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Does Your Favorite Game Reveal the Type of Entrepreneur You Are?

Your favorite gameLife is a BIGG game for entrepreneurs.

The question is: Which game?

The answer is: It depends on which type of entrepreneur you are.

We think there are three types of entrepreneurs: Specializers, Serializers and Synchronizers.

Hear George & Mary-Lynn discuss today’s topic on The BIGG Success Show podcast. Click the player to listen.

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The game they play

  • Specializers play Solitaire. They focus on one business. They strive to master their craft so they can make more money.
  • Serializers love Legos. Now we realize that Legos is not technically a game. But serial entrepreneurs love building. They start business after business, always hoping to build something more spectacular the next time.
  • Synchronizers are playing Monopoly. They don’t want to own one business; they want a collection. They’re always trying to pass Go, so they can collect $200 and purchase another property.

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Mary-Lynn FosterMy favorite game of the three is Solitaire. I just love trying to get better at beating the game.

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George KruegerIt’s consistent with your personality. You love to master a craft – whether it’s radio, audio production, website development or consulting. You’re a Specializer, Mary-Lynn.

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Mary-Lynn FosterSo what’s your favorite, George?

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George KruegerAs many people will find, I have an affinity for two of them. My dad was a builder so I always loved Legos. But Monopoly is definitely my favorite.

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Mary-Lynn FosterIt makes sense. You’ve owned multiple businesses for most of your adult life. You’re mostly a Synchronizer.

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How they win

There are nuances for how you run your business depending on which type of entrepreneur you are. For example, each one has a unique strategy for winning:

  • Specializers win by taking the income from their business and investing passively. By doing this, they diversify their assets which reduces their risk. They also don’t waste precious time away from their core business.
  • Serializers will likely invest everything they have to make their first business a BIGG success. Then they take part of that money off the table and invest it passively while pouring the rest of it into their next business.
  • Sychronizers win by building a portfolio of businesses. They may never have much money invested in stocks or bonds. They trust themselves more than they trust the markets. So they are constantly directing income from their existing businesses into new businesses.

The key is figuring out how you build from a base of one business, which may represent a huge portion of your total net worth, to a more stable portfolio of assets.

It helps you make more money, more dependably. That’s BIGG success!

What’s your favorite game?

Reading and wRiting and aRithmetic

Back-to-SchoolIt’s Back-to-School season so we’re doing a ten-part series on lifelong learning. We’ve kicked it off with two shows on reading and writing. Now we want to talk about arithmetic.

We’re going to take a little different tack today than we have with the last two shows. We’re going to talk about two specific things we need to know when it comes to arithmetic.

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These two things both involve our personal finances. That’s why they’re so important.

The power of compounding money

The first one is compounding. This can be a little complex so we’ll offer an example that’s so simple we won’t even need a calculator!

2 + 2 + 2 = 6. 2 x 2 x 2 = 8.

If we add two together three times, we get six. If we multiply two by itself three times, we get eight.

That’s the power of multiplication. And money multiplies if you manage it properly.

Stuffing it in your mattress

That’s just numbers. Let’s apply it to money to make it more tangible.

Let’s say you have $2. You stuff it in your mattress. Next year, you get another $2 and put it in the same mattress. The year after that, you do the same. Now you have $6 in your mattress.

But you haven’t earned any money on your money.

Investing it

Let’s assume that you could double your money every year. Now understand that we’re just doing this for the purpose of illustration.

We don’t know of anything you can invest in and double your money every year. If there was such an investment, it would likely involve taking a whole lot of risk.

So you start with the same $2 that you did before. Only now you invest it and earn 100% on your money each year. Instead of $6, you would end up with $8.

And you only invested $2 one time!

If you invested all $6 at the times suggested above, you would have $14 at the end of the period.

That’s the power of compounding interest. It’s how interest works for you.

But it’s a two-edged sword. It can also work against you. We’ll talk about that more in just a minute.

Building Net Worth

The second thing to understand about arithmetic is the basic accounting equation:

Assets – Liabilities = Net Worth.

Of course, our goal is to increase our Net Worth. If we understand this basic equation, we can quickly see there are only two ways to do that.

We increase Assets faster than Liabilities

We decrease Liabilities faster than our Assets are decreasing

Let’s look at the extremes to keep it simple:

  • If we increase our Assets without increasing our Liabilities, our Net Worth increases.

  • If we decrease our Liabilities without decreasing our Assets, our Net Worth increases.

A painful vacation

Let’s get away from words and look at something tangible. Let’s say you borrow money to go on a vacation.

You don’t increase Assets at all but your Liabilities increase. So your Net Worth goes down. You lose financially. You may reap psychic returns but that’s a different post!

It’s the pain we talked about earlier. You have to pay for the vacation over time. You also have to pay interest on the money you borrowed. This is a situation where compounding works against you.

