Interesting Mark, how many of those young startup millionaires are still wealthy a few years later?
I believe we need to make and loose money a few times to really understand how it all works. How many times do we need to make and loose a million before we keep it? I’m not sure.
I guess it varies with each person.

I have one rule, spend less than you make. Most of the stuff we think we should have, we don’t actually need.

Cheers Mark, enjoy your weekend

So true! Having set up successful businesses and also helped liquidate businesses in the past I feel the key to success is to aim higher. Yes, you may strike it lucky straight away but it’s important to look forward. Where are you going? Where do you want to be? You may get a beginners luck windfall and have that burning desire to splash out but who’s to say that your success is guaranteed? It probably isn’t, not just yet. Build your nest egg, save, plan, forecast, make a beautiful spreadsheet; one column for projected income and one for actuals … sit tight … enjoy the right but play your card close, VERY close to your chest … success is round the corner but who know’s who big the block is?

So true! Having set up successful businesses and also helped liquidate businesses in the past I feel the key to success is to aim higher. Yes, you may strike it lucky straight away but it’s important to look forward. Where are you going? Where do you want to be? You may get a beginners luck windfall and have that burning desire to splash out but who’s to say that your success is guaranteed? It probably isn’t, not just yet. Build your nest egg, save, plan, forecast, make a beautiful spreadsheet; one column for projected income and one for actuals … sit tight … enjoy the ride but play your card close, VERY close to your chest … success is round the corner but who know’s who big the block is?

Great advice. Thoroughly stated. Equipped with a presence of “been there done that”… now I’m hear to share it, so you can learn from it. I love it.
Your style is one to remember. You comfortably take the teacher’s seat when it makes sense…but the cool thing is that I’ve seen you in the student’s chair as well. That’s just humble. Thanks for being an example.

Keeping up with those Jones’ is impossible. It’s like a greyhound catching the bunny in a dog race…it just won’t happen. Or, like a hamster making it’s way out of a cage by running on the wheel.

Great advice Mark.

One thing that I’ve seen all to often is that people TRY to be smart with their money by hiring a professional accountant who then drains them clean. What devastation…Our friend Marcus has lived through that one. And I’ve known others, as I’m sure you have too.

So, I suggest that you keep an eye on things. Don’t think because someone has been hired or assigned to handle the books – that all is perfect. Because I’ve seen this come back and bite on the IRS side as well.

It’s rough out there – but tips like these (yours, not mine) are what help folks be successful in the long run.

Thanks Mark
PEACE

Hi Ameena, I certainly couldn’t have said it better!

You covered all of the bases with this reply.

Long term business success takes patience, something that many startups lack. Experience is really the only thing that can provide wise money management skills. That’s been my experience anyhoo : )

I’m thrilled to have the infamous booby blogger (hope I don’t get trouble with that on!) Ameena Falchetto stop by and lend some encouraging words. I can tell from your reply you’re a skilled entrepreneur.

What a dynamic duo you and your husband make!

Cheers Ameena!

John, as I’m sure you’re aware, most self-made millionaires have lost a fortune on average of three times before they make a fortune and preserve it. The age of wise money management comes right around 50 for most as well.

I don’t have stats to back up, but I’m pretty sure these are some well known facts by many entrepreneurs who desire to build a fortune.

This isn’t by some mistake. When your young and making millions of dollars (that’s a lot of hay!) you just don’t think it’s ever going to stop flowing. You get a sense of invincibility and only believe there’s no where to go but up, up and away.

Nothing could be further from the truth. An average of three times… that is significant. I think there just comes a time with age, experience and a different perspective in life that is usually tied to a certain number of years on the planet that we began to manage and spend money in a much different fashion.

Maybe less risk, or longer term investment strategies, or not purchasing things we really don’t need as you point out John

Sure would have been easier if your perspective on money changed sometime in your 20′s vs. 50′s :p

Thank your input sir.

You have a pretty cool pen there Mr. Allen… ‘sharp is the word that comes to mind.

Somethings I know and I’m confident of sharing the experiences I’ve had because they are real to me and they can potentially be valuable to others.

However, when I don’t know something, I’m not ashamed to admit it. I just keep my trap shut and ears wide open because I’m taking note of every word that will help me understand.

I had a very bad experience with a CPA early on in business as well and I’ll just say it’s wise to make it your business to know and understand where every penny of your money is.

Don’t trust others to take care of it for you. I’m not saying don’t have a bookkeeper or CPA, just stay on top of people who are responsible for taking care of your money.

Thanks for exercising the old brain over again Jk – I swear I’ve gotten smarter since we’ve hooked up : )

So true, yet so often ignored! This is such valuable advice, Mark. I’m going to share it with my group of SCORE consultants (Small Biz retired execs who offer free counseling to entrepreneurs and start ups). It’s so difficult to not live by the cash flow only model, but to build up for that rainy day. I’m working on it, but it takes persistence! I’ll keep checking back in with you for continued insight and inspiration!
Happy Weekend,
Erica

You know JK I have read so many stories of people getting in trouble because their accountant was unethical or incompetent. In both cases same result, the business owner suffers. I do my accounts myself, and since I can’t do math to save my life, get it checked and rechecked.

Mark is right, managing money is a skill and it takes time to acquire

Right so I have another 10 years to wait before I get it right

I’m the same way John. If I can stack the chips, thn I can keep the books! At some point it’s going to more difficult for me than it is now, but I believe in watching my own bottom line.

Well, I’ve gotten smarter too Mark. Every time I come here I learn something (or many things) new. Thank you!

And I really love the comment discussion…this is where id really happens!

Hi Erica – happy Saturday to you miss.

