TMBA 144 (LBP127) – Generating Wealth and Re-Considering Retirement for Entrepreneurs

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TMBA 144 (LBP127) – Generating Wealth and Re-Considering Retirement for Entrepreneurs post image

Dan and Ian are homeward bound. Ian just got back San Diego and Dan’s headed to Bali for November to write his first book.

Chiang Mai Sunday Night Street Fair

Both still coming down from the high and energy of DCBKK, they wanted to tackle a tough question on the real meaning of wealth and  entrepreneurship. Everyone knows that society has certain scripts and most people blindly assume the numbers support those. Dan and Ian sit down to look at the facts of a 20 year trajectory for a professional job vs. an entrepreneur and then look at how they and their network got there.

Generating Wealth and Re-Considering Retirement for Entrepreneurs

  • The Best Financial Investment almost no one in the Media is talking about
  • By the numbers: exits from a 100k corporate gig vs. entrepreneurship after 20 years
  • How do entrepreneurs define wealth?
  • Warren Buffett vs. Mark Cuban: The Philosophical Cage Match
  • 10 Years to Compounding Ballerdom
  • A realistic look at entrepreneurial failure

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Episode length: 32:41

 

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Published on 11.01.12
  • http://essentialsoftheonlinebusiness.com/ Chris (Krzysztof) Trynkiewicz

    Regarding the Quatar Expat site: you need a tagline and some solid content on subpages. You may want to import them from your blog or something.
    That aside, here’s the real deal: if you start a forum or a social networking site, either you already have a huge following from your blog (let’s say 2000 blog subscribers would be enough) or you *MUST* talk to yourself on different accounts or hire someone to do that for you. Nobody’s gonna stick around on a deserted forum of any kind. That’s how it is, man. Sorry and good luck!

  • http://www.facebook.com/matjnewton Matthew Newton

    I was just about to write a comment about James Schramko selling Mercedes to small business owners. Then Dan mentions him. I love that story and it’s so true.

    I often try to explain my quest entrepreneurship to people by saying “if you build a business, it’s a job you can sell.” Great way to build wealth.

  • http://www.JiansNet.com/ Jian

    On building Quatar Expat site, I think if you already got some experience in blogging, why not keep doing blog(s)? Making a forum type of site is tough as it is sort of chicken and egg problem. Don’t expect people to contribute as there is simply no economic incentive to do that. To do such a site, like Dan and Ian mentioned, you just have to put in the work to have good content first.

  • http://www.tropicalmba.com Dan

    Interesting thought here Jian. If Ryan swings by I also failed to make another distinction which is important and speaks to Ryan’s second question (wish I would have done a bit better job here)…. it’s that you are targeting an industry so to speak, not a geographic location… that’s to say, you can’t target a “demographic” … that’s corporate speak, you can only target a cash flow. Cash flow = market… so that’s just a theoretical way to say, find the money! and build compelling and useful content/contacts around that.

  • http://www.tropicalmba.com Dan

    I like that turn of phrase sir!

  • http://www.tropicalmba.com Dan

    +1 on the tag and clear subpages regarding what the first set of users can get out of the site. I also like the self-talk hustle. That’s some funny stuff… we all have to do it ! :D

  • http://www.JiansNet.com/ Jian

    Hi Dan,

    You are always to the point, thanks man ;-) Totally agree with the cash flow/market thinking. Through the couple of years I’ve spent doing a site, that’s probably the most important thing I realized in the past year or so. (I wish I would have realized that when I started, sigh).

    It seems to me the best combination for doing a site is, follow your passion AND follow the money.

  • http://twitter.com/Mck_Dave David McKeegan

    Dan/Ian – like the chat re wealth and retirement, but you forgot one key bit – choosing to be an entrepreneur does not mean you can’t also save for retirement (or buying a house or putting your kids through college). In some ways its even easier as an entrepreneur! If you have a US business entity and you travel through SE Asia you can earn the $100k nearly tax free thanks to the foreign earned income exclusion, although you would likely need to pay self-employment taxes in the US. You could then set up something like a SEP-IRA, which allows you to contribute 25% of your salary up to $51k per year pre-tax. So you can put $25k away, pay SE tax on the $75k (about $12k) and take home $63k, which would be about the amount earned by the equivalent “worker” at a desk job in the States paying federal and state taxes. So you can save more and keep more!

  • http://www.facebook.com/jamestolf James T Tolf

    Talking about the figures long term makes this a great episode for mindset. Goes with the maslow hierarchy of needs if you work on yourself (your craft) the better life can become for you and those you interact with. Self actualization baby!

