Entrepreneur’s Wealth Digest
The word retirement evokes an image of someone old, tired, and resting. The definition of retirement should be: “The point at which work is based on choice and not on the generation of wealth”. Entrepreneurs may hit this point at any age. We work with financially free entrepreneurs in their 20s and 80s. Now, that does not mean that we can’t or won’t generate more wealth past that point of “retirement,” but it does mean that we have hit the level of wealth that we need to feel financially free to do what we want with our time.
How do you know if you are financially free or how much more you need? I wrote about this in my book The Abundant Entrepreneur and call it the Enough Number. Meaning, how much do you need in lump sum wealth and recurring passive cash flow to meet all the personal goals you and your family have for the rest of your life? You can download a simple version of that calculator here. Understand that this is a pretty basic exercise to set a baseline, but it does help you to set expectations. Do I need $5 million and $250,000 of passive income or $25 million and $900,000 of passive income?
Have you already hit this point but you’re not interested in exiting your business? Great! Financial freedom is not about shutting it down but about living life on your terms. The most common sentiment we hear from entrepreneurs who are past that point is that they don’t want to slide backward or lose what they have. That is why we base our work on the four pillars of entrepreneur wealth; Get Clear, Grow Capital, Manage Risk, and Entrepreneur Equity. Each of these pillars is designed to focus on your life, your wealth, and how we make sure that your wealth enables your life indefinitely. So things like business continuity planning and insurance are a part of keeping what you have. Investment planning and management also play a role. Additionally, being clear about your vision for your life, what you value as a family, and adjusting as those shift over the years is key. Managing taxes and being efficient with your dollars are both important as well. In summary, it is not one specific thing that ensures you keep your financial freedom but a process. A process built on getting clear about what matters most to you, aligning your financial resources to create those outcomes for you and your family, and managing risks so that nothing breaks or is wasted along the way.
Financial freedom and retirement mean the same thing to entrepreneurs. Being able to focus on building great businesses, employing good people, and creating value for those around us is the best retirement calling for most entrepreneurs. Make sure your wealth supports your vision so that you can continue living your remarkable life.
If you have a question or simply want to talk through your financial planning, we are here to help.
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DISCLOSURE: Jarrod Musick is an officer of Destiny Capital and Entrepreneur Aligned, a DBA of Destiny Capital. This article is for informational purposes only and should not be relied upon as a basis for your investment, business, or personal financial decisions. We recommend consulting with your wealth advisor, CPA/tax advisor and/or attorney, as applicable to your situation, prior to implementing any new tax, legal, or investment strategy.
Jarrod was born into financial planning and solving financial problems. With his financial advisor father Steve telling stories about finance around the dinner table from an early age, the idea that everyone has a different financial situation was always there. After an early professional career spent in nonprofit and government, Jarrod came back to his roots helping people plan and invest in 2011. Since then, he has worked with individual clients, led internal teams and ultimately became partner and the CEO of Destiny Capital in 2017. With a passion for helping entrepreneurs change the world, Jarrod ultimately oversaw the creation of Entrepreneur Aligned in 2020. With both Destiny Capital and Entrepreneur Aligned, Jarrod leads teams that help people live lives of abundance where money is simply a tool to let everyone be a positive force for the world around them. When he isn’t working with the talented teams for EA and DC you can find him chasing his twins, wily trout or a podium spot at an OCR race.