So what’s the key?

Find ways to increase Assets without taking on more Liabilities or invest in Assets that earn a return higher than the cost of your debt.

Money multiplies if you manage it right. That’s a path to bigg success!

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In case you haven’t heard, there’s a fantastic new book out. It’s called Trust Agents by Chris Brogan and Julien Smith. This book shows you the path to grow and maintain the most important asset you can possess today, your network.

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Thank you so much for checking in with us today.

We’ve talked about the 3 R’s we learned in school. Please join us next time when we begin talking about the 3 R’s of bigg success. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00463-081909.mp3

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The 5 Components of Your Credit Rating

credit_cardsBigg success is life on your own terms. Our focus today is on money, one of the five elements of bigg success.

Specifically, we want to talk about an asset that is particularly valuable now. Yet it doesn’t show up on your Balance Sheet. It’s your credit score.

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Target credit

This was highlighted in a recent post over at Mashable about Google ads targeting people with high credit scores. People with good credit are positioned to take advantage of these times. Not just with consumer goods, but also with investment opportunities. There are some great deals out there on real estate and businesses.

In addition, people with good credit will get better rates on the money they borrow. So if you have a good credit score, protect it like any other asset.

FICO

FICO was developed by the Fair Isaac Corporation. They have a great piece that explains how your FICO score is determined [PDF]. We’ll summarize it here, but we highly recommend you read their article if you want to know all the details.

Your FICO score can range from 300 to 850. Obviously, higher scores are better. Anything over 720 is considered SuperPrime according to the Mashable post. These are the people Google is targeting in their new ad program.

We’ll look at the five components of your FICO score (along with the weight given to each one for the general population).

Your payment history (35%)

Pay your bills on time. It’s probably no surprise that this is the single biggest factor in determining your score. If you’re not current, work hard to get current and stay there.

The amounts you owe (30%)

We found it interesting that, even if you pay your credit card balance in full every month, you may still show a balance on your credit report. It shows the balance posted on your most recent statement.

One myth they debunk is that you should close accounts so you don’t have too many credit cards. If you’re in good standing with no balance on an account, it doesn’t affect your FICO score.

However, you are better off having fewer cards with a balance. It’s also better to have a small amount outstanding compared to your available credit line.

Be careful not to have too much credit available. It can actually hurt your FICO score. So don’t get, or keep, credit cards you know you’ll never use.

Length of credit history (15%)

Here they look at the age of your accounts in general as well as how long it’s been since you used your account. One tidbit we found interesting:

If you just established credit for the first time, you’ll hurt your FICO score if you open too many accounts too quickly.

New credit (10%)

Here they look at what’s going on now. What credit have you applied for recently? How are you doing on those payments?

This is good news for people coming out of a period of late payments. Just remember, though, it gets a relatively small weighting.

The types of credit you use (10%)

You want a mix of both revolving credit lines and installment debt. For example, a credit card along with a car loan would include both types of credit.

Your credit rating is an important asset. It affects your credit capacity. Your credit capacity may help you fund your next bigg opportunity!

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Thanks for sharing some of your time with us today. Please join us next time when we talk about a higher level of problem-solving. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00431-070709.mp3

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4 Types of Free Agents

freedomThis is the final installment of our five-part series on freedom. In the first three parts, we discussed the 3 levels of freedom – freedom of, freedom from, and freedom to. Last time we talked about financial freedom.

Now we want to talk about the freedom to spend your time however you want. If you can do that, we think you’re a free agent. We’ll identify four types of free agents today:

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The Aggressive Passive

Aggressive Passives let their money work for them so they don’t have to work. They make enough money from their investments to pay for their desired standard of living. So they are free to spend their time however they want.

The amount of money you need to be an Aggressive Passive is a lot less if you’re perfectly content not living lavishly than if you want to live large. But it’s life on your own terms, go for what you want.

In our last post, we discussed paths to financial freedom. If you want to be an Aggressive Passive – and you want it sooner rather than later – you’re going to focus on the wealth building path. Maximize income, minimize costs and build Assets – most likely your own business or real estate.

The Passion Player

Passion Players love what they do so much that they don’t feel like they’re working. In many cases, their hobby is their craft and their craft is their hobby.

We have a friend who had built up an incredible business and sold it off. Now he’s back in the same type of business only this time he’s doing it with no employees. He chooses his clients very carefully. He takes plenty of time off, yet he’s still doing very well money-wise. He’s thrilled!

You may choose to work inside a corporation and be a Passion Player. Just keep in mind that, in addition to your work, you must love working for and with the people around you. Since you only have one client – your employer – that may be difficult at times.

Inside or outside of a company, your focus as a Passion Player is building up your personal brand. It may make sense to do this while you have the security of a full-time job. But there’s also some real security – as well as freedom – in moving from an employer (which is like having only one client) to multiple clients.