  • http://dannyfries.com/ Danny

    Hey Dan and Ian, I really enjoyed this episode. The comparison of investment vs self investment – Buffett vs Cuban – was great. “Even if you fail, you spent the last 20 years doing what you want on your own terms.” It’s also the idea that you’re constantly putting the responsibility on yourself and beginning to trust your own judgement more and more.

    That conversation reminded me of this quote by Owen Cook. Used in the context of social relationships and dating but the idea is the same:

    “Let’s play the game of what if… What would happen if you guys did play the game of society? Let’s say that you played it to the hilt; you realllly played it good. You have the looks, you got the money, you have the respectable job – everything… If you’re going going by other people’s standards, as in you’re looking for other people to tell you what you value, you will always come up short, that’s the bottom line. Even if you do life up to other people’s standards – *guess what* – even if you do live up to other people’s standards, you’re still a dumb chode that tries and spends his days living up to other people’s standards.”

    I reached a point where I said, it’s insane *not* to do what i want. At that point I truly stopped caring what other people think.

    Best of luck with the book Dan, can’t wait to check it out when it’s done.

    -Danny

  • http://twitter.com/ReadTree ReadTree

    Great episode. Tough to hear on a Monday morning at work. Maybe you can help me…this is where I’m always to scared to take the leap:

    I get that it takes 5 plus years to develop a real business in most cases, so do you recommend quiting a 9 to 5 even if you don’t have a great idea or a business on the side making money And just emmersing yourself in that Entrepenuer lifestyle? Or do yiu recommend quiting a job when you realize the side business can scale? Because 5 years to make any real money makes it hard to understand how anyone could pay the bills? I’ve been working on the side making websites for friends but scared that when I quit my job ill be like great now wtf do I do? Next step now is find a 9 to5 more in line w website creation. Thanks buddy hope I do t sound like a winer just know ull shoot me straight.

  • http://phoenixabroad.com Dave Huss

    I think it depends on your risk tolerance and obligations. The lower your risk tolerance and the more obligations you have (family, debt, etc) the longer you have to wait. I think Dan/Ian called this “escape velocity” on an earlier podcast.

    Some people just dump the 9 to 5 right away, hustle hard and hope for the best and it works out more often then not. Easier to do if you are a single 20-something.

    Your question hints that your risk tolerance is not so high, which is ok, I think you just need to define for yourself what level of income your side business would need before you dump the 9-5. And that actual level is probably lower than you think it is. Have an emergency fund of 6 months living expenses in a cheap country makes it even easier.

  • http://twitter.com/ReadTree ReadTree

    Thanks Dave, that makes a lot of sense. I’m sort of in the middle (28 no kids married) w savings so risk tolerance is somewhat high at this point. But confidence is low, struggling to make any $$$ online right now. Gotta keep grinding and it will click that’s the additude I am taking.

  • Joseph Hughes

    ReadTree – I made a very similar jump in July of this year. Left secure 6-fig 9-5 to venture out on my own. 31 yrs old, married, 1 kid so I definitely have financial responsibilities to fulfill. While you’re in cubicle land, build up a good chunk of savings, and it helps if your spouse has some income to help out during the build-up phase. In my experience, it’s extremely difficult to build a solid side income while working a corporate job. I moonlighted for about 6 months before taking the leap, and I found that I hit a ceiling as far as how much time I could dedicate on nights/weekends with the side biz. However, while you’re at your corporate job, put as many pieces in place for your new venture as you possibly can. Have a plan for how you’re going to acquire clients, how you’re going to do the work, people you may bring on (employees or contractors), how you’re going to scale, revenue and income targets, line up possible business alliances, talk to people in the same line of business, build your network, optimize your site, etc. My advice would be to cut back on building websites for friends for now and use that time to get these things in place so you can really hit the ground running when you take the entrepreneurial leap. Building sites for friends doesn’t scale (I know because I did it). Focus on the activities that are going to enable you to scale your new venture. It may take a few months, but if you lay the foundation properly have a long ball view, you’re golden. Hope that makes sense.

  • http://twitter.com/codymckibb Cody McKibben

    Dudes this is absolutely one of the best episodes you’ve ever done. Thanks for this, made me feel very reassured about what I’m doing! I think everybody needs to hear this stuff. Cheers ;)

  • http://www.tropicalmba.com Dan

    Thank you Cody!!!

  • http://www.tropicalmba.com Dan

    Great stuff Joe, as always …. LONG BALL.

