It may be hard to believe, but lottery winners are three to five times more likely to go bankrupt than the average American. How is that even possible? Most lottery winners are completely unprepared for their sudden wealth. Many of them ignore advice from financial experts. They take all of the money as a lump sum, quit their jobs, buy a house, purchase a sports car, travel the globe, and recklessly spend, spend, spend. Oh yes, and sometimes fail to pay taxes. All of a sudden, three years go by and all of the money is gone; they’ve burned right through it. If someone handed you $10 million, could you safely say you would be smarter than all of those people and have the right money mindset? Don’t be so cocky: most of us aren’t.
WHAT DO WE DO WITH ALL OF THAT MONEY?
Some business owners do everything right: They scale and win. In fact, they win big. The company grows to epic proportions. Wowee! Now it’s time to buy that $100 million office building and $50 million warehouse they’ve been dreaming about. While we’re at it, how about a few sports cars, a summer home, and an island in the Pacific?
Don’t get me wrong. It’s fine to enjoy the fruits of your labor. You deserve every penny you’ve earned. Buy a new home if you’ve outgrown the old one. Get a fancy new car, if you can afford it. Take a well-deserved vacation.
At the same time, though, you need to be sure that your cash flow is strong, your Big Picture Vision remains front and center, and you have looked toward the horizon at what’s coming next. This is one of the signs of a good leader. You don’t want to become like all of those lottery winners who squander everything.
This is when a business coach or CEO coaching—and perhaps a trusted financial planner as well—can be especially important to help guide you on the next phase of your life. Where should you invest your excess cash while leaving some reserves safeguarded? Should you sell the business? Or should you buy another one? Start building toward your succession plan? What is your money mindset?
DON’T ALLOW YOUR BUSINESS TO STAGNATE AFTER SUCCESS
There is also an opposite circumstance that can occur when a business owner starts to meet with some scaling success: being stagnant. These folks clutch onto their money tight and stay right where they are. They don’t reinvest in the business or share any of the rewards with their team, their family, or their community. When this happens, life can be miserable for everyone involved. They might do so because they are afraid of losing it, are distrustful of others, don’t feel they deserve the wealth or, well, are just plain greedy about hoarding what they’ve earned. Whatever the case may be, it’s not healthy or productive for anyone.
A friend of mine, marketing expert Alex Mandossian, has coined the term cost of inaction, or COI. This concept can be likened to opportunity cost. When you are stagnant on autopilot and refuse to take those bold leaps, you could be losing an absolute fortune. You will always say, “would have, could have, should have” when it comes to COI, but never when you have received the right coaching and taken calculated risks to grow your business.
How to Develop Your Money Mindset
Developing the right money mindset in anticipation of any situation that might arise is critical to your long-term scaling efforts, growth, and happiness. Whether you are a spender, a conservative hoarder, or somewhere in the middle, start shaping your mindset now.
For every success, there will also be numerous setbacks and failures. Each time, you will have the mindset that enables you to keep climbing back up that ladder, making that courageous leap, and flying through the air like a trapeze artist. Once you’ve achieved this, you will strive to do it better with even more grace. Then you will seek to fly higher.
You have the confidence, persistence, and stamina to scale your company and sustain it. Your determined money mindset will enable your business to reach unbelievable heights, and you will create happiness throughout your journey in the air.
It’s time for you to fly.
Voice for Business Success
Allison Maslan, CEO of Pinnacle Global Network, The World Leader in Scaling Businesses. She is the Wall Street Journal Best Selling Author of, Scale or Fail, which is endorsed by Daymond John and Barbara Corcoran of Shark Tank. Allison’s built 10 successful companies starting out at age 19. Her client list has included Ben & Jerry’s, Supercuts, Charlotte Russe, and Allstate.
Now she and her team of CEO Mentors pay it forward by helping business owners scale their companies, fast-track their success and create a more meaningful life. The Pinnacle Global Network, her private mentoring and mastermind enterprise has guided thousands of business owners over the past 10 years. Allison’s been featured in Inc., Success, Fortune, Fast Company and Forbes Magazines, is a regular contributor to Entrepreneur Magazine and a featured expert on ABC, CBS, NBC, CNN and Fox across the US. Allison has also hosted her own podcast, The Scale or Fail Show, since 2011.