Friday, August 31, 2012

Money Musings

I was in class listening to a lecture recently being given by a featured speaker at my college. This guy was the CEO of a pharmaceutical company, and he had spoken to a large audience at a convocation in the theatre earlier that day, but now he was in my economics class. He told us many inspiring stories about his journey through life and how he built his career, and he said something which struck me, and it was this: "Entrepreneurs are different, they see the world differently. I'm not an entrepreneur, I want a job. Whenever I look at entrepreneurs, I see risk, but for some reason they either don't see it or it's just not that big a factor to them. They're a totally different kind of person."

I was reflecting on this while I was putting gasoline in my car the next day, and I realized that he's right and wrong. He's right that we (entrepreneurs) see the world differently, and it wasn't until I heard that lecture that I realized just how different I am from my classmates. But he's wrong that entrepreneurs can't see the risk in starting their own business, and he's wrong that it doesn't bother them. Of course we see it, and of course it bothers us. I think he was missing the following three ideas:
1. Entrepreneurs engage in risk management. It's not that the risk doesn't bother us, we just realize the life is a risk. You don't get anywhere without trying and failing. Failing at something is generally how you learn how to do it. You have to fail and learn what not to do before you really get good at it or start succeeding. Entrepreneurs have a way of looking at the world that says: "I know it's risky, but it's a risk I'm willing/not willing to take" instead of, "that's risky, I'm staying away from it."
2. Entrepreneurs choose freedom over safety. It's at the very foundation of American society. As a famous quote from a founding father goes (I believe it was Benjamin Franklin): "Those who choose safety over freedom will recieve neither," or something along those lines. The only way you can really make your own decisions and take control of your finances and your life as an entrepreneur is to take on the responsibility, take the risks. Entrepreneurs also realize that the more risks you take, the better you get at deciding which ones are good ones, and which ones aren't.
3. Most entrepreneurs think the word "job" is an acronym for "just over broke." Most entrepreneurs realize that having a job is actually much riskier than owning your own business. Everyone is in the business of selling themselves, or more acurately, their time, knowledge and resources, it's just  a question of who your going to sell yourself to. You can get a job, and sell yourself to one client. That client will have a lot of power over you, because they know you're their only client, and you consider yourself lucky to serve them. Or you can own your own business, and have many clients. For example, if I become a band director for a school I have one client: the school, and they can influence the amount of money a make through a single paycheck. But as a private teacher, I have many bosses. All the student's parents (or sometimes students themselves) are the ones collectively in charge of my paycheck, and if one decides to stop contributing to my salary, I can easily find another person to take their place without doing a lot of job interviews, and without having to uproot my family to move to a different town, and without worrying about how my bills are getting paid, because one client isn't going to make that much of an impact on how much I am earning.

I wish they taught us this stuff in school.

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