Financial Resilience: Your license to live without worry

Published on October 16, 2019

Whether you’re an entrepreneur or an intrapreneur you should consider building financial resilience for yourself through investment outside of your business or your employment.

The psychology of entrepreneurs is generally one of extreme optimism that is not always grounded in reality. Entrepreneurs are always pushing and often looking for overnight success. In New Zealand for every 100 businesses started, approximately 58 of these businesses will fail within the first five years and of the remaining 42, an even smaller percentage will survive to the 10 years mark.

That is a scary statistic, and for the entrepreneur it takes indefatigable optimism to push on despite these numbers. This doesn’t mean that people fail, but businesses do! For the entrepreneur it is often a case of try, try and try again.

The psychology of the intrapreneur is quite different. Often the intrapreneur operates under the illusion of financial stability. While the paycheck may be regular, it is rare to find employees who have more than three months earnings saved.

If you work for a startup or a company less than ten years old, the statistics show that there is a large chance within 10 years that the business won’t succeed and you will be looking for a new job when it fails.

Even if you work for a more established organisation the chances of you being restructured or made redundant at least once during your career are high.

In either scenario, will you be able to find a new job at your current salary before your savings run out?

Could you afford to make less money than you earn at the moment?

The frightening truth is that most New Zealander’s have no financial plan and give little thought to their retirement. The reality for many is that in retirement they will be reliant on the NZ Super (government pension) which is $411.15 per week for a single and $632.54 per week for a couple.

Could you and your partner live on this after you’ve stopped working?

And by live, I don’t just mean covering your rent or mortgage. Could you live on this and go out for dinner once a week, perhaps go to the movies or travel? Your options in life dwindle significantly relying on the government.

This is why it is so important for both the entrepreneur and intrapreneur to have a plan outside of their business, their current employment or the pension to invest for the future.

Building a financial fortress around your family’s future that insulates them from the highs and lows of life is ultimately up to you. It’s not only “possible”, it’s also achievable by establishing a structured investment strategy that operates on autopilot over time.

In next week’s article, I’ll be sharing about HOW to invest. You’re going to want to read this one, it’s going to be packed full of investment advice that I have used personally. Until then!

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