Tuesday, June 14, 2011

mythbusting financial lies

Interesting show on the Survival Podcast yesterday. The guest was M. J. Demarco, of the Fastlane Entrepreneurs website. I seldom find really practical financial advice with these 'fast-lane-big-scheme-get-rich-quick' guys, but he said one thing that absolutely resonates with me.

In the discussion about financial and business myths, he touched on the one about "doing what you love and you'll be successful". That statement has irked the piss out of me for a good long time. I've been doing what I love for many years, and, well, here I am. Love, passion, your "dream", etc. has  nothing to do with wealth or even basic financial success, and in fact, can blind you to market realities.

Yes, having a business is the only way to grow wealth for a living, as opposed to being an employee. However, as Demarco clearly states, not just any business is going to work if your goal is to become wealthy. It has to be something that fulfills a need of the consumer, not just the passion, interests, dreams and needs of the business owner. This is so true.

Demarco states correctly that "the strongest success factors with a company always lie in the product", and that you need to come at this with the mindset of a producer, not a consumer. If your business is all about what YOU want, it could be totally irrelevant to what other people need — and at the very least, that will cause you to spend a lot of money marketing your product or service. Market needs are key.

It's a very optimistic, rosy view to say that anyone can start a business and become a millionaire, let alone achieve ordinary financial balance at 30.

There is a huge amount of luck and timing involved in bringing the right product or service to the public at the right time. A small mom-and-pop shop is not going to make anyone wealthy, so it's important to keep your financial expectations and goals realistic. A very small niche market business (like mine) is much more vulnerable in an economic downturn than something that appeals to a large spectrum of the public. You must have a strong product with a very broad appeal.

I would also add: a fact that I have learned the hard way is that the first order OF BUSINESS is that you must be passionate about DOING BUSINESS. All that crappy stuff, marketing, paperwork, etc. — that's the MAIN PART of your business day. If you aren't good at this, you are not going to be successful.

I have never been motivated by money, but financial stability would be nice. Not being in foreclosure would be nice.

Not that anyone is asking for my advice, but I'd say keep your passions at the hobby level for your personal fulfillment. When you make that first million off your real, viable business, you'll have a lot more time to pursue them.

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