Stay Broke Not Poor

Stay broke! You heard me, stay broke but not poor. What is the difference? Broke is a temporary situation. Broke people have money they just misuse it. Poor is being destitute or lacking sufficient resources. I got this from Grant Cardone’s, The Millionaire Booklet. It also aligns with Dave Ramsey’s concept of naming every dollar.

This is about increasing cash flow and wealth building. Staying broke is a financial strategy to help you reach financial freedom. What does staying broke not poor really mean? First, it means having a monthly cashflow plan (budget). Second, you are practicing delayed gratification. Third, reinvesting your money into yourself and your business.

This is for wealth builders. Those entrepreneurs who are not playing average. The average business owner in the United states makes less $25,000 per year. 91% of all small businesses earn less than $250,000 per year and 80% of entrepreneurs are failing within 18 months of start-up. Playing average sucks. So don’t play average.

Perfect Examples

You see examples of entertainers and athletes who get paid big and a few years later are filing bankruptcy. There is no shortage of stories of athletes or entertainers that have filed bankruptcy or have became broke after a big payday. Top draft picks start buying toys, living lavishly, or make bad business decisions. Entertainers throw big parties, “buy” the bar, and get into debt buying things they can’t afford.

You check out Wikipedia for the statistics of famous people going broke or filing bankruptcy. These are prime examples of people who got big paychecks but did not stay broke. Athletes have a short career. There is a short window for them to produce a huge amount of income. Entertainers have to stay relevant in their industry before the well runs dry. You, as an entrepreneur, have the ability to continue to produce.

Stay Broke

Understand that I am not telling you to cramp your current lifestyle. Staying broke requires discipline. It is making sure that you focus 95% of your time building your biggest assets. Which is you and your business. Grow faster by staying on a budget and reinvesting in your business.

People underestimate how long it takes to be successful in generating positive cashflow. They do not prepare for the peaks and valleys that are going to occur. Furthermore they are not ready for the lean times or when a part of their business fails. But staying broke can help you weather the storm that comes.

5.5 Aspects of Staying Broke

1.Cashflow Plan – In order to stay broke you have to know where your money is going. Everyone needs a cashflow plan. Know where every dollar is going. Give every cent an assignment. Money that doesn’t have an assignment tends to get lost. Tracking your dollars keeps you out of financial trouble. Money that hangs around with no purpose gets spent, wasted, or blown.

2. Delayed Gratification – I made this mistake often. I would spend my bonuses and every huge increase. I was naive to think it will always come in. I didn’t save or reinvest into my business. Thus I became broke and homeless. “Ballin” is stupid. Especially when you don’t have the assets to support it. Leave the flashiness behind. Forget impressing people and being “turnt up”.

That big client you just landed doesn’t signal it’s time to spend and get stupid with the new increase. Delay that impulse. Put that money back into your business to create more revenue. Go land some more big clients. Delay indulgence now so you can indulge later when you are financial free.

3. Increase Income – Income is king and this is the only thing that matters. Remember, we are not playing average. Businesses succeed when revenue increases. Incremental increase is key. Going from $4k per month to $4 million over night is nearly impossible. Look to double your income over the next several months. Always look to increase revenue. More sales = success.

4. Sacred Accounts – Put all that extra income into Sacred Accounts. When something is sacred you do not touch it. You don’t violated it. This money is for future use to help create more assets. I have a real estate account which I haven’t touched in years. I put a portion of my income into it every month. All of my extra cash goes into that account and I don’t touch it.

You are saving to invest. Not saving to save. This money is designated to a future purpose to create more income. It could be a second business, real estate, or something else that will increase your income flows. The key is… you are not just saving. You are studying while you are saving and learning about your next investment.

Understand it could be years before you pull the trigger. I have saved in my real estate account for 2 years. I am studying and active in the areas I want to invest in. Study while you save.

5. Reinvest Your Profits – A part goes to your sacred accounts. Reinvest the rest after all your necessities are taken care of. Put that the money back into your business and yourself. Need to invest in coaching to get better? Then do it.

5.5 These Things Take Time – Idea + Hard Work x Time + Discipline = Success. Are you committed to getting rich? How serious are you about creating wealth? I don’t know how long it will take you to produce a six figure income. I do know it takes work, time, discipline, and access to capital. My mentor went from welfare to earning $10 million dollars in less than 3 years.

Game Time

Success takes time. Stay broke and continue to grind. The choice to stay broke is yours. You are voluntarily choosing to build your business so you can be financially free later. “Pay the price now so you can pay the any price later”.-Grant Cardone

Book Summary: The Brower Quadrant – Live Life Deliberately – Written by Lee Brower

Do you ever think about generational transfer of wealth, fiscal accountability and contribution? The statistics for generational wealth hitting the 3rd generation are dismal. Basically, the first generation busts ass and creates something great. The second generation leverages the knowledge and the experience and expands the enterprise because they grew up seeing the work ethic and ingenuity exerted by the first generation. Now comes the third generation that basically is handed over the keys without doing the work and the enterprise dies. This is the fault of the second generation teachings and the third generation entitlement mindset.

Why is this important to me?

