If you’re a young entrepreneur and reading this, chances are you’ve been told the same old tired advice: “take risks early,” “follow your passion,” and “never give up.” It’s not that these pieces of advice don’t matter; it’s just that they’re not enough. In 2021, it’s important to not only work on your business but diversify and build your assets at the same time. We’ll talk about all the ways you grow your assets and your business at the same time.
Tip #1: Tax Yourself
As a young and developing entrepreneur chances are you’re using your primary income to support your business. Until your business can support you, it’s important not to go 100% all-in. You’ll want to make sure you tax yourself. Set aside money for savings and investments. Then use all the residual towards your business. If you haven’t learned the 50/30/20 rule, you better get real familiar. 50% of your income should go to bills, 30% should go towards assets and 20% should go towards the things you want. Now, this rule is flexible and you can adjust the numbers to work for your situation. For example, I pay all my bills but I’ve managed to keep them so low that they’re only 10% of my income. Next, I invest, 30% of my assets in either stocks or real estate. That leaves me with 60% of my income to spend on my business or I can partition that 60% to 50% business, 10% wants. The point is to tax yourself and treat your income as if not all the money is actually yours to spend.
Tip #2: Maximize Good Debt With Real Estate
You’ll want to take advantage of good debt. Most people think they should only go into debt when it comes to education or a business but that’s not true at all. Debt is a great tool and there are ways to use it for your benefit instead of against you. If your credit score is decent enough you can invest in either a multifamily home or a single family. The key is renting out the other unit or the other rooms to help pay the mortgage and even cash flow. Here is my favorite offset calculator. Any savings from reducing your living costs can be funneled back into the business.
Tip #3: Success Is Habits Compounded Over Time
Success is a marathon and not a sprint. If you’re just getting started it’s okay to take one day at a time or even week by week but eventually, that has to stop if you ever want to see the results of your work. I like using this analogy: when we were kids, did our parents tell us “do today what needs to be done” or “set goals for yourself”? We had big dreams when we were young but as adults reality sets in and many people got stuck on their track because they never planned out where they wanted to go. The same thing happens with business though most entrepreneurs fail because they don’t build the correct habits and stick to them. As James Clear elegantly states, “1% better every day compounds to 37% better in 1 year”. If you were inconsistent and 1% better every 2 weeks that compounds to 6% better in 1 year. Massive difference!
Build your assets and build your business. It can seem difficult but if you partition your money into relatively passive investments, they’ll compound over time. Make sure that you stay the course and put in the workday after day. First, we make our habits and then our habits make us. You might not see results overnight but the rewards are worth it!
The post Top 3 Tips For Young Entrepreneurs In 2021 And Beyond appeared first on Entrepreneurship Life.
By: Carson Derrow
Title: Top 3 Tips For Young Entrepreneurs In 2021 And Beyond
Sourced From: www.entrepreneurshiplife.com/top-3-tips-for-young-entrepreneurs-in-2021-and-beyond/
Published Date: Wed, 24 Nov 2021 13:55:37 +0000