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Business and Lifestyle Design

When I was a child, business was a meaningless concept to me. While I did appreciate the value of economics as a fascinating discipline, business had a slightly shady touch to me. I never considered myself a business man in any way. I was a scientist. A philosopher.

When I grew up, my perception slowly changed. Today I believe that what we call business merely describes a part of our lives — the part related to the management of the assets and resources available to us. It describes whether we are conscious of the value we produce for ourselves and others, and whether we control how that value gets captured and redistributed.

It allows us to manage our lives so that we have enough time to live.

Business as lifestyle design

Some people think that running a business is not for them. They have a job and they don't consider themselves capable of having a business. To me, a job is also a business. It impacts your cash flow and turns your time investment into money which you can then invest in other assets.

Understanding business concepts is an important element of lifestyle design. I believe that many people are unable to design the lives they want to live well enough because they know too little about business — when the best thing that can happen to you is to turn your passion into a business. Think: artists are businesses, musicians are businesses, writers are businesses.

Looking in the mirror

Imagine you wake up in the morning and you look into the mirror and ask yourself the following question:

If I had the option of not going to work today and doing something else instead, would I still want to go to work?

If the answer is "No" (or "No" too many times in a row), then chances are that you are not living the life you truly want to live. It means that you haven't yet designed your life in a way that allows you to identify your every-day work with what you honestly care about.

Foundations of a business

Whether you work as an employee or manage your own company, the following questions may help you understand how well your business activity is aligned with your lifestyle.

  1. Are you leveraging your talent? Are you creating a disproportionate amount of value for every unit of time you invest in working? If so, are your personal returns consistently growing over time? Are you accumulating assets? Are you building a machine that will generate passive income for you in the future? Will you be able to downsize the amount of work you are doing while maintaining your cash flow? In short, are you improving your situation over time?

  2. Are you in control of your investments? Think: pension funds, retirement benefits, social security, insurance, real estate. Who decides what to invest in and how — you or someone else? Do you have an individual investment strategy? Do you feel confident that you will always be in control of the assets your work accumulates over time?

  3. How many potential clients do you have? When you work as an employee, you have only one client — your employer. But whoever else is interested in your work might count as another potential client. Having lots of potential clients means lots of opportunities. It means having a secure business foundation. When you are on your own, your skills, your creativity, and your drive define your market value.

  4. How much do you pay to banks and governments? Employees have to pay their taxes before they can to do any investments — about 50% of most salaries are almost immediately confiscated. Companies are instead allowed to invest their money before any taxes are paid. That's a big difference. And it's not just that: What about banks, credit card companies, and leasing contracts? How much are you paying to people you owe money? How much are you getting from people because you invested in them?

Building a business

Think of business concepts as yet another set of tools helping you design your future. Think of financial literacy as the first aid course for your cash flow. Financial health translates into physical health. Leverage your talents to improve the conditions of your life over time. Build a foundation for yourself and your loved ones. Do the things that create the most value for others and you will build yourself a market.

But don't waste your time doing things you don't like.

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Reader Comments (1)

Hi David,

strong article. However, I disagree on one point. I dont think that a job is a business. I mean, it could become a business if you are aware that you have to reinvest your paycheck to build assets to grow your cash (in)flow. But i think most people that go to work dont do that. They rather buy stuff that takes money out of their pockets. A job can only be 'your business' if you use the salary it puts in your bank account to build assets.

But that's just my humble point of view. I am looking forward to the other guys opinion on that.

February 15, 2012 | Unregistered CommenterThomas J.

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