The Automatic Pilot

Automatic Pilots don’t just sell a product or a service. They don’t just create a brand. These free agents build a business.

In that business, they develop systems and controls. The systems insure a consistent standard of the product or service they offer. The controls allow these free agents to step away from their business without fear of it falling apart.

While they develop their systems and controls, they also train a protégé who can run the business in their absence. Once the protégé is fully trained, the entrepreneur is a free agent!

The Synergizer Bunny

These free agents sit at the hub of a network. They tap that network to bring the best people to the table.

Synergizer bunnies don’t just do projects with others. Bigg success comes to them by creating entire businesses through strategic alliances. Everyone involved is well compensated and the customers receive a great value. It’s a win all the way around.

That’s the key to becoming a free agent of any type: Help others find ways to improve their lives and you’ll be a bigg success.

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Would you like more tips and tools to live your life on your own terms?
Subscribe to the Bigg Success Weekly – it’s FREE!

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Thanks so much for checking in on us today. Please join us next time when we’ll discuss one of the best assets to have today. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00430-070609.mp3

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Three Levels of Freedom – Part 1

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6 Paths to Financial Freedom

(Image in today's post by svilen001)

6 Paths to Financial Freedom

freedomToday is the fourth installment in our freedom series. We’ll focus on financial freedom.

Financial freedom … can you imagine it? To use the lingo from our last couple of posts, it means freedom from money worries or, even better, freedom to choose how we spend and live.

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Financial freedom is just one piece

We’ve defined bigg success as life on your own terms. There are five elements of bigg success – money, time, growth, work and play. Bigg success comes faster when these five elements work in synergy; that’s part of the bigg idea behind bigg success.

So while financial freedom is a worthy goal, be sure you’re looking at it as part of the bigg picture. What does life on your own terms mean to you? Only you know the answer that’s best for you.

Framing financial freedom

You are the entrepreneur of your own life. As the entrepreneur, you need to understand the two basic financial statements: your Income Statement and Balance Sheet.

The Income Statement shows how much money you brought in the front door and how much money went out the back door. Financial freedom means more income and less costs.

The Balance Sheet shows how much you own (your Assets) and how much you owe (your Liabilities). Financial freedom means more Assets and less Liabilities.

6 ways to define financial freedom

  • Debt free

There are variations of this. You may consider yourself free if you don’t carry a credit card balance forward from month to month. Other people want everything paid off except their house. For some, they want no debt period.

You focus on the Liabilities side of the Balance Sheet with this path. You want to minimize what you owe. Better yet, owe nothing.

  • Low standard of living

Some people take this to an extreme, but they’re the only ones who have to be happy with it. This is a very simple, yet proven path. Focus on spending less so you’re free to spend the excess money however you want.

Obviously, this path focuses on the Expense side of your Income Statement. “Low” is a relative term; it means low relative to your Income.

  • High salary

Conversely, you can focus on making a lot of money. Make a lot more than you spend and you’ll feel free financially.

We called it “salary” but it can be active income from any source – commissions, business ownership and the like. Obviously, we’re on the Income side of the Income Statement here.

  • Cash in the bank

If you have an amount equal to three to twelve months of living expenses in the bank, you may feel a sense of financial freedom. It doesn’t have to literally be “in the bank.” For example, you may have the money invested in a money market mutual fund.

This is a Balance Sheet strategy focusing on Assets, specifically Cash and Cash Equivalents.

  • Retirement nest egg

Here you get that sense of financial freedom by having enough money stored up to allow you to live comfortably, without working, for the rest of your life. Your focus is on building up the Asset side of your Balance Sheet. Unlike our third definition, this path is about building passive income from these Assets.

  • Wealth-creation

For some people, financial freedom means being wealthy enough to buy anything they want. There are a lot of degrees here. “Everything you want” doesn’t have to mean a jet or a yacht, but it can if that’s what you really want!

This is a complex path. You’ll probably need to manage both sides of the Income Statement and the Balance Sheet. You may not try to minimize Liabilities; instead, you’ll focus on having Liabilities that have paid for Assets that make you money.

It’s important to define financial freedom so you can determine your goals. With your goals in mind, you can develop strategies to achieve them. That leads to bigg success!

What does financial freedom mean to you?

Share that with us by leaving a comment below, calling us at 888.455.BIGG (2444) or e-mailing us at bigginfo@biggsuccess.com.

We’re so thankful that you took the time to read our post today!

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Would you like more tips and tools to live your life on your own terms?
Subscribe to the Bigg Success Weekly – it’s FREE!

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Please join us next time as we wrap up this series on freedom. We’ll talk about being a free agent. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00429-070209.mp3

Related posts

Three Levels of Freedom – Part 1

Three Levels of Freedom – Part 2

Three Levels of Freedom – Part 3

(Image in today's post by svilen001)