Do You Have to Become an Entrepreneur to Achieve Financial Freedom?
Recently, someone on facebook share his view on financial freedom. His view was centred on how to be financially free. He specifically argued that entrepreneurship has become hype; that, it is not a must to become an entrepreneur to achieve a state of financial freedom. Of course, he has points but unable to convince me enough.
Entrepreneurship is traditionally defined as organizing and managing a business for the purpose of making profit. Recently, entrepreneurship is being view from different angle most especially as solving problems. Experts’ belief the best way to go into entrepreneurship is to have a mindset of providing solution to some of the day to day challenges and problems that people are ready to pay for. Let me add at this junction before making my points that not every entrepreneur is financially free but every rich person is an entrepreneur one way or another.
I believe one of the reasons why people believe you don’t have to become an entrepreneur to achieve financial freedom is their inability to differentiate between having money and becoming financially free. There is a great different between them. Let take for example the entertainment celebrity in the sport, music, movie world. They earn it big and many of them spend it as they earn and at last end it broke. It is few among them who use their entrepreneurship instincts that put the money into other money generating activities or assets which make them being richer or not broke after the earning from the performance stop coming. That is the real definition of financial freedom. It’s all about having money coming in from your business or assets without getting involved and having freedom to do whatever you love to do without getting worried about the financial compensation.
In the cause of explaining earnings to people, there is always confusion about investment and business (entrepreneurship). If the dream of being financially free is important to you, if making it big is a reality to you, then even putting your money into landed property should be treated as entrepreneurship.
A partial or full venture capitalist is an entrepreneur, and at the same time an investor; invariably, every investor is an entrepreneur. Although an entrepreneur believe in starting and developing an idea, skill, talent etc to the points of generating income and profit from it, an investor put his/her money in venture he believe is profitable.
Since financial freedom is about setting up money generating activities or system to make money without getting involved, definitely some people will be running and managing the system. In other words, other people’s skills and experience will be required. J. Paul Getty says that “one of his secrets of success was to utilise 1% of 100 people’s time rather than 100% of his own time”. No one can claim being rich or financially free relying solely on his own effort. Someone says, your employer only pay you $1 out of $1000 you generate. I don’t know how true is that, but from experience it is less than 5% of what your efforts generate.
You can earn it big alone, but being financially free post a question of whether the wealth can outlast you. I mean can it be transfer to generation coming. Where you start or where you are doesn’t matter, but where it will end at last.
Those who claim you don’t have to be an entrepreneur to be financially free may be right looking at it from entry points, but I bet it will end it being an entrepreneur to sustain it. We have seen employees of the same industry or company coming together to start it big moving from being rich to being richer and becoming financially free. Some are smart enough to meet the right investors and directors who believe in their ability giving them the opportunity to end it being a shareholder holding a controlling stake in the company they work for, while others use the proceeds from their employment to become a venture capitalist.
Let me state once again, being financially free is not having money in your possession. It’s about the process of generating the money and keeping the money moving to generate more money. If this is the case, then the person that says being an entrepreneur is not required becoming financially free is wrong. Keeping the moving working is an entrepreneur job. Having the final say and deciding whether they should spend the money on what and what.
A side note to this is that, if anyone inherit the wealth from you but lack the ability to keep the money working rather than spending it, can he/she be financially free? After all he inherited millions and billions of dollars; he/she is in possession of money. Does that mean he/she is financially free?