In today's episode we discuss wealth mindset. Make sure to tune in to find out what the difference between a Entrepreneur is vs an Intrepreneur, and some of the different mindsets between employees and business owners.
In order to build true wealth it is going to be necessary to think like an entrepreneur, in other words looking at ways to add or create value. Kevin and Christian look at the difference between an Entrepreneur vs an Intrepreneur and some of the different mindset characteristics between employees vs business owners
In this episode of WealthTalk, Christian and Kevin discuss:
Links and a full transcription of this episode can be found at www.wealthbuilders.co.uk/wealthtalk
Join the WealthBuilders Facebook Group: www.wealthbuilders.co.uk/facebook
Chris Rodwell: Welcome to episode five of WealthTalk. My name is Christian Rodwell, the Membership Director for WealthBuilders. I'm joined, as always by my side, Mr. Kevin Whelan.
Kevin Whelan: Hello.
Chris Rodwell: Hey Kevin. How are you doing?
Kevin Whelan: Good to talk to you again.
Chris Rodwell: Can you believe we're already at episode five?
Kevin Whelan: Five? Wow. What have we covered so far?
Chris Rodwell: It's flown by. Well, let's recap, shall we?
We looked at the intro first week, obviously. Really giving our listeners a bit of understanding, backstory, as to who WealthBuilders are.
Kevin Whelan: Yeah.
Chris Rodwell: Then we went into the three Ds.
Kevin Whelan: Oh, I love the three Ds.
Chris Rodwell: Yeah.
Kevin Whelan: Do you think people worked out who they were?
Chris Rodwell: Well, if you haven't listened to episode two, go back and check out the three Ds, and see if you can self select there, and we hope that you enjoy that one. Then we moved into talking about the five levels of wealth.
On the last episode, we covered debits, which is the foundation.
Kevin Whelan: Yeah, it's the financial foundation, Chris. It's really important whenever you're starting to think about your wealth, that your ... Our mantra at WealthBuilders is, together we create, build and protect your wealth. The foundation really is the creation stage.
If you remember, we talked about the debits, the debt, the education, the bills, insurance, and so forth, ways to save money, and then put that money to work. When you save money and then make it work to create wealth, you're in the creation stage. But that's only half the foundation, Chris.
There's a second half of the foundation, which is absolutely critical if you're going to then come above ground and really accelerate building wealth, not just make a few savings, and make a small difference to your monthly outgoings.
Chris Rodwell: What is that area, Kevin?
Kevin Whelan: Well, that's mindset. It's an often said thing, isn't it? Get your mindset right. But I think it's really important to focus on some of those areas of mindset. Maybe we'll start with some of those that you picked up in your book, which I thought were great.
Chris Rodwell: Yes, I did include this actually in my book, Sack Your Boss, and it's coming really from the difference between the employee mindset, versus the entrepreneur mindset.
I know you've said many times, that in order to build wealth and become wealthy, you really need to think, and become a business owner and an entrepreneur. There's a very distinct way of mindset between those two, aren't there?
Kevin Whelan: Yeah. I don't think that's absolutely right, because the issue with wealth is all about the flow of money, from the creation of a solution to a problem. In other words, you have to see, understand and create value. When you're an entrepreneur, you're used to that. You're in the place of seeking that. That comes from the very creativity.
But it doesn't mean you can't come from a place of being an employee, for example, and not begin to be more curious about where your value is being added. Because at the moment, if you're an employee, you're generating intellectual property, you're just leasing it or renting it for the hourly rate.
There's an interesting one that I always use, [crosstalk 00:03:12].
Chris Rodwell: Yes, please do share that.
Kevin Whelan: Do that one?
Chris Rodwell: Yes.
Kevin Whelan: As you'll know in probably later episodes, we'll talk about intellectual property as a real wealth building asset.
Chris Rodwell: One of the seven pillars.
Kevin Whelan: One of the seven, number six. Obviously, both you and I are authors, so we've got some value in that. But everybody's got IP, the fact that they're delivering their own intellect, but when they deliver it in a job, they're sort of selling that for an hourly rate.
