[Place Your Name Here], Inc.
By John Burnett
Imagine a society where everyone owned and operated a business. Well, technically, every household is like a privately owned business with responsibilities that include managing daily operations, seeking opportunities for growth and investing for the future.
People that work every day to make an honest living often feel and think they are not in control of their financial destiny. Perhaps, it would be unfair to compare yourself to a major corporation or global conglomerate, but fundamentally, there is very little difference. You are probably asking, how so?
YOU are the unique and appealing product and service. Individuals sell their labor to employers for a set hourly wage or annually salary with specific payments terms (e.g., weekly, bi-weekly or monthly).
Some individuals can charge more for their labor based on experience, education or specialized training that makes their services more valuable than others in the marketplace. The key here is to differentiate your product and services to command a higher price [salary or wages] or at least keep pace with the market.
If you do not continue to invest in new skills and stay informed of industry expectations then it will be challenging for you to command a higher salary or offer greater value compared to what someone else may be able to provide to an employer.
Similarly, if a business is not managed effectively, then they lose money and receive bad credit ratings. The same is true for households.
What is equally as important is that every business decides on which products or services to sell at competitive prices. Companies spend money and time on new product development to meet customer needs, while making enhancements and improvements to existing ones. All of which is done to differentiate their products or services from their competitors. If these business essentials are performed correctly, it can lead to maintaining consumer brand loyalty and making more money for shareholders.
The same is true for individuals and families. You decide on an industry in which you want to build a career or type of business to own and operate. Your resume, experience and how you present yourself is your brand. It is up to you to improve your personal brand, education and skills, as well as keeping up with trends in the marketplace. Whether you are seeking career advancement or to grow your business, you must invest in yourself and those in your household (shareholders) to build your family brand and wealth.
The same holds true for a business owner. If you do not constantly improve your product and service to provide value-added benefits or seek new products to offer, then your customers may begin patronizing other establishments. It is essential to continue to advance your level of education via college, vocational school, continuing education programs or engage in self-learning. A key question for you to answer as an employee: What value-added benefits set you apart from others job seekers?
The next focus is on the management of your finances. After the operating [living] expenses, loan payments and other obligations are all paid on a weekly or monthly basis, you are left with a profit or more commonly known as disposable income (also called discretionary income). You have the discretion to spend the remaining income on depreciating assets consisting of goods and services or invest a significant portion in assets that increase in value and generate passive income.
There are many investment options for consideration that help empower you now and in the future. For example, investing in an education savings plan (e.g., 529 Plan) and assets (e.g., securities, real estate, etc.) that generate income helps you increase your ability to enhance your quality of living, while you are working and enable you to live better in retirement. Whether it is investments in real estate, starting your own business, investing in stocks and bonds or all of the above, the key thing to remember is that you should take control of your own destiny.
Let me know your thoughts about this article or send me a financial question to answer. Remember, be the CEO of your life and run your household like a business – grow and live better.
John Burnett is a financial services executive with over 20 years of experience in risk management, operations, governance and compliance at some of the world’s top financial services and business information companies. John is a former 2013 republican candidate for New York City Comptroller. Follow him on Twitter: @IamJohnBurnett and Facebook Fan Page: /IamJohnBurnett
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