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The SuccessLab Podcast: Where Entrepreneurs Collaborate for Success

Feb 10, 2015

Most of us are familiar with budgeting, saving for retirement and maybe evening investing, but what about actual wealth building with the goal of financial freedom? Early retirement anyone? It may be more approachable than you think. In this episode (#36) Todd Tresidder, founder of Financial Mentor shares his story (how he was able to retire at 35), life lessons he's learned along the way, and how entrepreneurs can achieve financial freedom.

Show highlights:

1. Tell us about your journey. How did you retire at 35?

I got into the hedge fund business because I got this idea that if I was going to build wealth, I had to become an expert in investing, so I figured I'd get paid to do that. My job was to develop and research most of what's out there in terms of investment strategy and prove what works and what didn't. And so I did that for twelve years. We had a very successful run, a very successful portfolio, and then sold the company. I was "retired" at age 35.

2. How can entrepreneurs find balance between enjoying life and not working their lives away, but still striving towards financial freedom?

There's not a quick or clear answer to it. As you have more money, obviously, it's easier—you can buy more help, you can make decisions more based on what's fulfilling than based on your financial needs. But that's not true in the beginning, and sometimes you just have to work hard.

3. What mistakes or pitfalls should entrepreneurs avoid when starting on the road to achieving financial freedom?

One mistake is not designing with the end goal in mind. For example, my business is designed to be completely remote. I can operate it from Reno, Nevada, which is where I am now, or I could operate it from Panama, or Paris, France.

4. Once they are achieving positive cash flow and actually saving, what types of investments do you recommend? Can the business itself make investments?

Your business IS an investment. When you build your business, you're building an asset, and therefore by definition, it's an investment. You're building equity in it. As long as you're not building a business that's just a job, which is typically a service business, where you're the only service provider. If you do that, then you're not really building equity because it dies with you. But if you have a product, or you have a service business that involves delivery by other people, then you can build equity in the business, and you have an asset.

5. What are your "seven steps to financial freedom"?

I've been coaching people one-on-one for about 17 years now, and I noticed that there was a distinct pattern. Within that pattern, people would come to me at different points in the journey, but the pattern was always the same:

  • Step 1: Basic financial planning
  • Step 2: "Habitudes" of the wealthy
  • Step 3: The wealth plan
  • Step 4: Commitment
  • Step 5: Structuring your life and environment to reach your goal
  • Step 6: Investing
  • Step 7: Answering the question, "You're a millionaire, now what?"

6. Todd makes an excellent point about determining when enough is enough...when your time and life energy is more valuable than growing your financial empire:

It's different for everyone. There are some bloggers who've popularized themselves—one lives on $25,000 a year for a family of three, one lives on $17,000 a year with his wife, and they declare that financial freedom, and that's cool. No judgment at all. That's living with extreme frugality and declaring that freedom. My personal experience and my personal twist on it is that you can spend as much time trying to figure out how to save money as you could just making it, and then you don't have to pay as much attention to what's spent. It's just an expression of your values and what works for you.

7. How do mental blocks keep us from achieving wealth?

A great book on the subject is War of Art by Steven Pressfield. He talks about Resistance, which is Resistance with a capital 'R' because he's essentially deifying it. It came from the world of art, or in his case, writing. Any time you try to improve yourself, or create, or move your life forward, you're going to encounter resistance. It's this diabolical part of our human existence. It exists in all of us. Me included, and you included. Every time we move our lives forward, we experience resistance, and we have to overcome it, and he's got a whole process of explaining how you do that. (Check out Financial Mentor's episode with Dane Maxwell to hear a great exercise on breaking through limiting beliefs.)

8. What business or financial books do you recommend?

Michael Gerber's The E-Myth is a classic. A new classic out there is Essentialism by Greg McKeown. It's got a timeless message to it, and that message is only becoming more relevant. We're basically in an information overload world now, and there's more opportunity than any of us can handle. So it's not a question of adding more/better/different; it's a question of selecting only that which is essential and critical, and that's the only way you can find fulfillment in life. There's many more: Rework by Jason Fried, Lean Startup… I think that's a good list!  

This Week's Biz Hack

Music adds great ambiance to nearly everything. Whether for a YouTube video, presentation, podcast, commercial, or party, great music or even ambient sounds help enrich the experience. Finding the right music is the challenge, though. Two tools I’ve been using for finding music are Jamendo and Music Alley from Mevio. Both have massive libraries of free music under the Creative Commons license.

Quote of the Week

“You can either fit in or stand out. Not both.” ~ Seth Godin   Special thank you to Todd Tresidder for sharing his insights and personal story. Next week I’m in The Lab with John Biggs, East Coast editor of TechCrunch. Be sure to tune in! Until then, have prosperous week! The music you heard in this podcast was “Happiness” by Music for Your Media and “I Want To Be Rich” by Kitchen Cowboys.