The New Personal Business Model

I’m pretty sure we need to change our personal business model. Fully loaded with debt by mortgaging all foreseeable future salary is no way to live. We need to rethink.

Just as businesses are being disrupted by smarter, faster and more innovative entrepreneurs our traditional ways of earning and spending will have to change. Thinking like an entrepreneur means low burn rate and long run way. 

I’m running into more and more people how have sold / are selling their big houses and moving into smaller *rentals* to decrease their burnrate. They are also following Mark Cuban’s excellent investment advice. Debt is slavery so getting out of debt means freedom. It’s an old and mostly forgotten adage but it works.

I see a mega shift from the consumption of goods and services (housing, fashion, utility, cable, physical stuff et cetera) to learnings and experiences. The great thing is that most of the latter are free via the web (podcasts, videos, music, reading, open university et cetera).

Here are a few things that I’ve learned about personal finances since I became an entrepreneur:

• Own fewer things and rent a small place as it’s cheaper and almost maintenance free. Home ownership is over-rated; public spaces are under-rated.
• Cook at home with real food. It’s healthier, more fun and cheaper. Don’t go to restaurants to get fed, go to get your culinary mind blown away and learn new things.
• Only buy new clothes when you need to replace old clothes. You are what you think, not what you wear.
• Give away / sell your books, DVD and CD collections and start downloading digital versions. Digital storage is dirt cheap compared to physical storage. Rent when available.
• Walk to any place within a 2-mile radius. It will save you gas and stop you from impulse buying as you only can carry so much. A great bi-effect is that you’ll get in shape really quickly and don’t have to waste money on gyms, fraternizing with the corporate drones at peak hours.
• Buy everything online and get shipped to your door. Saves time, money, attention and energy. An exception might be Farmer’s Markets which can be a fantastic experience.
• Only travel offseason for smaller crowds and cheaper accommodations. Pretty much 50% off on flights and accommodations. Eat where the local eats.
• Allocate your time, energy and attention towards family, friends and staying contractable. The latter means personal and professional development, working smarter and delivering more real value.
• Work smarter by being effective and strategic instead of only present and tactical. Focus your energy and attention on what really matters. Leverage digital productivity tools to liberate yourself from physical locations. Bytes are cheaper to transport than atoms.

The above learnings aren’t revolutionary but hard to follow. We think that consumption can buy us happiness, treat us for boredom and stress, make us more attractive and show off our professional success. In reality, the only thing it does is turning us into slaves, having to work even more for money to uphold the image of being the perfect success story. Honestly, does anyone care but you?