The Number One Sign That You’re an Entrepreneur (And Why Most People Aren’t)

Hello, and welcome to The Mindful Entrepreneur, a newsletter where I share insights and tips on how to balance your personal and professional goals, while staying true to yourself and your values.

I’m Khulekani, founder of Citi Ad Agency, a digital marketing agency,  I know I’ve been silent on LinkedIn for a while. I’ve been on a journey of self-discovery and growth. I’ve faced many challenges and failures in my entrepreneurial journey. I’ve also experienced some breakthroughs and victories. In this edition, I want to talk about a topic that is very close to my heart: entrepreneurship.

Have you ever wondered why some people succeed in business while others fail? Is it because they have more money, more resources, or more opportunities? Or is it because they have a certain mindset that sets them apart from the rest?

According to the statistics, only 1 out of 10 businesses succeed in the long run . But why is that? Is it because most people don’t know what to do with their money when they get it? Or is it because they don’t have the right mindset to succeed?

The truth is that the number one sign that you’re an entrepreneur is resilience. It’s the ability to keep going even when things get tough. It’s the willingness to work hard and never give up on your dreams.

I know this from personal experience. I’ve faced many challenges and obstacles in my entrepreneurial journey. I’ve had moments of doubt, fear, frustration, and exhaustion. I’ve had people who didn’t believe in me, who tried to discourage me, who wanted me to take the safe and conventional path.

But I never gave up. I never stopped working on my vision. I never stopped learning and improving myself. I never stopped dreaming and taking action.

I worked hard, stayed dedicated, was innovative, and got lucky.

And that’s how I became a successful entrepreneur.

But resilience alone is not enough. You also need to understand how money works. You need to understand how the rich get richer and the poor get poorer. You need to understand the difference between assets and liabilities, between income and expenses.

You see, most people don’t know how to manage their money. They spend more than they earn, they borrow more than they save, they invest in things that lose value over time.

They spend money on things like groceries, rent, car payments, interest, loan repayments. Things that are liabilities, not assets. Things that reduce their income and wealth every month.

Let me give you an example of a typical middle-class citizen in South Africa who earns R300 000 a year (R25 000 a month). He has a nice car (a BMW 3 Series), a house (a 3-bedroom flat in Durban), a wife, and two kids who go to private schools.

He thinks he’s doing well, but he doesn’t realize how much money he’s losing every month.

Let’s break down his expenses:

• His car costs him R8 000 a month for the loan repayment (assuming he borrowed R400 000 at 10% interest for 5 years), plus R2 000 for petrol, insurance, maintenance, etc.
• His house costs him R10 000 a month for the mortgage repayment (assuming he borrowed R1 million at 10% interest for 20 years), plus R2 000 for rates, taxes, utilities, etc.
• His wife and kids cost him R15 000 a month for school fees (assuming R5 000 per child per month), groceries, clothing, entertainment, etc.

That adds up to R37 000 a month in expenses. That’s more than his income of R25 000 a month. That means he has to borrow more money every month to cover the shortfall. That means he has to pay more interest every month on his debt. That means he has less money left over every month to save or invest.

That means he’s getting poorer every month.

But what if he had bought assets instead of liabilities? What if he had invested his money in things that make him money every month? Things that increase his income and wealth over time?

Things like businesses, real estate, luxury cars, watches, jewelry. Things that are assets, not liabilities.

Let me give you another example of a successful entrepreneur in South Africa who earns R300 000 a year (R25 000 a month). He has a nice car (a Lamborghini Aventador SVJ), a house (a 5-bedroom mansion in Cape Town), a wife and two kids who go to private schools.

He thinks he’s doing well, and he’s right. He knows how to manage his money. He knows how to buy assets instead of liabilities. He knows how to make his money work for him.

Let’s break down his income:

• His car makes him money every month because it’s a rare and valuable collector’s item that appreciates in value over time. He bought it for R10,408,000, and now it’s worth R15,000,000 (assuming a 10% annual appreciation rate). He can sell it anytime he wants and make a huge profit. Or he can keep it and enjoy it as a status symbol and a source of pleasure. This means he makes about R416,667 a month from his car (by dividing the difference between the current value and the purchase price by the number of months he owns it).
• His house makes him money every month because it’s a prime property that generates rental income from tenants. He bought it for R10 million, and now it’s worth R20 million. He can sell it anytime he wants and make a huge profit. Or he can keep it and enjoy it as a comfortable and luxurious home. This means he makes about R83,333 a month from his house (by multiplying the purchase price by 10%, which is the annual rental yield, and then dividing by 12 months).
• His business makes him money every month because it provides digital marketing services to clients all over the world. He owns 100% of the shares of his company, which makes R1 million a month in revenue, and R500,000 in profit (after deducting the costs of expenses). He can sell his company anytime he wants and make a huge profit. Or he can keep it and enjoy it as a source of income and satisfaction. This means he makes R500,000 a month from his business (which is the profit).

The total income is R416,667 + R83,333 + R500,000 = R1.5 million. That’s more than enough to cover his expenses of R100 000 a month (assuming he spends R50 000 on his car, R20 000 on his house, and R30 000 on his wife and kids). That means he has R1.4 million left over every month to save or invest.

That means he’s getting richer every month.

Do you see the difference? Do you see why the rich get richer and the poor get poorer? Do you see why buying assets instead of liabilities is the key to financial success?

But how does he afford these luxury items? How does he pay for them if he earns the same amount of money as the other person who’s in deep debt?

The answer is simple: he doesn’t pay for them with his income. He pays for them with his assets.

He uses the money he makes from his assets to buy more assets. He uses the income from his car, house, and business to pay for his expenses, taxes, interest, etc.

He doesn’t use his own money to buy things. He uses other people’s money.

He borrows money from banks, investors, partners, etc. at low interest rates, and then uses that money to buy assets that generate higher returns.

He leverages his assets to create more wealth.

He doesn’t work for money. He makes money work for him.

That’s how he affords these luxury items. That’s how he pays for them without going into debt.

That’s how he becomes a successful entrepreneur.

But there’s one more thing you need. You need a vision.

A vision of what you want to achieve, of what problem you want to solve, of what value you want to create.

A vision that inspires you, motivates you, guides you.

A vision that is bigger than yourself.

Because entrepreneurship is not just about making money. It’s about making a difference.

It’s about creating something new, something better, something meaningful.

It’s about changing the world for the better.

That’s the number one sign that you’re an entrepreneur.

That’s the number one sign that you’re a mindful entrepreneur.

Thank you for reading The Mindful Entrepreneur! If you enjoyed this edition, please share it with your friends and colleagues.

👋 Until next time!

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