Bunch: How Much is Enough?
I was on a call with a fellow shop owner, and this question became part of our conversation. This particular topic actually comes up often with my clients and my peers. The reality is that most of the people I know who make over $1,000,000 a year in personal income live off 150,000 to $200,000 a year. So "how much is enough?"
My neighbor is a commercial airline pilot who flies internationally. His income is around $300,000 per year. I find it interesting that he has one of the biggest houses in the neighborhood and added an additional mega-garage to his existing one. His home is packed with high-end everything; his garage is full of toys, including a very expensive and luxurious motorhome.
I thought to myself, The mentality is different when you get a high W2 income working for someone else rather than an entrepreneur having and profit and loss statement showing a 300k profit. Business owners must use profits to build operating capital, reserve capital, and pay taxes on money they don't get to us on personal expenditures. Most of you will agree that life can be very different for the entrepreneur. So how do you manage your business and personal finances?
We have all heard the saying "money can't buy happiness," and deep down, we all know that's true. However, having a healthy income, a healthy savings account, and a retirement plan does help with reducing financial stress and creating some financial security. I heard a saying that if you have a problem that money will solve, and you have money, then you don't have a problem!
All that to say, happiness is fickle and temporary. A fulfilled life, which is a much better goal, comes from doing meaningful work and having the resources to invest in other people's lives, whether physically, emotionally, spiritually, or financially.
I laugh when I find out my 88-year-old dad is buying lottery tickets. The irony is that he has enough money to do literally whatever he wants to do (not private jet money, LOL). I asked him what he would do with the money if he won the lottery. The only thing he could come up with was that he would buy himself a newer truck. He is fully capable of buying whatever truck he wants right now! By the way, he spent most of his life pouring into kids through 4-H and will die having lived a fulfilled life.
As business owners, the gross sales and net profit we generate becomes a way of keeping score with ourselves and our peers. Some shop owners are driven to grow and grow and grow, while others seem to be content with what I call a" lifestyle business." They're making enough money to support a comfortable lifestyle, enjoy a fair amount of time off, and/or are not driven to grow because of the disruption it may have in their lifestyle. There is no right or wrong answer, but I encourage you to think about your goals, what motivates you, and most importantly, what you want your life to look like when you are old and grey.
I have worked hard most of my life. At first, it was because If I wanted anything extra, I had to pay for it myself. My first car was a 1966 VW bug that should have been scrapped. Instead, I bought it for $250 and had to make payments and do yardwork for the seller!
I got married young, and we got pregnant soon after. I worked two jobs and still struggled to pay for our mobile home and tool bills. Having my own business was always a dream. However, I knew I needed more experience and money to start. I worked my way up in the automotive industry. I went from and few independent shops to a dealership, back to an independent shop, and then into management before starting my own business. I did accomplish the goal of getting more experience. However, I did not achieve the goal of saving up the money to have my own business; having a similar story to many of you, I had to break the piggy bank and put things on credit cards to get my business started. I believed money came from hard work. I needed money to grow the business, hence lots of 60- to 70-hour work weeks.
Things have come a long way since then, and I feel very blessed to have what I have now. So, the question I ask myself now is why do I continue to push so hard? If I have arrived at the point where I could pretty much buy whatever I want, why does it make sense to continue working? Why not just sell off everything and retire young? My answer is that I know I am on this earth to bless others by providing opportunities and helping as many people as I can to achieve their dreams, and my companies are a tool to accomplish this. Plus, I can't sit still. I would find myself bored and unfulfilled.
So, the question we all must reflect on is how much is enough. We are all responsible for making enough money to provide for our families. Have sufficient savings for a comfortable retirement and to send kids to college (not that I believe that's the right thing to do for all kids).
My last column was about the importance of having margin in your life. I mostly talked about time, but I think it's equally important to speak of financial margin. I received feedback from numerous readers that the article really hit home! So, take grandma's advice: live below your means and have money set aside for a rainy day. It's not a question of if it will come, it's when.
There was a scene in the Showtime drama Billions where one character had a goal of having a net worth of $100 million. When she got there, she planned to move from making money to doing something that would change the world for the better. But, after speaking to her boss, a billionaire, she realized that it would take a billion dollars to change the world the way she wanted it to.
I think we can all do a lot of good for our world without having to have a $100 million net worth, let alone a billion! Have you ever thought about it? Do you think about what you would buy or what you could do to help others?
We all need to ask ourselves whether we are using part of our wealth to help make the world a better place, or if we are increasing our lifestyle and spending that money on ourselves. Are we hoarding that money, or are we sharing it with the people who helped us earn it? All the gurus agree that the ultimate fulfillment in life is the ability to give of our resources and help people create a better life for themselves; so let's all work together and make the auto repair industry and our world better for everyone!
I would love to hear your thoughts on this; email me at Greg@transformersinstitute.com.