The easiest way to get a sense of that, almost bring it to life, is to say, well, the hourly rate most people work, I guess, a lot longer than we think, but let's say conversationally, 2000 hours a year, 50 weeks-
Chris Rodwell: A couple of weeks holiday.
Kevin Whelan: Yeah. 40 hours, you know that's ... I'm sure some people are laughing already, thinking, I do 60 hours a week and more fool you, but there you go. So 40 hours a week, 50 hours, 50 weeks, 2000 hours. So simply then, if someone's got a salary, you can work out the hourly rate by simply taking the salary and halving it.
If someone's on 50,000, it's 25 pounds an hour.
Chris Rodwell: Yep.
Kevin Whelan: If they're on 100,000, it's 50 pounds an hour.
Chris Rodwell: Yeah.
Kevin Whelan: So you know the value of your IP, but you're getting paid for it in kind of an hourly capacity.
Chris Rodwell: Another point to mention there, that's the before tax, and employees are taxed at the highest rate.
Kevin Whelan: Oh yeah, that's another point actually.
Chris Rodwell: But we're maybe diving into a whole new subject.
Kevin Whelan: We're getting ahead of ourselves on tax. Let's keep to mindset.
Chris Rodwell: Let's pull it back to the mindset here. I know there's another term, which I just would love to explore, and that's, what is the difference between an entrepreneur and intrapreneur?
Kevin Whelan: Okay. An entrepreneur is somebody who is creative, generally. They take an idea and they're creating more value. They're getting leverage from turning the performance of an asset from one level to a higher level. And they're doing it normally in the confines of a business, and that's pretty easy to see. Most people think about entrepreneurs as business owners.
But an intrapreneur is somebody who works inside a company, it could be an employee. Instead of seeing themselves as the employee, craving more security, let's say, and maybe we can touch on that, what they're doing is seeking to be, and imagine, they're a team player trying to create the highest value they can for the very team they're playing for.
Like a footballer, we just had the January transfer window, right? You're seeing footballers change from one team to another. Changing jobs is a bit like that. So if you focus on creating great value, then that value can lead you to a number of things, which could help your wealth.
One, is you become so indispensable, you get a higher pay because you're just doing outstanding pieces of work.
Two, you could, if you really thought about it, is if you had enough of a solution-based mindset inside the job, you could go to your employer and imagine a conversation that says something like this. "Chris, I've got this great idea. I've been working here for a little while, and I've had awards and you've told me how good I am, but I've got this idea, and this idea is going to save the company a half a million pounds. Now, if I could apply that thought and bring it to the company, can I have a teeny tiny little bit of that?"
Or the other way around. "I can see a market that I've just discovered by thinking about it, and that might create another million pounds in sales for the business. If I could orchestrate that and be part of that, could I see myself getting a teeny tiny little bit of that?"
Chris Rodwell: Absolutely.
Kevin Whelan: It's just being bold to focus on your value, instead of craving security, which is what most employees tend to rely upon.
Chris Rodwell: Which again, just comes back to this way of expanding the way you think, and thinking outside of the box, really challenging.
There's some distinct differences that we've both been discussing, and I mention these in my book as well. The different ways that an employee mindset operates to an entrepreneur's mindset.
Kevin Whelan: Right.
Chris Rodwell: Maybe we can run through a few of these.
Kevin Whelan: Yeah. Well, talk about risk, for example.
Chris Rodwell: Well, I think an employee, they have more of a craving for security, whereas an entrepreneur really craves the freedom.
Kevin Whelan: Yeah.
Chris Rodwell: It's being more risk averse. Worrying about, oh, what happens if I lose my job? Actually, that could be one of the most risky places to be. Because if you're simply relying on one source of income, from an employee, and you were to walk into your job tomorrow and that job was no longer there, that's surely the most risky place to be.
Kevin Whelan: Well, I think so too. I think with the uncertainty we have, and the economy right now, just look at what's happening in car plants and places like that, job security is really likely to plague a number of different people in the economy. It's never a great place to be.
