everyone is concerned about what’s in it for them, and if you’re not helping them solve a problem, they don’t need you. Every successful person has learned to develop the skill of selling themselves, and that’s why they are rich. This skill goes beyond making money as it is important in every aspect of your life. For example, when you go for a job interview, they want to know what you can do for the company. If you are not able to convince the people interviewing you, they may likely not employ you.
Another area of your life where this skill is important is marketing your service to others. You can be highly skilled and still broke because you don’t know how to sell yourself. That is why some of the richest people in the world today are not the smartest people, but they know how to convince others to do business with them.
So let’s see some of the ways that you can develop the skill of selling yourself. Firstly, you have to discover yourself and identify your unique selling point. If you were to appear for an interview today, think of a skill you have that would contribute greatly to the organization. For example, if you’ve worked for a similar role you’re interviewed for, let them know how your experience would contribute greatly to the success of their organization. The same thing applies when you have a product or service that you want to market; focus on how it would help the customers if you want to convince them to buy from you.
Thinking you have to be lucky to get rich
The last element that trips people up on their path to financial success is over-estimating how luck plays into things. The statistics of the number of people that have become rich have shown that the easiest way to predict your success is never to rely on luck. People who rely on luck are those who waste their time gambling or hoping to buy a winning lottery ticket someday. Most of the richest people in the world today came from humble backgrounds, but they were willing to work hard, and as a result, they became successful.
Elon Musk is the CEO of three companies, and he works harder than all of his employees. In the early days of his companies, he was reportedly working about 100 hours a week, whereas the average worker was putting in just a fraction of those hours. Another person who has shown that it pays to work hard and not rely on luck is the CEO of Apple, Tim Cook. He wakes up very early every day, and he starts working immediately. He gets to work before most people, and he’s always thereafter most of them are gone. Think the only definition of luck is when opportunity meets preparation. Honestly, you’ll be wasting your time if you think that the only way to become successful is through luck.
In summation, if you can sidestep these mistakes, you can heighten your chances of building real wealth!
If you ever decide to forego a “real” job in favor of starting your own company, you’re bound to make at least a few rookie mistakes. If you’re lucky, most are the kind that are easy to fix and learn from.
But most entrepreneurs, in hindsight, agree that there are some things you’re better off being prepared for. Hindsight is definitely 20/20—especially when you’re the boss. Consider these lessons you don’t have to learn the hard way.
Changing how we approach and build modern solutions to personal dilemmas and satisfying intrinsic human needs is everyone’s passion.
We’ve picked up many, many useful tips and wanted to pass some knowledge along. Below is a list of 10 things we wish everyone known before creating a startup.
Solve Your Own Problem
Many businesses and failed numerous times. When you finally find success, it is because you created a solution to your own problems and turned that into a business. Many launched many new companies and websites to foster their business and help people.
Do Your Market Research Early On
Like most entrepreneurs, you must be passionate about many ideas and opportunities. Many have also launched and funded many startups only to realize later on, as they learned more about the market, that they should have done more extensive market research early on. It is important to understand the industry you are playing in, your competitors, and the market forces at play. Even more so, it’s important to understand your customers–their behaviours, pain points and decision making processes.
Be Extremely Focused
There is a tendency for entrepreneurs to try to do too much at once. But the key to success in the beginning lies within having laser focus. If your product or service solves a big problem, try to focus on a niche instead. Facebook started out as a social network for college students. Only when they were successful with that niche did they open their service to the general public.
Keep It Simple
One may think that offering customers a large number of choices is the smart thing to do. Yet, more choices lead to decision making paralysis. It is usually the company that provides users with fewer choices that wins. Examples include: In & Out Burger’s simple and limited menu, as well as Apple’s limited number of choices for most of their products. As a startup, resources are limited. Focusing on providing a simple product or service with less choices, less steps, less features may be the way to go.
Bootstrap Whenever Possible
Raising money to launch a startup is very common among entrepreneurs. In doing so, you give up valuable control of your business. When entrepreneurs had to do it all over again with their company, many decided to bootstrap. Writing the software code yourself, hosting the service with a cheap ISP and using free marketing resources at your disposal, you would be able to launch the business with your own money.
Think Carefully Before Taking Money
Whenever possible, venture capital (VC) money should be considered unacceptable except in specific circumstances where VCs can add significant value to your business. Being a young founder in your mid-twenties, you may be asked to take on an experienced CEO. Times are now tough after the dot-com crash when online advertising went from $20 CPM down to under $2 CPM. Instead of sticking with your strategy to revamp the company’s business model. So it’s better to fund your own money and it’s advisable not to be dependent on any third source.
