I received an email from a young person who may be on the verge of receiving a large inheritance.
He is very interested in being an entrepreneur and using direct response to build a business.
He asked if a good strategy was to study a lot now and wait for the money to come and then deploy it.
Here was my answer to him:
Believe it or not, it can be handicap to have too much money when you’re starting new ventures.
Ted Nicholas experienced this and wrote about it.
He did great in one venture, thought he was a genius and gave it all back by throwing money at a new one that he discovered too late was poorly conceived.
Of course, you need enough money to be physically comfortable, but when you have a lot of cash the strong tendency is to spend it freely.
Money too often gets used as a substitute for creativity, for networking, for paying close attention to details etc.
There are a lot of ventures out there where the money was made one way (in a disciplined, hungry way) and is being depleted by a new, less disciplined business.
For example, if you go to Tribeca in NYC you’ll see a lot of cute retails stores occupying some incredibly expensive real estate. These stores make no commercial sense and are run by the wives of Wall Street guys who need something to do with themselves.
Anyone trying to emulate those businesses will blow themselves up because they’re not real businesses. They’re hobbies.
This applies on a large scale too.
For example, the glamorous billionaire Bass family of Texas is into all kinds of things, but the core of their money came from horse and livestock rendering plants. (Yes, dead horses really are made into glue.)
The Kennedys got their money from the father Joe’s “alcohol importation business” and what was then legal stock market manipulations. (You can’t change history.)
He was smart enough to put the money he earned from those ventures into prime real estate like the huge Merchandise Mart in Chicago.
My advice is if you ever get a windfall of any kind, put it in boring, ultrasafe investments like short term US Treasuries – and then forget you have it.
Stay lean – within reason – and make every penny count.
Spend your creativity 100 times before you spend money.
It really is true that if you can’t make money without money, you won’t be able to make it with money.
There is no amount of money so large that it can’t be blown – even by highly intelligent people.
I’ve seen it happen over and over again.
Be Swiss-minded: Defend capital with your life.
Money making – and keeping – is a brutal business.
We should be taught this as kids. Instead our young heads are filled with consumerist nonsense which then melds with “get rich quick” ideas.
Believe it or not, I recommend watching Shark Tank and paying close attention to the thought process of “Mr. Wonderful” (the cranky old bald guy)
I would not want to hang out with him socially but his sober approach to the realities of money is worth integrating into your mindset.
Bottom line: Don’t wait for “better conditions.” Get started now.
You can invest your time, thought, effort, hustle, and creativity now.
If you can’t do that without money, getting money is not only not going to help, it’s also probably going to dull your edge.
– Ken McCarthy
P.S. For over 20 years I’ve been sharing the simple but powerful things that matter in business with my marketing students.
If you’d like direction for your marketing that will work today, tomorrow and twenty years from now, visit us at the System Club.