One of my friends, a guy called Mark, who uses the term a lot, he says, "What I love to be," as he's an entrepreneur, "Is in control of my personal economy." I think we heard him say that just this week.
I think that's a brilliant turn of phrase, because it says, I want to be in control. It's not taking bigger risk, it's actually reducing your risk by being willing to essentially manage your risk, both inside your business, let's say. Inside the stock market, if you're an investor in the stock market, there's ways to mitigate and take care of risk.
In many respects, and I'm an entrepreneur too, I feel safer than any employee I know. Because I know if the interest rates go up or down, I'm doing okay. If the stock market goes up or down, we're all doing okay if we're entrepreneurs, getting the results that we want in our businesses and in our life.
That's why I would encourage everybody, even if they're not willing to take the risk yet to be an entrepreneur, to definitely think like an entrepreneur, and try and create value for whichever team you're playing on.
Chris Rodwell: You've said before, I'm sure so many more times on the podcast to come, that one of anything when it comes to wealth building, is risky. And this is, of course, the whole WealthBuilders motto of the seven pillars.
Kevin Whelan: Yeah.
Chris Rodwell: That the more pillars you can put in place, the more recurring income streams that you can have flowing in, then you become financially bulletproof.
Kevin Whelan: Exactly right. Couldn't agree with you more.
What are the other mindsets we notice that would be worthy of a little airing?
Chris Rodwell: Well, I think a really clear one that I've recognized is the entrepreneur mindset of just doing. The entrepreneur needs to do in order to know.
Kevin Whelan: Yeah.
Chris Rodwell: And the employee needs to know in order to do, so very much just following the rules. And maybe you could say the entrepreneur breaks the rules, or certainly bends them and challenges them.
Kevin Whelan: Well, I think the entrepreneur kind of comes from a place generally of, in many cases, they're inventing the rules. I think I relayed my story where I didn't have a guide, I didn't have a mentor, and it's great if you can follow those things because you can get to where you want to, faster. But if you don't kind of know ... there isn't a path well trodden, you've got to create that.
But what's brilliant now, is so many people have trodden those paths. The journey from being an employee to an entrepreneur is quicker, because you can just follow the path that's already been laid down by somebody else. The WealthBuilder community is all about that, and connecting people who are ready to look at different ways of exploring the entrepreneurship.
Let's be clear, Chris, we're not saying to people, "Go sack your boss today." We're saying think about ways you can add value in your firm, in your job, but find some time, create some leverage of time. Remember we talked about podcasts being a way to get information, and multitask on those things. Create a little bit of time in your life to dedicate to looking at your entrepreneurial side of things.
That leads to important conclusion, I think, which again I see is a big difference between employed people and business owners. The main is the way they view cost versus investment. What are your thoughts on that, Chris?
Chris Rodwell: Yeah, absolutely. That when it comes to education being the first thing really, you need to understand, if you have never done something before, then it's an investment. You're investing your time and your money to learn that skill, to make sure that you don't make mistakes, and you can accelerate your progress.
Whereas, those that haven't quite had the light bulb moment, we'll see that as a cost, and think, "Oh no. No, it's too much." It's a completely different way of looking at it.
Kevin Whelan: Yeah, and I'll tell you something interesting about when we get to work with people, and we often see the DIYers. Remember the DIYers?
Chris Rodwell: Sure.
Kevin Whelan: The DIYers, their first question is always, "So what's this going to cost?" They come at it from that mindset of cost comes before value, and it does not, it's the reverse of that.
If I said to you, "Chris, I'll tell you what. The cost of whatever I'm offering you now is 1000 pounds," will you pay it? Well, you wouldn't unless you knew what the value was.
Chris Rodwell: Yeah.
Kevin Whelan: So if I said, "If you invest 1000 pounds, I will guarantee you 2000 pounds," is that now an investment worth making? Assuming everything was legal, above board, and you could understand it.
Chris Rodwell: Sure.