Focus on Intellectual Property Early On
Entrepreneurs may not focus too much on intellectual property in the beginning, but copyright and trademarks are important and will be increasingly crucial in protecting one’s product, service or brand once some success has been achieved. When you launch, one of the first things anyone does was to apply for a trademark. The trademarks which have since acquired secondary meaning, have come in handy as many competitors try to encroach upon our space.
Screen Your Hires Well
Some of the worst hires have been always experienced with first few employees. Back then, people lacked the resources to perform detailed background checks. They have too experienced many fraud degree holders whom we hire unconsciously and later they prove to be a setback for the company.
Leverage Free Marketing Opportunities
As an entrepreneur with a limited budget, spending money on marketing can be a very costly proposition. When launching, many looked into free marketing opportunities. First leveraging free online resources such as Craigslist, then moving onto PR opportunities to get free media coverage for their service. A controversial product or service may shun away investors but it was a gold mine when getting lots of free media coverage.
Have Strong Agreements Up Front
One of the most important lessons to have learned over the years as an entrepreneur, is that whenever there is the possibility for misunderstanding put expectations down clearly in writing. A strong agreement with partners, investors and employees are crucial.
Dr. Kyle Hoedebecke is a Certified Physician Executive with nearly 20 years of leadership experience.
Within healthcare, he served in many leadership roles across the clinical, insurance, bio-pharma, and military sectors.
As an executive advisor and coach, he work with small/medium-sized business of all sectors.
In the startup community, he serve as a mentor and angel investor with a focus in healthcare technology, wearables, AI, AR/VR, 3D printing, energy, IoT, and bio-pharma spaces. He currently serve in advisory roles and angel investor in 40+ startups and am always looking for the next win-win situation!
In the following interview, Dr Kyle talks about his entrepreneurial & angel investor’s journey, struggles and the lessons learned along the journey.
You are a doctor, can you please tell us about your life journey?
I started off in the military, where I also received my medical education and Board Certification as a Family Physician. I did 10 years of clinical medicine (seeing patients) as well as serve as an assistant professor teaching medical students. I transitioned to a leadership role in the insurance/payor sector of the US healthcare system.
I’ve had the opportunity to employ my knowledge and skills in healthcare systems in 120+ countries and now in the startup environment as well.
When did you first discover your angel investor spirit and how it is giving feedback from life?
I have invested in real estate for 15+ years and dove into angel investing during the past 3-4 years. I really see this as an opportunity to remain on the cutting edge of innovation while simultaneously making the world a better place.
What has been the biggest success and biggest failure stories you went through?
My biggest success would be my current company Oscar Health going public 3 weeks ago. The IPO process has been a great success and will help us continue to improve the healthcare system. As there are high levels of risk involved with angel investing, my biggest failure would be from companies that have failed.
Tell us about your latest endeavor.
I have several ongoing endeavors currently. I am excited about one startup called Covimro – who has a natural molecule that has been shown effective against COVID-19 and HIV viruses. Another is called HECOLL, which has created a biodegradable fabric that also protects against COVID-19, smog (pollution), and UV light.
How did you get involved with Angel investing?
I first joined a startup accelerator/incubator as a physician mentor. I then found many amazing startups and founders who I mentored wanted me to join as a formal advisor as well. I find being an advisor and an angel investor is a nice fit where possible.
What do you look for in a startup as you evaluate it for a potential investment? I look for the “3 Ts” – team, tech, and traction.
How does someone get you excited and willing to commit?
The stronger the 3 Ts – the more excited I get. There needs to be a good balance in all 3 areas.
Besides providing capital, what additional support do you offer as an Angel investor?
I am also available for advisor roles in the right situations. My situation is unique because I have the clinical background as a board certified physician, but I also bring a strong business pedigree with 4 Master degrees. I have a background in various sectors within medicine across 5 continents and speak 4 languages.
My specialties are AI, wearables, medical devices, SaaS, 3D printing, and AR/VR.
What are the red flags for an angel investor?
There are several! Some common ones include poor/incomplete business plans, aiming for a market that is too small, no way to protect against copy-cats (i.e. a patent, trade secret, or trademark), and excessive debt.
In your opinion, what are the hurdles that keep people away from starting an entrepreneurial career?
These include fear of failure, not believing in oneself, and lack of mentorship.
What advice would you give to the new angel investors?
Check out crowd funding angel investor sites like StartEngine and Republic. Build your network of more seasoned angel investors for deal flow and mentorship. Never invest in startups more than you are willing to lose (ie If you lost ALL your money in a single investment, would you still be able to survive?).
Like the stock market, also diversify your angel investing portfolio. Lastly, do your research and due diligence!