The Education of Millionaires - Michael Ellsberg [89]
To get a better sense of what bootstrapping your own continuing education and personal investments might mean for you going forward, let’s look at the opposite of bootstrapping—lots of up-front expenditures and debt, with little up-front income generation. This is how a great deal of Americans “invest” in their human capital, and it’s how I myself lived during my twenties. Rather than bootstrapping, it might be called “charging the boots on credit card.”
Hey, I’ve got an investment opportunity for you. It’s going to require an investment of about $45,000 to $200,000 on your part over several years. Given your current finances, you’re going to need to borrow a large part of that amount, that is, invest on margin, but that’s OK, the rates are pretty low. (One thing you should know, though, is that if the investment goes under, you’re personally on the hook for that money, until you pay it down, for the rest of your life. There is no way to discharge the debt in bankruptcy, and your future wages and social security benefits could be garnished if you can’t pay.)
The business I’d like you to invest in is, well, sort of in the exploratory/development phase. It doesn’t really know what business it’s in, to be frank, or what product or service it sells. In fact, it may not even know that for a few years. The chief executive in the business may have to move back in with her parents at some point during this time—before she figures out the business’s mission, revenue model, or core competency. (Oh, and by the way, the CEO is quite immature. She is often irresponsible and from time to time becomes distracted by side projects, like partying.)
The business you’re about to invest in has absolutely no knowledge or experience in sales or marketing. It doesn’t even really know how to keep its own books or balance a budget, and often runs up a lot of credit card debt. It’s not even sure it wants to be a business; the CEO may want to start a nonprofit, pursue a passion in acting, or go help orphans in Botswana. The chief executive has no business network or contacts to speak of, and in fact has no experience whatsoever running a business.
Wanna invest?
Unfortunately, this is precisely the way many people in America go about investing in themselves today. It’s the opposite of bootstrapping. It’s high-expenditure, high-debt up front now, and revenue (if at all) much later.
Think about it. Most investments in human capital (i.e., education) are made four, five, or even seven years before the “business” being invested in (you) will produce any additional revenue from the investment in capital.
From a bootstrapper’s perspective, that’s an incredibly foolish investment. If you want to take the bootstrapping approach to self-investment and development of your human capital—the way the people in this book did—the way to do it is incrementally, step-by-step.
Make small, incremental investments in your human capital and earning power. Buy some of the books I recommend. Take workshops or online training programs to learn different success skills. Invest in your network of connections and mentors by going to high-quality conferences, workshops, expos, trade shows, meet ups, and retreats related to your field and to the success skills in this book. Find a high-quality business or career coach. Then, when these investments pay off in a year or two, use the increased earnings from these investments to make even more investments in your earning power and human capital, again and again, in a snowball effect.
This is how most of the people I interviewed in this book went from “rags to riches.” It’s an approach to investing in your human capital so different from the approach most people take. Which is why they get such different—and far superior—results than most people get.
■ CYAN BANISTER—BOOTSTRAPPING YOUR EDUCATION
WARNING! Do not do this from your work computer:
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