FEATURED POST OF THE WEEK

Our long-form article of the week. You can always view the current and past featured posts on Empower’s blog.

The money (or business mindset): Five lessons from The Psychology of Money

I recently finished the book The Psychology of Money by Morgan Housel. While the book centers on lessons related to money, building wealth, greed and happiness, it’s also very much about creating a mindset. I found the concepts equally relevant to business, which is why I compiled the following five key lessons from the book that are valuable reminders for anyone on an entrepreneurial journey.

Lesson #1: Maintaining success requires humility

Accumulating money or early success in business requires taking risks and being optimistic. Taking big swings can lead to outperformance. However, maintaining that success once it comes, as Housel points out, demands something different:

Business relevance

Celebrate successes, but stay vigilant to protect what you’ve built. This mindset will better position you to persevere through challenges.

Key points

• Embrace a “barbelled personality.” Be optimistic about the future, but also maintain a survival mindset.

• Humility and a healthy dose of paranoia position you for long-term sustainability.

• Accept that part of your success is due to luck, and past wins can’t be relied on indefinitely.

• Don’t always be in a hurry. Success is a marathon, not a sprint.

Lesson #2: Optimize for freedom

Housel opens a chapter entitled “Freedom” with:

Money’s value is derived from the freedom it provides — the ability to choose what you do, when and with whom. This type of control is also generally linked to happiness. For entrepreneurs, it’s a reminder to grow businesses that grant the freedom they desired when they started.

Business relevance

Your business should serve your life, not vice versa. Prioritize building a business that opens opportunities and don’t be afraid to say “no” when a direction doesn’t align with your vision.

Key points

• Be self-aware about the things that truly make you happy.

• Structure your business to maximize personal freedom. This could mean building robust systems, choosing a business model not entirely dependent on your presence, or something completely different.

• Set personal and business financial goals that align with the freedom you seek.

Lesson #3: Drive efficiency in the things you can control

In money and business, we’re generally better off focusing on what we can control versus what we can’t. That doesn’t mean completely ignoring the uncontrollable, but rather not letting it consume you.

Housel illustrates this point with an example from the 1970s — the oil crisis. At the time, there were global fears about running out of oil. That didn’t happen, but it’s not because more oil appeared. Instead, the world innovated to produce more energy-efficient products and people thought differently about using this finite resource. All actions that were within society’s control.

Business relevance

Spend time optimizing what you can control to improve operational efficiency. Whether it’s enhancing a process, selecting the right vendors, improving customer relationships, empowering your staff or lowering expenses, there’s a lot you can impact. Use that to your advantage.

Key points

• You likely have more control than you think.

• Creating efficiency in what you can control yields more flexibility and outsized returns.

• Increasing efficiency allows you to seize opportunities and turn them into competitive advantages, particularly when others can’t.

Lesson #4: The future might not resemble the past

Housel discusses how people often fall into the trap of over-relying on historical scenarios. This often happens with “best” and “worst” case circumstances. However, he argues, what gets forgotten is that when “worst-case” scenarios play out, they’re typically unprecedented events at the time and not generally things that were modeled. As Housel states:

Business relevance

Understand that history can be informative, but don’t assume the way things have happened before will be how they occur again. Acknowledging this in business and embracing this unpredictability will lead you to build an adaptable and flexible business.

Key points

• History is great for calibration, but it shouldn’t be viewed as the roadmap to your future.

• The world has surprised in the past and will continue to do so in the future.

• Like investing, building a business is not a hard science.

• Plan for the unexpected and leave room for error.

Lesson #5: Plan on your plan not going to plan

This one follows nicely from Lesson #4. Always plan on change and leave room for error. Be aware that unknowns and randomness will be a part of life, no matter how solid a plan you build. Need I remind you of our most recent run-in with an unprecedented global pandemic?