    I like your story too Joe because you left a very good job, but there’s also a lesson there. You weren’t just at some dumb-ass 9-5… your job taught you some killer skills which really helped you out with your own business, in that sense your job was hardly wasted time but it gave you the platform and runway for your own business.

    I highlight this fact because that’s the same case for Dave Huss (above) and myself– if you’re 9-5 is irrelevant to your future trajectory, you flat-out cannot afford it. Your time investing in relevant skills and experience is too important to wait until you have enough energy after work to hustle. My recommendation is as always– it’s never been easier to get a “good” job working for a small business or entrepreneur… go get one and start “training at altitude.” If I didn’t work for an entrepreneur for 3 years I would have had a very difficult time running my own business.

  • http://www.tropicalmba.com Dan

    Hell yeah Danny that’s a great quote man. I love it.

  • http://www.tropicalmba.com Dan

    rockin’!

  • http://www.tropicalmba.com Dan

    OH HELLS YES!!! We weren’t 100% clear on this and we should have been… I was trying to lay out worse case scenarios (and how how they were still good), but I 100% agree that you need to rock this stuff hard as an entrepreneur AND also that it is easier to do so. In fact, the methods behind this are worth a whole episode. I’ve copied your comment into our show notes.

  • http://digitalscrapbookinghq.com/ Melissa Shanhun

    Interesting episode, it makes me think that even for those in a J.O.B. should make at a minimum a career move that will allow them to enjoy their work. On the location vs money, now that my hubby has spent time in SE Asia, he feels like the pollution has taken a few years off his life! :)

  • http://digitalscrapbookinghq.com/ Melissa Shanhun

    Interesting episode, it makes me think that even for those in a J.O.B. should make at a minimum a career move that will allow them to enjoy their work. On the location vs money, now that my hubby has spent time in SE Asia, he feels like the pollution has taken a few years off his life! :)

  • http://www.tropicalmba.com Dan

    ha probably true! JOBS are the most underrated way into entrepreneurship. :) You can tell if somebody is going to be a good entrepreneur (a lot of the time) by the way they rock their jobs.

  • http://www.tropicalmba.com Dan

    ha probably true! JOBS are the most underrated way into entrepreneurship. :) You can tell if somebody is going to be a good entrepreneur (a lot of the time) by the way they rock their jobs.

  • http://digitalscrapbookinghq.com/ Melissa Shanhun

    I’ll put you to the test on that one then, hey? I was an awesome employee if I do say so myself! :)

  • http://twitter.com/ReadTree ReadTree

    Great stuff guys thank you. I have updated all my profiles (LinkedIn. Resume, Facebook etc.) to position myself as someone with not only the technical skills required but contractual experience that can save companies money though negotiations, contract creation and running a client base and Manufacturing process. So far I’ve networked through the DC, indeed, LinkedIn and reaching out to whoever I can. I would die for a job working with an Entrepenuer or small business in st louis that would help align my job with my passion/goals.

    Thanks, if anyone has any opportunities please contact me @readtree

  • http://twitter.com/ReadTree ReadTree

    And not mention that for some reasons making sites for friends and family it’s awkward to charge them :)

  • DT

    David,
    I am glad you brought saving for retirement as an Entrepreneur and SEP IRAs. Just a note, as you probably know, a SEP IRA is an employer funded plan, meaning you have to contribute to your employee’s accounts in the same percentage as your own. This may get expensive if you have employees, especially if they are highly compensated. Another option, if you have employees is a SIMPLE IRA. This is employee funded with a small employer match. Bottom line a retirement plan is one of the biggest advantages of being and entrepreneur.
    DT

  • CameronBenz

    Awesome episode! I’ve been absolutely drowned in information since since I found you guys last week. And, because of you guys, also found Schramko and Ogle. Just incredibly awesome!

    What Ian points out with the auto racing is spot on. Every year there’s an off road race in California called King of the Hammers (KOH) and most of the front runners have businesses. Tony Pellegrino placed second a couple years ago. His business? Genright Offroad. He told me they had $100,000 just in parts in the trailer and that included at least one spare engine. Another competitor who placed well last year, Larry McRae. He owns Poison Spyder Customs. So, I definitely know what Ian is saying.

    As jobs go, I have a relative who is a Dr. Of Pharmacy and manages 2 corporate pharmacies. Is she happy? Not even remotely. The only part of it that she’s liked is having the money to go on vacation wherever she wants.

    Look forward to listening to you guys some more and I definitely at least need to visit SE Asia!

    Cheers!

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