I think money management is key for young entrepreneurs to gain discipline and understanding of early on in their career. While years on the planet often leads to handling money differently, there is much wisdom in understanding how to budget, invest, and save money.

One of the biggest mistakes is leveraging and borrowing money based on the cash flow of your business. Not saying that doesn’t make sense in many cases, however not if it’s being invested in upgrading your lifestyle.

Discipline and patience are rare commodities for many young, talented, motivated, driven entrepreneurs. They have a very clear vision for the finer things in life and are willing to work their butts off for them… and when things begin to click and the cash flows, NOW just seems like the right time to upgrade : )

I really appreciate your input and insights here Erica, have an awesome weekend : )

Oh yes Jk, you’ll need accountants and financial advisors to take care of the millions you’re going to make = count on it : )

Wonderfully sound advice you’ve laid out here. Having stared bankruptcy in its face more than once, this is a subject I’ve though quite a bit about over the years Mark. Here are some of my ‘keys’:

1. Scrutinize waste always. Even in the ‘good’ times.
2. Improve your knowledge and skills on an ongoing basis. That must never stop.
3. Like you said, look to impress no one. Having an ‘edifice complex’ will kill a company….fast.

Marcus

I love it when the Sales Lion stops by to share here, thank you Marcus for your continued support.

All three of your keys have come from building a multi-million dollar business and that’s not an easy task; one that was filled with many lessons and adjustments along the way I’m sure.

For young entrepreneurs, improving your skills on an ongoing basis is critical. Nothing can add to that like first hand experience. You just can’t learn how to run a business from books and class rooms. Nothing replaces actually doing something and learning from the experience.

My advice to aspiring entrepreneurs is strap your seat belts on – for two reasons: firstly, you’re in for the ride of your life and secondly, things can get so hair-ball, those straps may the only thing that keep you from running anywhere but to the office!

There is nothing I’ve done that has challenged me more in life than being an entrepreneur. It has stretched me in ways I never knew I was capable of enduring.

Building businesses is one of the toughest and yet rewarding things a person can do with their life.

Best wishes always to the Sheridan clan : )

Mega dittos….very well put Mark.

Mark,

I found a tremendous amount of value in this post because in my line of work I have discussion like this with investors. Cash flow is a very important part of understanding if a company has what it takes to push through the pain and finish the marathon or are they just here temporarily for a sprint. I love the idea of storing grain during a surplus because it will definitely keep you during the famine. No matter what type of business you are in you have to understand that there will always be periods of growth and periods of struggle. Thanks for helping us be prepared. Great post Mark.

Happy Sunday to you Frank.

I like the storing grain during surplus analogy you used here bro. Joseph was a pretty wise businessman and that foresight led to many riches during a one of the worst famines in the history of the world.

Its sounds like you have a solid understanding of what can help a startup work for the long term, or least have a good chance to.

I hope you’re having a fruitful Sunday and getting some good inspiration to share with the community. I’m looking forward to reading it : )

A very good read Mark, and thanks for sharing these tips.

I have no experience of starting a business, not a jot, yet I want to own a successful business and retire early, as does everyone. So for me to achieve this level, I need to do something about this ‘no experience’ situation.

It’s reading material like this that will help me, and I mean more in the long run rather than now. I plan on starting a business in the future, so it would be good for me to keep this kind of material for future reference, as it won’t be able to do much good now.

Still, I come here not only for the great conversations we can have Mark, but also for the great content that you provide for us. You provide VALUE, and that’s all we can ask of you

I appreciate your vote of confidence Stu. It’s pretty challenging to write solid content and keep up with you and others who are creative writers.

This post was a simple fact. Many startups fail because of poor money management. If you’re mindful of this when you do start your business, you’ll have a much better chance of succeeding in the long run.

I appreciate your support and kind words Stu, as you’re aware, it’s what keeps us going and digging deeper to do better : )

Make it a great week sir!

I can’t say that I’ve started up a business but I do live my life by one rule.

1. Minimize your fixed costs.

By keeping fixed costs at a minimum, it frees up extra money for savings which, in turn, allows the ‘little’ extra from time to time.

It keeps life flexible and interesting for me.

Hi Monica — it’s so good to see this evening, sorry it took me a while to get back to you, it’s been hectic!

These are wise words from a wise woman. Being thrifty and disciplined in money matters is one big key to building wealth. There are just a lot of things people spend money on that they absolutely don’t need.

I’m not a big proponent of borrowing money either. I like to pay cash for things rather than buy things on credit. It’s better to own things than borrow them from a bank, certainly much less expensive too.

Thank you for making your way over hear today, it’s much appreciated ; )

Solid advice here Mark,

Good to have these sort of words out here where entrepreneurs can really learn how brick and not just online businesses are run. The online crave makes it seem as if anything and every thing is automatic and can be automated. This mentality is one of the reasons they wind up broke on the long run.

Having a budget is how I manage my business finances, I always ensure I have a regular list of necessary expenses to make as regarding my business. This list of necessary expenses I refer to as seeds that must be sowed if I am ever going to reap bountifully in the long run.

Before I even begin to meet personal needs, I try to cater for the business needs first since I know without the business laying its eggs, i won’t have any to fry. This approach has always helped, putting the needs of the business before mine, knowing that if the business is super fine, then I will be fine. But if not, then I am doomed.

Budget helps to keep your expenses in check and make sure the list on the budget are not just luxuries, but necessities. Those expenses that your business cannot do without and also those it needs to go to the next level.

Mark, it is good reading posts like this. They delve into the principles behind successful businesses and they are much needed in the blogosphere where people just think social media and SEO is all that matters!