Episode #47 – Talk About Money!

In this podcast we talk about how to:

Think like an entrepreneur

Talk about money

Share in the decision-making

Welcome to another wealthy and wise Wednesday, I hope you and your family have been doing great and had a productive week and speaking of family, let’s talk to us a little bit about family and how those dynamics work. You know I probably in some respects [00:00:19] my kids and what I mean by that is I really encourage them to find their own paths and to be productive, more entrepreneurial maybe I guess it is the way to say it. They never see me with a we will call it an 85 real job so to speak and as a result, I have tried to encourage them to you know learn and grow and build your own businesses and your own path. So there is a good and bad to all that but each one of our kids now have their own businesses and in different various fields, they have got really good at marketing and they have got really good in education and they have got really good at. not just you know building businesses and then selling them and again for many of these might be a curse because there is a lot of people who just wants that stability of a paycheck every week, knowing what is going to happen and build a plan for those kinds of things.

[00:01:40] As we talk about the different things we do as financial advisor so to speak, obviously the banking system being one of them, I really will like you think more like an entrepreneur. And that doesn’t mean you need to run out and open up a business and do all that stuff but there is a way entrepreneurs think that I think it’s really critical in helping to build your wealth. One of them is they just kind of break with current philosophy or current traditions and they are always looking for a new way to do things, they like new approaches, they accept a little bit of risks when looking at this new approaches. I often think of Shark tanks, have you ever watched Shark tanks on TV, so here we got a bunch of entrepreneurs, business owners, people who have kind of built themselves from scratch but the risk they take isn’t just flipping, it is very calculative. If you watch them run these people who come into shark tanks, if you watch and run them through their paces, the financials, the productivity, what is their product solving? I mean they just get to the nitty-gritty. I have actually read some articles that talk about how I mean it is much more extensive than we see on TV. The number, the statements, the financials, the [00:03:19] all the different things they have to bring in to prove their company’s worth and numbers.

[00:03:29] Very in depth and as a result when you watch these guys, the sharks on TV, we know that they are entrepreneurs, we know that they take measured risks but you will see that they just don’t throw money at everything. I don’t know what the statistics are but it seems like on a particular show, they turned down maybe four and accept one. So about a 20% acceptance rate maybe I don’t know. I don’t know what the real numbers are overall. But the idea is they really understand, they run the numbers and again take some measured risk and we all need to do that as well. The banking system is awesome and it builds a nice foundation and a great capital base but we also want to take some advantage and look at some opportunities as they come along and so we are going to talk a lot more about this. In fact, I am building another course on just the opportunities/investment side of things.

[00:04:35] But I guess what I want to encourage you to do is think more entrepreneurially, that is a good word, hard to say. And try to think of things that would have a new approach or where you can see opportunity. Maybe you do want to open a business, maybe you do want to do something kind of exciting like that, maybe it is just what in your sphere at work, just looking at how the business run and maybe you have got some good ideas and some ways to do things better. So again just kind of think more entrepreneurially. The only thing that I would encourage you to do is talk about money and maybe even to family in extended family. Talking about money, there is a lot of things that you learn, the expectations, you know if I look at our kids, we have five kids and each one of them has a little bit different risk tolerance with money and each of them wants to take on different challenges and you know I will be the first to admit sometimes when we talk about business and money and ways to do things and also can cause a little bit of contention because we have a lot of chiefs and not enough Indians, I don’t know if that is a politically correct way of saying things these days but the idea is we have a lot of bosses and not enough workers and which is great and it is fine and I enjoy but what we end up doing sometimes is we have very strong opinions and it can get quite exciting. In fact it is so exciting that I am contemplating on doing a podcast with our kids and bringing each one of them in at different times, talking about what they are doing and everything because and again not that we are the model family in the whole world but it might give you a sense of some of the things we talked about and why some kids are just more prone to wanting to run their own shows, make their own way so to speak and others are more content and just being you know part of a good productive system.

[00:06:53] So anyway the idea is talking about money a lot, it talks about the expectations, you know how to be financial successful, you might proactively talk about lessons that you have learned mistakes. I get teased a lot because of some of the mistakes that we made on investments, maybe being a little too aggressive or reading into something that was going to be you know much greater than it was and getting caught in the wrong market cycles and so my kids never let me forget those lessons learned but they are a good lesson to learn I feel because it has made me a much better investor, much more sharkish if you will. Where we really now run numbers and get down to the nitty gritty before we make any kind of an investment decisions. That is what you should be doing as well and this shouldn’t be a time where you know, you pound and preach, and you know all that good stuff, all you really trying to do is open up a wonderful conversation about you know money and business, investing and again how you find success and what is success.

