Dateline: Doha, Qatar Many of us have come to realize that trolling social media can be a huge waste of time. I personally have set a goal to dramatically reduce the amount of time I aimlessly spend on Facebook and watching non-educational Youtube videos. There are several damaging elements to spending so much time on social media. For one thing, the political discourse surrounding events like Brexit or the Trump election creates a lot of unnecessary drama and focuses us on the wrong stuff; namely, that what happens in our lives is outside of our control, only fixable if the “right” person gets elected to office. No matter where you live, I promise that you can find a way to “go where you’re treated best” no matter who wins the next election. Another damaging part of what social media is the confusion created by so many opinions coming at you from all directions. As we constantly discuss here, taking action on anything requires a clear path free from distractions, and social media is nothing if not a distraction. Everyone is promoting their specific way of doing things with long, harpy status updates or cute memes. Take it all to heart and you’ll surely end up confused and decide, as most confused minds do, to do nothing. Sometimes the same sites even peddle different advice. For example, CNBC, whose social media feed has become a propagandized version of People magazine for finance, frequently touts clickbait stories of experts claiming the right way to invest in diversification. Ten minutes later, the next clickbait story touts their patron saint Warren Buffett as saying not to diversify. One story that continues to surface on social media is that of Robert Morin, a university librarian in New Hampshire who managed to save an impressive $4 million over his years of working. As with any good heartwarming clickbait, similar stories have also come out. The stories are all similar to Morin’s. Morin graduated from the University of New Hampshire in 1963 and worked as a cataloger in the school’s library for fifty years, apparently never marrying, living alone, and spending very little of his income on himself. The moral of the story, perhaps, is that if you eat frozen dinners, forego modern conveniences, and re-purpose your old underwear, you too can die with $4 million. This scrimp-and-save approach might work for employees whose jobs are at stake or at the very least have limited potential for raises, tough economy or not. There are vast numbers of personal finance blogs dedicated to helping a modern-day era of coupon clippers. However, I believe that this approach can be quite dangerous for high-achieving entrepreneurs. As an entrepreneur, your money is often better invested in order to make more money, not squirreled away. Many of the people I help with offshore planning have online businesses that require either constant turnover of either inventory or advertising and are used to plowing their profits back into their business. It’s fun to watch these guys grow from $250K a year to $1 million a year in short order due to a combination of re-investing in themselves and smart offshore strategies. Their fast success is due to them re-investing in themselves. However, investing in yourself as an entrepreneur does not stop at merely increasing your Facebook ad budget or investing in the next Amazon FBA product. It also includes investing in your lifestyle and happiness. For example, I’ve found that I am far happier and work far more efficiently when staying in nice hotels. When I compare the work I got done staying in cheap hotels in Asia years ago (when I could have afforded better but chose to cheap it out) to the work I get done in the great hotels of the world now, there is no comparison. As I increased my spending to living and traveling in comfort at all times, I was worried that my net worth would take a hit… or at least not grow as quickly. Just as the Law of Abundance states, however, spending at a higher level means operating at a higher level. My financial statements look their best in years where I invested in myself, both back into my business and into my comfort. In the same way sports teams “baby” their players, I believe entrepreneurs should baby themselves a little bit. If you had a full-time job, chances are the office wouldn’t look like a hostel in Cambodia. While corporate employers would surely jump at any opportunity to save money, they have largely realized that pleasant working conditions are important for their people to get stuff done. This same principle applies to entrepreneurs, especially those that are traveling the world and need to be at their best at all times. Likewise, investing in networking opportunities such as professional groups, chambers of commerce, or merely following my advice of hiring lawyers to meet the best people in any country is often a reasonable investment. And when it comes to the offshore stuff we talk about here at Nomad Capitalist, cheaping it out is often a recipe for disaster. Some in this business refer to “the $100,000 cheap offshore company”, referring to the high risks of working with low-priced guys who have a great sales pitch but often can’t deliver the desired result. Entrepreneurs are different. We want the best lawyers, the best accountants, the best service providers, the best of life, not because we want to waste money, but because having the best allows us to be at our best. Chasing down a cheap-o lawyer to get him to do his job isn’t the best use of an entrepreneur’s time. Nor is figuring out how to get a Panama residence that may or may not even be the best option. If you’re in business for yourself, you probably know most of this stuff on at least a basic level. However, I’ve often met entrepreneurs – my past self included – who cut corners out of fear of spending money. They follow the scrimp-and-save method of the librarian because it is what is presented to them. The vast majority of society is not made up of entrepreneurs and doesn’t understand the unique issues that we face. As a result, most of the stuff you’ll read online is designed for people with totally different needs than you have. So before you decide to cut corners to save a few bucks, realize that your best long-term investment as a successful entrepreneur is you.
Last updated: Dec 28, 2021 at 10:18AM