How do you succeed in an uncertain world? From Housel’s point of view:

Business relevance

Build resilience into your business so that you don’t just survive but thrive when a curve ball comes your way. There are many ways to develop a margin of safety (e.g., multiple revenue streams), so pick what works for your business and integrate it into your plans.

Key points

• Allow room for the unexpected. You’ll be more resilient as a result.

• Pursue plans with a range of acceptable outcomes.

• Allowing a margin for safety isn’t just a conservative hedge or being risk-averse. It’s a smart strategy for endurance when applied appropriately.

• Avoid single points of failure. They make you vulnerable when things inevitably break.

Take these lessons and design your business for the long-term

The Psychology of Money isn’t just about money and investing. The book guides readers through principles and a mindset that leads to a more sustainable life, which is just as relevant to building a business. If you’re an aspiring or current business owner, I encourage you to reflect on the five lessons I shared and explore their relevance to you.

• Which do you already follow?

• Which could improve your mindset as a business leader?

• With which do you not agree?

If you’ve read the book and took away important lessons I didn’t mention. Reach out and share them!

WEEKLY DOSE OF EMPOWERMENT

The weekly dose of Empowerment is meant to provide one weekly tip that’s both practical and approachable, to help drive incremental improvement to your day-to-day. We’re always open to your contributions as well. If you would like to submit a tip to be shared with the Empower community in a future newsletter, please reach out at [email protected] with the subject line “Weekly Dose of Empowerment Submission.”

Tidy up that workspace

Have you ever shown up to a cluttered workspace and it gets your day off to the wrong start? It’s happened to me 🙈.

Whether you go into an office or use a workspace at home, a clean and organized area can improve your mindset and productivity. This doesn’t have to be an industrial deep clean every day. Let’s keep things simple.

Three daily rituals to de-clutter your space

These three things will take less than five minutes at the end of each day but will ensure when you arrive at your workstation the next day, it won’t be a messy area that strains your focus.

• Clear unnecessary items: Post-it notes, notebooks, pens, folders, you name it. Throughout the day, we tend to accumulate stuff around us. Either place items back in their rightful storage place or get rid of what you no longer need.

• Throw away trash: Dispose of trash and recycling. Included here should be the removal of dishes, cups, water bottles or other items that may have accumulated from eating meals at your desk.  

• Quick wipe down: Have a container of wipes near your desk and do a quick swipe before leaving. In addition to reducing germs, this last step is a good test of whether your space is clear enough for the next day. If you can’t easily wipe it down, there’s probably still too much stuff hanging around.

With your work area set, you can now go forth and conquer your day!

JESSICA’S READ, OR LISTEN, PICK OF THE WEEK

A little something that got my gears turning this week and might pique your interest as well!

From The New York Times: Can A.I. Answer the Needs of Smaller Businesses? Some Push to Find Out. 

TL;DR

Since we just finished two newsletter editions focused on AI and how to evaluate its capabilities for your business, I thought this article was worth highlighting.

Key points:

• Businesses should become familiar with and identify applications for the technology.

• Adoption and productivity of new technology take years, not quarters. However, this could be much faster for generative AI because of the speed of information flow now vs. other historical examples of innovation.

• Many small business owners are still unclear about the potential use of AI for them.

• Many smaller companies are just beginning to explore the technology if they’re using it at all.

• There are still hurdles to implementing AI broadly.

• Marketing is one of the most common uses for AI across businesses so far.

The article closes with a salient point from Bob Higgins, chair of The Nashville Area Chamber of Commerce:

JUST FOR FUN

Really, this section is just for fun. Who knows what will be in store each week?

Edition 013’s read of the week came from Every. When I read the publication, I always enjoy it when they share a visual post from their Creative Lead, Lucas Crespo, who tries to push the boundaries of our thinking about “out there” product ideas. I went through his feed and found the one below.

What an interesting (or scary or exciting or happy) world it could be if we could re-experience our dreams on repeat. Enjoy pondering that one!

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