Kevin Whelan: The way we work at WealthBuilders, in any event, is always to make sure that we look someone squarely in the eye and say, "Before you spend any money and invest any money with WealthBuilders, can we both agree that the purpose of this is to make you wealthier than you were before? Otherwise, you can have your money back, or we simply will agree not to work together." That way whenever people work with us, there is no risk.
Chris Rodwell: Yeah. It's a condition of doing business together.
Kevin Whelan: That's absolutely right. Yeah.
Chris Rodwell: One final point I think is really important, is the vision. The entrepreneurs have this ability to look into the future and picture, and create a picture of how they want something to be.
Kevin Whelan: Right.
Chris Rodwell: And that's a distinct difference, I think, between the employee who often will look back at past [crosstalk 00:13:53].
Kevin Whelan: At their results, yeah.
Chris Rodwell: And base things on those.
Anything to add to [inaudible 00:13:59]? We talked about knowing your why, and that kind of is wrapped up with vision as well, I think, in some way.
Kevin Whelan: I think it is. I think about vision, is to imagine your future is always bigger than your past. Because if where you are now, if you're drifting, and I had a conversation with a drifter today unfortunately, and that conversation meant I could see they were going to be stuck in the same path unless they brought themselves out of it, and they recognized that in the conversation and that was great. So they'll come out of that.
But generally speaking, if you're always thinking that the future that you have in mind, whether it's a personal future in terms of your own self, because the wealth building process is a transformational process, not just of money, but of self. If you see your future is bigger than your past, you're driving forward looking through the windscreen not looking at the rear view mirror, then of course it's much more interesting.
You can chart your progress, like a GPS, you can see you're moving through levels, and each time you are engaging in building another asset, then you're moving from one level to the next level incrementally, and you can always see where you're going. You can't really see that in a job, you don't get the incremental or that big acceleration. There tends to be small little steps in pay, and maybe not even that these days.
Whereas wealth, once you've locked it in, you're absolutely moving forward. Once you get through that initial part, we talked about the five levels, once you get through security and you've overcome the gravity of getting you from a place of insecurity to that base level of income to cover all of your bills, then once you get through that, you accelerate. It's a massive acceleration, and that sort of acceleration never ever happens in jobs.
Chris Rodwell: Whilst you're talking about acceleration, you're either accelerating or you're braking.
Kevin Whelan: That's right. There's no neutral when it comes to building wealth, and that's a good observation too.
How do we think we can help people identify where their best value would be, if they're either in a job or in a business? The thing I noticed about business owners, let's not make the assumption, Chris, that business ownership in itself makes a true entrepreneur, because in many respects it does not.
If we go back to ... One of the things that comes out in the E-Myth is the technician, the person doing the work, being an accountant, being a hairdresser, whatever it would be, they tend to do the job of what they were doing in their job, in their business. Suddenly, instead of having just the one thing to focus on, because their employer took care of the payroll, their employer took care of all the other things, now they're inundated with many tasks, and not always the task they want to do.
It's really important that people stay true to what's their best way of adding value. There's a tool we use to help people get that value, isn't there?
Chris Rodwell: There is, and we've talked about it already on the podcast in previous episodes, Wealth Dynamics.
Kevin Whelan: Wealth Dynamics.
Chris Rodwell: Which, we're both very big fans of. We see the value. Put all my clients through that as well. It's an online test, which takes about 20 minutes to take, and it's amazing for identifying what your genius is. Whether you're a creative person, by really helping you to hone in on the areas that you should spend most of your time focusing on, and identifying your weak spots. Where instead of trying to learn and get better, that's where you can build your entrepreneurial team around you.
Kevin Whelan: Well, that sounds like a big one. We're going to talk about team, we're going to talk about getting in flow, we're going to talk about Wealth Dynamics. That feels to me like a good time to-
Chris Rodwell: That feels like episode six to me.
Kevin Whelan: Well, why don't we go do episode six now?
Chris Rodwell: Let's do that one.
Kevin Whelan: See ya.
Chris Rodwell: Thanks Kevin.