The Education of Millionaires - Michael Ellsberg [88]
After the initial scare in 2008, during the worst recession in a generation, in 2009–10, while everyone else was running for cover, she expanded her business by close to 30 percent. (This shows the power of learning the skills for success.) She clocked over $230,000 in sales in her private coaching, group coaching programs, teleseminar series, and virtual programs in 2010—and this part of her business has almost no overhead.
The vast majority of college graduates would envy the position in life Jena has created for herself through her hard work and self-study : earning great money on a flexible schedule, while making a positive impact on many people’s lives and being able to treat the recession as an afterthought.
So, in sum, how did Jena amass a formidable net worth during her twenties without a college education, while I amassed a formidable Ivy League education during my twenties without much net worth?
The answer is simple. Jena bootstrapped her education and her earning power. I didn’t.
Bootstrapping is a concept central to the themes in this book. In the world of business, it’s a strategy that involves getting to the point of profitability as quickly as possible—even if the profits are small—and then continually reinvesting profits to fuel growth. This is how John Paul DeJoria, Jena, and nearly all the others we’ve met so far in this book, including Bryan Franklin, Anthony Sandberg, Elliott Bisnow, Eben Pagan, Frank Kern, David Ash, and Marijo Franklin, built their initial success. In order to take this tack, the emphasis from the get-go has to be on frugality and on generating revenue right away. It derives its name from the phrase “pulling yourself up by your own bootstraps.”
And, while the concept of bootstrapping is usually applied to business strategy, it can also be applied to your own life. That’s where the real relevance to this book comes in. You can bootstrap your own education (including your continuing and professional education as an adult), and you can bootstrap your personal investments of time and money in your own career, just as you can bootstrap a business.
The essence of bootstrapping is keeping expenses low, generating income right away (even if it’s just a little bit), and continually reinvesting as much of that income as effectively as possible into expanding your future income.
Jena was a model bootstrapper from the start. She had a strong cash-generation ethic from a young age. (I call it a “cash-generation ethic,” rather than a “work ethic,” because many people have a work ethic while toiling away at low-leverage jobs, thus not generating much cash.) She started working a paper route at twelve, then at a series of retail and waiter jobs starting at fifteen. She began supporting herself fully (including rent and food) at eighteen, and developed a formidable penchant for frugality, for savings, and for always keeping her net worth positive and growing, from a young age. She got her education inexpensively, through life experiences (you learn a lot traveling through India for two years on $6,000 you earned yourself) and through low-cost vocational training.
In her early twenties, with no college debt, she busted ass networking and prospecting, got thirty client-hours a week as a freelance yoga instructor and holistic health coach at $100/hour, kept business expenses very low, and lived frugally, cooking her own food, paying $275 a month in rent for a shared room in New York City, and choosing to take the building up of her business as her main form of recreation, over passive consumption. She was often saving $40,000 a year or more, the majority of her net income, year after year—which is more than many people with $500,000 or more of income save. You start to build up a significant nut pretty quickly if you keep doing that. Around three years ago she then began investing those savings in