If you have a business and you are building your net worth and want to pass it along then this is critically important to you. Do you know that 90% of lottery winners are broke in 5 years and end up in worse shape than when they started? This is even worse for ex-athletes. Athletes are good at what they do and they simply think they are good in business because they have the money. Just like athletics, creating wealth is a science that takes hard/smart work and dedication.

Anybody who says that they will go into business and succeed without the work is no different than me saying I will start for at tailback for the Dallas Cowboys next year. Both are very unrealistic but most people don’t see it that way for business. Education is critical along with hard/smart work.

The Brower Quadrant is broken down into three key parts. For the sake of time, I will define what the quadrant is and then touch on how to start living it.

1. What is the Brower Quadrant? The Brower Quadrant consists of four components. The first component is the “CORE”. This is your special talents and what drives you as a person. If you are a musician, athlete, artists or business person, the core is what defines you. The “EXPERIENCE” quadrant is all the experiences that define you and your family. This is important and needs to be captured and put into story format. Example: My grandfather came over to this country by himself when he was 9 years old on a ship across the Atlantic Ocean. Put this into perspective as most 9 year old kids today are not even allowed to be outside after 5:00 in a good neighborhood. Unfortunately, I was too young when he died and I was not able to capture the whole story to share. The experiences that shape your personality and your core need to be captured and shared. They may seem trivial to you but are important because they define what you do and how you do it.

The “CONTRIBUTION” Quadrant is next. This is where you instill an attitude of gratitude and open up your heart. I realize this is esoteric but I cannot tell you how many books I have read that say the same thing. Basically this is Emerson’s law of compensation – If you want more then give more.

The “FINANCIAL QUADRANT” is the money and wealth preservation quadrant. Most Estate planning people will simply show you how to minimize tax liability and ask you how you want to divide up the assets once you go down for the dirt nap. Lee takes a whole different approach and shows you how to continue to grow your financial position with the Family Empowered Bank and pass it from generation to generation. The Brower Quadrant is the solution to fleeting wealth across generations.

2. Why is the Brower Quadrant important? I touched on this above but it bears repeating. Each of the quadrants can be thought of as assets. Family knowledge and skill sets are typically taken for granted and lost. Most hard working business people lose their businesses to their heirs. This also creates family stress and torn relationships. I can personally attest to this. Our business consisted of extended family and the entitlement of one of the partners was absolutely despicable and it tore the family apart and ended up in court.

3. How does it work? Lee says it best in a chapter subtitle – “Family Leadership”. This is much more than estate planning. Leadership requires vision, clarity, action, communication, influence and a whole host of other attributes. Implementing the Brower Quadrant requires clarity in each quadrant with a set of action plans that are communicated and acted upon.

The Brower Quadrant is required reading for anybody interested in preserving and building wealth across generations. Lee does an excellent job of outlining what is needed and gives additional resources. I started implementing some of the things in the book and will continue to implement all of it as our family and business grows.

I hope you have found this short video summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days. One thing you can take away from this book is the difference between Family Leadership & Estate Planning. These two concepts are very different and Estate Planning is simply a very small subset of Family Leadership and the Brower Quadrant.

GOD Wants You Rich – Book Review

By: Scot Anderson (2009)

ISBN 978-0-7684-2745-5

Book Price: $24.24

150 Millionaires

As a cutting-edge entrepreneur, best-selling author, and dynamic speaker, Scot T. Anderson has cultivated an extensive following among the most highly-respected and influential business leaders worldwide (endorsed by Robert Kiyosaki, Larry Winget, & Les Brown). As a pastor, he has developed 150 millionaires in his church.

So many more rich ideas

Scot Anderson has provided fifteen chapters to express the will of God for us to be rich. He covers, the purpose of money (Ch. 3), what you expect you always get! (Ch. 6), Jesus wasn’t poor (Ch. 10), one change will produce wealth (Ch. 12), the power of belief (Ch. 14), habits control your world (Ch. 15), and so many more rich ideas!

Thinking and living the rich life

Scot Anderson comes highly recommended; Les Brown says of Scot, “Just ask more than 150 members of Scot’s congregation how they happened to become millionaires after Scot introduced them to new ideas and wealth-creation strategies.” Scot’s style is informative and expressive as he endeavors to introduce many to wealthy living.

Anderson focuses on freedom presented in biblical truth to persuade readers. He explains, “… the Bible isn’t about the don’ts, but about the dos, not what we can’t do and have, but about what we can do and what we can have.”

Using simple illustrations, Scot diffuses false ideas about wealth. He shares, “Money is not evil! A hundred dollar bill has no power. I have one in my wallet right now, and if left alone, it would never do anything-good or evil… Do your own test: take some money and leave it alone in a drawer for a month. Then write down all the evil it did.”

Scot is stern in addressing pertinent issues. He pointedly advises, “As long as you think it is wrong to have money, you won’t. Until you can break that one thought, you will never be able to step into the abundance that God wants… “

Mr. Anderson uses points from Jesus’ life to impress his message on reader’s hearts. He shares, “1. Jesus was born in the royal line of David… 5. The Magi brought expensive gifts… gold, frankincense, and myrrh… 8. The disciples were successful businessmen… If Jesus was really poor, successful men would never have followed Him… “

God wants us all to be rich!

Scot Anderson has successfully revealed the desire of God for all humanity; God wants us all to be rich!