One of the greatest traps for entrepreneurs or, indeed, anyone who has embarked on the journey of wealth-creation is the “shiny things” that distract us along the way.
We have all been there; it is part of the learning curve. You start out with a solid financial plan or business strategy and begin working towards your goal. Then you spot an opportunity that distracts you from that plan. Your mentors will advise against it. Your family, peers, and fellow-entrepreneurs will question the wisdom of pursuing this short-cut to riches.
However, you remain undeterred. The opportunity looks too appealing. It can get you to your goals faster, and it looks so much more fun than what you are doing now. So you think, ‘There is nothing so foolish as conventional wisdom. Let’s go for it!’
Invariably these deviations end in tears. As I write, I know that many budding entrepreneurs who read this will ultimately disregard the advice and choose to learn the hard way instead. I take no pleasure in the painful lessons you will learn but keep faith and know that you will come through it. Perhaps poorer but wiser for the experience; I know I did.
And so I write this with the benefit of hindsight. Having disregarded similar cautions from my own mentors and advisors in the past, I too had to learn the hard way. My lesson cost me tens of thousands of dollars and two years of sleepless nights and angst.
The lesson itself is simple. Put your assets to work, be consistent and let time do the rest. Yes, you will learn lessons (i.e. lose money) along the way but you can minimize this if you keep things simple and stop chasing the new shiny opportunities that distract you from your core strategy.
To help with this lesson, I thought I would turn to Proverbs in the Bible for wisdom.
Those who work their land will have abundant food, but those who chase fantasies have no sense.
Proverbs 12:11
In the context of wealth-building, the land in the above verse represents your assets.
For the purposes of this lesson, I am working on the assumption that you have already taken steps to break Mammon’s (i.e. Love-of-Money’s) hold over your life and that you have:
- Dealt with materialistic greed
- Suppressed your fear of loss and
- Gained control of covetousness and envy
As such, you now find yourself with surplus cash and have begun to invest this in assets that will grow and ultimately produce additional passive income for you and your family.
Work Your Land
Putting Proverbs 12:11 in the modern context, for those of us who are not farmers, we could interpret this to say those who work their assets will have abundant food.
I have two take-aways from the first part of this verse:
- The proverb assumes that the reader has an asset, or assets.
- The proverb suggests that the reader put those assets to work.
Work your land! In other words, put your assets to work. In the Old Testament context, they did not have Equities, Options, Derivatives or the myriad of Financial Instruments we have available today. Land and livestock were the main assets of the day.
And then the promise. If you work your land, or put your assets to work, you will have abundant food.
There is a flip-side though. Those who chase fantasies have no sense. The verse doesn’t actually say those who chase fantasies will starve. It merely points out the folly of chasing fantasies. But the implication is certainly that you will not have abundant food as you would if you work your land.
These fantasies can take many forms. In the business context, this usually looks like a great opportunity that offers huge returns and is something you know little or nothing about.
The most common is Get-Rich-Quick schemes that promise outlandish returns for a small initial investment. These cons abound and we would be wise to avoid them.
In the business context, these fantasies are often less obvious. They often present as business opportunities that offer a high ROI (Return on Investment) but detract you from your core business. When these opportunities present, ask yourself these questions.
- How well do I understand this business opportunity?
- Does this fit with my current strategy?
If the answer to these questions is no, pass up the opportunity and focus on your main business or investment strategy. In other words, work your land!
My wife and I came across one such opportunity to invest in an animated film venture. The team put on a great presentation and used an anticipated crash in the property market to entice investors into this new asset class. The sell was hard but my wife and I stood our ground. The main reason we chose not to invest was that we knew nothing about the business-end of the film industry.
I’m glad we passed on this opportunity. Some people we knew put thousands into the venture and lost all their money. I have never heard of this company since and certainly not seen any animated motion picture they produced.
In the early stages of wealth building, the biggest asset we often have is disposable income from our salaries. At this point, the temptation is to start burning this money on every opportunity that presents. We need to understand that everyone will have a few false starts and some money will be lost.
However, once you have hit on a winning strategy, stick with it. Yes, you will feel frustrated at times as growth is slower than you might like. This is simply because you are starting from a small base. Stay the course and work your land!
Sometimes it helps to remember that we are not building wealth for ourselves but for God and his kingdom … and God has all the time in the world. As long as your strategy is working, stick with it.