[00:08:14] You know for some, success might be just hey all I want to do is own a home, have no bills, have no debts and have enough income to enjoy life. Other successes, I want to build this big business, I wanted to affect and help million people. So there is different avenues and different definitions of success, it will be fun for you I think to learn and to talk about these things with families, with extended families, spouse and just you know talk about money. The other thing you might consider doing is, I don’t want to say democratize decision making but basically talking about decisions with more than immediate family. I don’t know how far out you want to go with that but talk about you know collaborative ways that you can be much thoughtful, more unbiased and more you know just making these financial decisions together if you will and especially when it comes to some of the bigger investments and decisions that you want to make that might affect not only you and your current generations but even future generations. I remember when I was a teenager, I had this really good friend and her dad actually went to all the kids and he said essentially this, he said look we have got this little pile of money here and this is to be used for your college education, it is kind of used for an emergency fund and so on and so forth.

[00:10:03] But he said and wow I think they had six or seven kids, it was big family at the time, not a lot of money, I think he was a CPA, so he was fairly conservative. But anyway, he sits all the kids down and he said that here is the deal, I am really interested in making this investment in one of the Southern states, I want to say was Texas and I want to make this investment in this, it was essentially a medical office building complex and he said here is how it is going to go down. This is either going to be a very successful venture or we are going to be eating beans and rice and your college education is gone and so this kind of at least of good example of making a decision as a family because he put it and these kids were teenagers, the youngest one is probably 11 or 12 and the oldest one might have being 18 or 19 but kind of laid it on the table, we are going to make this investment decisions and if it goes well we are going to be in really good shape and if it goes south well you are going to have to figure out how to go to college on your own and together collectively they made a decision to make the investment and it turned out wonderful. I mean it made this family a very wealthy family.

[00:11:44] Not suggesting you roll the dice, I am not suggesting you come in and find this one thing that is going to take you to [00:11:52] what I am suggesting is maybe some of these financial decisions could be done more of a financial basis. So that is kind of my thoughts for this week on this podcast, so think like an entrepreneur, look around, see if there is a new approach, are there some measured risk that you can take if you do the shark tank kind of philosophy which by the way is Warren Buffet philosophy, the Charlie Monger philosophy, our philosophy where you really understand investments, it is a predictable investment and so on and so forth. But think entrepreneurially because as you build up your capital depending on your age and what you are trying to do in life, there might be some opportunities you want to take advantage and second thing again talk about money, talk about business, talk about opportunities and all that good stuff and then maybe finally make some decision making more extended with your family so that they feel involved and that you all learned some good lessons together.

[00:12:56] I got to say one more thing on that, for the most part, my wife always let me make those financial decisions in those times when it would have been very wise for me to talk more about these financial decisions with her and even her kids because they got very involved in business and money and so forth very young and I remember one time. Sorry little one more thing real quick for the podcast things but I remember this particular time, it was in the 90s, the .com boom and we have being participating in some of these great returns of companies that are no longer here and it was just a feeding frenzy for .com but we have just I mean quadruple money, it is just easy to make money. And I remember telling her one day, hey, you know did you know we take this much money and now it is worth this much money and she said wow, that is pretty good, why don’t you just sell a good portion of it or all of it and let’s just you know be financially set for life? And I you know the all-knowing kind of laughed at her and said what do you mean this is going to be worth even more ten years from now and lo and behold it was literally the peak of the .com era and had we sold out of that, we would have maximized the absolute best day of the total .com run and it did nothing but go down from there and we were lucky to get out with our original investment.

[00:14:44] So, sometimes it would have been really good to make this financial decisions on a more family basis, so anyway try a little of those things, it might be fun to sit down at dinner and talk about money and business and what kid want to do and see if they have got an entrepreneurial flare and I think you really enjoy, I know we do even though like I said sometimes it get a little bit more than what we all bargained for but it is a lot of fun and I know the kids are learning and growing from there. So that is it for the podcast, hope you have a good productive week, I will talk to you next week and until then if you have any question, you can always reach out at questions@wisemoneytools.com and we will answer them just as quick as we can. That is about it, talk to you soon, take care.

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