The Prosperity Blog

9 Mistakes Entrepreneurs Make with Money

Self-employed, entrepreneur, or small biz owner… you’ve taken the road less traveled. You are freedom-oriented and independent. You’ve traded the so-called security of a J.O.B. for the opportunity to pave your own path.

I understand. After a job in banking and several years working for a typical financial planning firm, I also got “the call” to start my own firm. I no longer felt that “typical” financial planning advice allowed me to do what was BEST for my clients. I watched people lose FORTUNES in the market, only to be told to just keep doing the same thing with their dollars! And I saw people frustrated that there were no other options.

(That’s how many people become entrepreneurs; they develop a passion to solve a problem!)

I saw that people can build wealth WITHOUT the Big Banks and Wall Street firms. An alternate path had been modeled for many decades, even centuries by SUCCESSFUL ENTREPRENEURS who had built sustainable wealth… long before “Financial Planning” even existed.

Eventually, I codified the principles and strategies that have been used by wealth-builders over time. I coined this philosophy “Prosperity Economics,” and it became the foundation for Partners for Prosperity.

Not only am I an entrepreneur myself, but I’ve worked with thousands of entrepreneurs over the last two decades. Entrepreneurs are my favorite people in the world. They’re creative, caring and passionate. And sometimes… they make BIG MISTAKES with money!

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Money and Happiness: The Surprising Research

“All I ask is the chance to prove that money can’t make me happy.”

~ Spike Milligan

Are people who make more money happier? What about people who save more? Can people be happy with very little? And how do your spending habits impact our satisfaction?

In this article, we examine how money relates to happiness, including income, wealth and saving habits. As you’ll see, there are many insights we can glean from various studies on the topic, the relationship between money and happiness isn’t necessarily simple.

The Price of Happiness (about $75k)

Economists Betsey Stevenson and Justin Wolfers of the University of Michigan examined World Bank data from more than 150 countries. Not surprisingly, they concluded that the more money you have, the happier you tend to be. However, money will only make you a little happier. According to 80000hours.org, “each doubling of your income correlated with a life satisfaction 0.5 points higher on a scale of 1 to 10.” In other words, doubling your income may make you only about 5% happier than you are right now.

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12 Ways to Prepare a Portfolio for a Bear Market

“Rule No. 1: Don’t lose money. Rule No. 2: Don’t forget role No. 1.”
—Warren Buffet

Last week, we examined seven reasons why it could be time to preserve your gains and get your money OUT of the stock market in our article, “Is Now the Time to Go to Cash?” In summary, we examined:

  • Rising volatility in the markets
  • A stalled stock market teetering on the edge
  • Climbing interest rates
  • Rising debt—both national and personal
  • Bonds losing value
  • A slowing real estate market
  • And the “smart money” pulling out of stocks and heading for safer havens.

It’s not rocket science to realize that the stock market can’t continue to hit endless new highs. But where can you put your dollars when volatility and corrections rule the day? The economic winds have changed, and it could be time to position your portfolio for a bear market. Here’s are some steps you can take:

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Is Now the Time to Go to Cash? 7 Signs Point to “Yes”

“If you got a dollar, soak it away, put it in a savings bank, bury it, do anything but spend it. Spending when we didn’t have it put us where we are today. Saving when we’ve got it will get us back to where we was before we went cuckoo.”

Will Rogers, Daily Telegram, Nov. 24, 1930

Is it time to go to cash? If we only had a crystal ball, we could give you a definitive answer! However, we can look at patterns of the past and analyze the present. As we do this, it’s hard not to notice the warning signs that suggest 2018 may be an ideal time to move more assets into cash and other fixed and safe havens.

Below are seven signs that may indicate that trouble is on the horizon, and some steps you can take to protect yourself. You’ll also find some seemingly relevant quotes from a past era sprinkled throughout, compliments of Will Rogers. A Depression-era American humorist and social commentator, his observations seem particularly appropriate to today’s economic climate.

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Capableism: The Driving Force of Progress and Prosperity

“Every individual strives to become more capable. I believe this is essential to what it means to be human.”
—Dan Sullivan

Why do we seek progress? What drives us to learn, grow and prosper? Two weeks ago, we shared some of Larry Reed’s thoughts on Socialism vs. Capitalism in our article, “What is Socialism—and Does It Work?” This week, we’d like to share some thoughts on what may be the ultimate driving force for progress and prosperity—over and above political or economic systems.

Dan Sullivan calls this force “Capablism,” which he defines as “a powerful instinctive drive in humanity to constantly increase human capability.” Capableism is the desire within us to learn, grow, and improve ourselves. It drives us to be better and do more, whether we are entrepreneurs, employees, students or stay-at-home parents seeking to develop our children’s capabilities as well as our own.

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What’s Wrong with Financial Planning? (and the Solution!)

Did you know that the financial planning industry has been around for less than 50 years!? In the span of just a few decades, the industry has had great influence on how people approach their money, where and how they save and invest.

Is this a good thing? Well, yes and no. Today, we give a bit of history and revisit some video interviews with Partners for Prosperity’s founder, Kim Butler. You’ll get an overview of financial planning—and why we don’t do typical “financial planning”—and the Prosperity Economics solution.

How Financial Planning Began

According to “A Concise History of the Financial Planning Profession” on the website of the Financial Planning Association, the financial planning industry was conceived in a December 12, 1969 meeting of 13 financial service industry leaders at a hotel near Chicago’s O’Hare airport. They were gathered together by Loren Dunton, a sales trainer from various industries who had recently authored a book called How to Sell Mutual Funds to Women. The country was in a recession, and according to Dunton.org, those who gathered were “financial product and service salesmen… driven to find a solution” to the financial challenges faced by Americans, including those in the financial industry.

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What is Socialism—and Does It Work?

“Since this is an era when many people are concerned about ‘fairness’ and ‘social justice,’ what is your ‘fair share’ of what someone else has worked for?”
—Thomas Sowell, American economist

In 2016, Democratic Socialist Bernie Sanders was the first political candidate in nearly 100 years to gain a sizable following running on a socialist platform. This spring, three women running as democratic socialists won primaries in Pennsylvania. Then a few weeks ago, a fourth—28-year-old newcomer Alexandria Ocasio-Cortez, one of Sander’s organizers and a member of the Democratic Socialist Party of America, handily unseated ten-term incumbent Joe Crowley in a New York Democratic primary. Her platform? Medicare for all, a guaranteed federal jobs program, free college and trade schools, abolishing Immigration and Customs Enforcement, and curbing the influence of money in politics.

Days after, we saw a split in Democratic leadership about the significance of the win. DNC Chairman declared Ocasio-Cortez “the future of the party,” while stalwarts such as Nancy Pelosi dismissed the victory as an isolated event in an unusually progressive district. But there is no doubt: socialism is gaining support in America.

A Harvard poll from 2016 found the majority (51 percent) of millennials, America’s largest demographic group, do not support capitalism. Another 33 percent identified themselves as socialists, though it is unclear how well the concept and its history are understood. There are important distinctions between Nordic “Social Democrat” models (a la Denmark) vs. full-fledged socialism, which rejects free markets and private profit. Shockingly, 7 percent of millennials were in favor of communism.

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