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How An Entrepreneur Makes Money When They Don’t Have Any

How An Entrepreneur Makes Money When They Don’t Have Any

I understand what it’s like, I’ve been there myself, you have all of these big ideas that you know would work, make millions, go viral and so on, but you simply don’t have the cash to push them through. It’s frustrating, finding investment is hard, and you feel as though you’re in a vicious circle that you’ll never get out of.

But there’s hope! To make money when you don’t have any, you have to do two things.

1. Scale Down

Number one is scaling down. When you don’t have enough money, you need to have a certain mindset that can take you from location A to location B.

This mindset is made up of acceptance and compromise. Accepting the fact that you can’t go out and spend thousands on advertising, then compromising to find a scaled down version of what you originally wanted to do.

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This is where most people struggle because they aren’t willing to put out what they would call a…bad product/service. But for anyone who’s read the book The Lean Startup by Eric Ries, you’ll know where I’m coming from. For those of you who haven’t, I recommend reading it.

The Lean Startup talks about your MVP – Minimum Viable Product. This is a version of the product or service that requires the least amount of time and money spent but still does the job in a minimalist way. What’s the point in spending thousands on a new idea if you haven’t tested it yet, or worse, spending thousands of hours and wasting time you can never get back?

This is why sometimes, the one with the least money comes out on top. Having too much cash can be a burden, it makes you reckless and somewhat lazy. You begin to believe that flooding money into your idea will automatically make it work, but it doesn’t quite work this way.

Example:

Some of the best companies in the world were started from the absolute bare minimums. Take James Dyson for example. James was an inventor, had some ups and downs, but was fairly stable. There came a time in his life when he didn’t have too much cash to play around with. He had a big idea, yet couldn’t implement it.

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Instead of giving up, James turned to the MVP system and created a hoover out of a cereal box. (I’d love to tell you how). He hoovered the entire house twice and realized that his cheap product worked. This was step one complete; he worked with what he had where he stood and came up with something that could take him to the next step.

The Takeaway

I see so many people complaining about not having enough money, yet they haven’t even tried the basics. A world class website straight out of the gate isn’t realistic, but don’t worry. Just having something in place, a platform to build from is the most important factor. You can improve as you go, learn as you go and enable the business to move in parallel with your growing profits.

This system works very much like video games. You can afford better things and be granted access to more exclusive items/opportunities the longer you play and the further you advance. You don’t put the disk in and complete the game in 5 minutes with everything available to you.

Progression is progression, no matter how slow you go or from where you start, all that matters is that you’re moving.

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2. Be Creative

The second component is being creative. Instead of following a single given path, you need to search for ethical shortcuts, tricks, and opportunities that no one else spotted.

You see, if everyone is after the same goal, reading the same material and learning from the same companies, there will come a time where nothing differentiates you from your competitors. Being different, thinking differently and running as far outside of the box as you can definitely work in your favor when you’re broke.

Example:

Richard Branson may be the king of this strategy. When he first started out in business, before all of the billions, he too had similar issues in the financial department as I guess many of the people reading this have today. He needed sponsors for his new magazine, but of course, no one wanted to be associated with a new brand that had a small readership, no history, or proven results.

So what did Richard do?

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He contacted the biggest company that would get on the phone with him and told them that they could feature in his magazine for free with a double page spread. No catches, just a free advert that would point customers in their direction with no risk or money to be paid. The large company obviously said yes because they had no reason not to, it was free adverting.

So how did this benefit Richard?

Richard then went to smaller companies and showed evidence of this large company featuring in his magazine. To them, it seemed as though the larger company had bought a double page spread. Without hesitation, they all began signing up to Richard’s magazine and paying him for a feature. They must have thought, “If such a big company is doing it, then they must know something we don’t.” He used a form of social business proofing!

This cost Richard nothing but made him the money he needed to reach the next stage of his entrepreneurial journey. A simple creative thought that, for all we know, could have been the catalyst towards his billion-dollar fortune.

The Takeaway

Sometimes it’s the smallest, most simple and most overlooked features that can make all the difference. Having money is great, of course, it opens up opportunities, but there’s something about working with a small budget that heightens your senses, makes you hyper-aware to opportunity and more selective in how you spend what you have.

If you’re broke but have a great idea, never forget that you have the start-up advantage, something that larger companies have been trying to get back since they grew.

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Last Updated on June 6, 2019

The Average Retirement Savings and How to Save Wisely

The Average Retirement Savings and How to Save Wisely

Are you on track for retirement?

If not, don’t worry, I’m not sure either. I save each month and hope for the best.

Fortunately, I’m at an age where most people don’t save so I’m ahead of the curve.

But, what if you aren’t in your 20s? What if you’re near retirement and are looking to gauge where you stand?

If so, keep reading. Here’s how to prepare for retirement and save wisely during the process.

What Does the Average American Have Saved for Retirement?

Saving for retirement is tricky.

Tell someone straight out of college to save $10k a year for retirement and it’ll be next to impossible.

Make the same request to someone decades older and they’d be more likely to be able to save this amount. But, a 20-year old college student can be “financially ahead” of someone saving more than them. Why?

Age matters in your financial journey. The younger you are, the more time you have to save and put compound interest to work. As you get older and have more saving power, you’d have less time to put compound interest to work.

Here are the average savings Americans hold by age bracket:

20’s – $16,000

During this stage, most people are paying loans and moving up the corporate ladder. Your best bet during this stage is to focus on eliminating debt and increasing your income. Don’t focus only on getting a high-paying job neither.

