Last week I put a random LinkedIn post up about a book I’d just read, given to me by a financial planner we refer our clients to.
The ideas in the book were so awesome that I knew every one of my clients had to read it, and that really every business owner ought to read it too.
My post got over 5,900 views and a ton of likes and comments.
This is not usual in my world! So, I knew I’d hit on something that a lot of people resonated with.
The book is called “Enough? How much money do you need for the rest of your life?
By Paul D Armson
You have to read it!
But you know, just in case you don’t round to reading it I want to share the most powerful ideas and statements from this book.
(What am I saying? Of course, you’re going to read it, you’re serious about your future aren’t you?)
Because there so many powerful ideas in this book, this post is a little longer than usual, but make sure you read to the end where the most important lessons are for you as a business owner!
When is One Day?
The book talks a lot about the things we promise ourselves we’ll do One Day. How we keep putting things off that we’d really love to do.
Because we’re afraid we can’t afford it.
So we say One Day.
But we don’t know how many days we have left, we keep acting like we have forever, whilst our precious time is slipping away. Intellectually we know life isn’t a rehearsal but we often live like it is.
Obviously, the work I do centres around the finances of a business and its owner, but like I’ve always said, this isn’t actually about the money.
It’s not about helping someone to get rich (how soulless would that be?) but it’s about helping people to do what they want to with the life they have left on this planet.
Because to live well, achieve the things we want to without a life full of financial stress and uncertainty, we need a profitable and well controlled business, with a financial strategy that ties directly to what we want in our personal lives.
Finding Your Number
When you’re planning your future, you’ve got to know Your Number. That is the amount of money you need in your pot to get you live the life you want, without that pot running dry before you exit stage left.
If you have or want a Big Lifestyle then you’ll need a Big Number.
Most people have no idea where they’re heading financially
How differently would you live your life if you KNEW you were going to be more than ok financially?
If you knew Your Number.
Most people, even business owners, don’t know how much money they need for the lifestyle they want to lead in the future. They most commonly employ the “I’ll just work really hard and hope it works out ok”
But it’s very enlightening when you know Your Number. It puts you in control, and gives you the freedom to live life smarter.
You can have a lot more fun at 45 or 55 than 85, so the sooner you work out Your Number the better. Otherwise actually living life gets pushed back to “some day”
How would you live your life if you didn’t know you’d be ok?
You’d probably worry about money, and not do the nice things you’d love to do.
Which money type are you?
According to the author, there are just 3 types of person when you look at their financial position with their investments, income and lifestyle
- Not Enough – their money is going to run out before they do
- Too Much – they have more money in their pot than they need or could spend with their desired lifestyle.
- Just Right – they have just enough money for their future
The challenge with each of these is that most people don’t know what money type they are.
So they might be a Not Enough, but if they don’t know, they can’t do anything about it and will run out of money one day
Sometimes the Too Much type don’t know they have too much and are living with financial worry, putting off the things they want to do. Not living they life they want and leaving much of it behind, which could mean a big inheritance tax bill.
There’s a great story in the book about a business owner holding out for the sale price they think they deserve whilst selling their business. Living under huge stress from the business – like many, their business was slowly killing them. They didn’t know that a lower offer would give them more than enough to do everything they wanted to, and still not run out of money.
All because they didn’t know their number.
They didn’t know what was enough.
And the Just Rights usually don’t know either, and are locked in financial fear about their future. Imagine how differently you’d live if you KNEW you had ENOUGH?
This is why the book is called ‘Enough”
When you know what Enough is, you can make smarter decisions. Not falling into the trap of never having enough, and having life pass you by whist you slug it out at the office.
When you know what you want, and you know where you stand
When you know where you are now, you know what you want for your future, and you know if you have enough or not, you’ll be in control. You can plan. From a place of certainty.
And your mind is incredibly good at finding ways to achieve things, once it knows what you want, and what the problem is.
Then you can set about designing and creating the life you want.
A life worth living.
The killer lessons for business owners!
Pricing in your future
You may have read last weeks’ blog post about putting your prices up for inflation.
But did you realise that your future is an overhead, probably the most important business overhead you have. One that you have to build into your pricing?
You’re running and building your business to secure your future, so of course your business has to pay for it. This means putting Enough into your pension RIGHT NOW, not One Day when you can afford it. You have to afford it now. And of course this means you have to find out what Your Number is, so you know how much you need in your pension.
If you’re business can’t afford what you need in your pension then you haven’t priced it in to your selling prices.
I know, I can hear what you might be thinking…..
But I don’t need to put much into my pension.
I’m going to sell my business. For Millions. I won’t need to worry about a pension.
You can’t rely on selling your business
Now I bang on about this a lot, so I was delighted to see the author write about this so passionately.
You CANNOT rely on a business sale as The Way you’re going to secure your future.
Well you can, it’s your business and your life, but it’s very risky.
A business sale should be the icing on the cake. Not the cake.
And because this topic deservers more attention I’ll write more about this next week. I’ll explain why many businesses will never be saleable, and what factors will massively affect how saleable it might be and how much you might sell for.