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Instead, focus on learning via Podcasts, reading books, and taking specialized courses. Doing this will make you more valuable and give you more career options.

30’s – $45,000

At this stage, you’ve hopefully escaped your entry-level salary and work at a career you enjoy. Your earning power has increased but you now have more obligations. For example, marriage, kids, and a mortgage.

Set a plan to pay off all your debt and focus on eliminating unnecessary expenses. Leverage financial tools like Personal Capital to ensure you’re on track for retirement.

40’s – $63,000

This is the stage where you’re at the prime of your career. Top financial institutions recommend you have at least 2 to 4 times your salary saved up. If you’re falling behind, start maxing out your 401K and Roth IRA accounts.

50’s – $115,000

During your fifties, you’re close to retirement but still, have time to save. You may be helping your kids pay college tuition and other expenses. Since you’re at the peak of your earning power, max out all your retirement accounts.

60’s – $172,000

By this point, you should have about eight times your salary saved up. If not, you’ll depend primarily on social security benefits averaging $1400 per month. Max out all your retirement options as much as possible before retiring.

Ways to Save Money on a Tight Budget

The sad reality is that most Americans aren’t saving enough for retirement.

Even high-earning power isn’t enough to secure one’s financial future. You need to have the discipline to save for retirement while time is in your favor. Don’t wait for you to have a high salary to save, start with having a small budget.

First, get a clear picture of where you stand. Write down a list of “needs” and “wants.” For example, Netflix and Amazon Prime are “wants” and a “cell-phone” is a need.

Use tools like Personal Capital to analyze your spending patterns. Personal Capital allows you to add all your financial data in one place–making it a powerful option to gauge where you stand.

Once you know all your expenses, organize them from highest to lowest expense. When you can’t cut more expenses, call your service providers to negotiate a lower price. If you’re not good at negotiating, use services like Trimm to lower your monthly expenses.

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How to Save Money Each Month

By this point, you know the average amount of money you should have saved for retirement based on your age.

But, breaking this down into monthly goals can be challenging. Here are some rule of thumbs to follow:

Aim to contribute 10%–15% of your salary each paycheck. Review your progress each week.

Why so often? The reality is that life gets in our way and you will have many financial setbacks. Your goal isn’t to be perfect but to get back on track instead.

Reviewing your finances weekly lets you know where you stand with your retirement. This doesn’t have to be a long process either. All it takes is login in Personal Capital to view your net worth and check how much you have saved for retirement.

Turn saving into a game and aim to save more each month. It will get challenging but you’ll get creative and find more ways to save.

Top Money Saving Challenge Tips

To prepare for your financial future and not be another statistic you need to be different.

How?

By adopting new habits that’ll help you become a saving machine. Here are some ways you can save more:

Automatically Contribute Towards Retirement

If you’re working for a company, you can automatically contribute towards your 401k. If you’re not currently contributing more than 10%, make this your goal. Contribute 1% more today and automatically increase this amount a year from now.

Odds are that you’re not going to be negatively affected by contributing 1% more. Many times we spend our money on things we don’t need. Contributing more towards retirement is a great way to secure your financial future.

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Use the Right Tools to Know Where You Stand

Once you’re contributing more towards your retirement accounts, gauge your progress. Make use of finance tracking apps to help you view the big picture of your retirement.

When I’d first signed up for the app Personal Capital, I didn’t know I had a negative net worth. Despite saving thousands of dollars, my debt brought my net worth to the negative. Knowing this motivated me to save more and spend less.

Now, I have a positive net worth. But, it was because I was able to view the big picture using the app. Find out what your net worth is using a finance tracking app and you may surprise yourself.

Bring in Experts to View Your Blind Spots

If you have too little or too much money saved, you should consider hiring financial experts.

Why?

You may need someone to hold you accountable to help you reach your financial goals. Or, you may need help managing your money as effective as possible.

Regardless of the reason, getting help may help improve your financial situation.

Before you hire an expert, find out which areas you need help the most. For example, if you’re constantly overspending, find a debt counselor. If you’re struggling with choosing the best investment options, hire a financial advisor.

Speed up Your Retirement Contribution

After learning how to manage your money well, the next best thing is to earn a higher income.

You’re capped at how much you can save but not much you can earn. Even if your employer isn’t giving you a promotion, you can still take charge of your financial future. How?

By starting a side-business.

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This will be something you’d work on after you’ve finished your day job. Once you start earning income from your side-business, you’ll be financially better off.

The best part is the more work you put into your side-business,[1] the more potential it has to earn more money.

So start a side-business in an area you’re familiar with. For example, if you enjoy writing, do freelance writing for small e-commerce businesses.

Once you’re earning a higher income, you can contribute more towards your retirement. Don’t wait for the right opportunity to secure your financial future, create one.

Reach Financial Freedom with Confidence

What if you were able to retire tomorrow with no problem, all because you’d have enough money saved up and little to no debt left to pay off? How would you feel?

My guess is that you’d feel happy and relieved.

Most Americans are falling behind their retirement goals for many reasons. They’re not prepared, they carry bad money-habits and are thinking short-term.

For you to retire successfully, you need to work backward and adopt better habits. Contribute more towards your 401K and focus on growing your income.

If you do, you’ll save money and pay debt faster.

Don’t beat yourself up if you’re behind your retirement goals. Take the first step today towards a brighter financial future. Isn’t retirement worth the hard work and sacrifice to be at peace?

Featured photo credit: Huy Phan via unsplash.com

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