How To Be A Real Entrepreneur So You Can Be Free

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How to find your baseline. Today's topic, Effortless English Business Club. A business club, an EE business club show today. We are live on Facebook this time.

Broadcasting live on Facebook. So welcome to our live viewers on Facebook. Facebook viewers, please be patient. I will look at your comments and your questions later in the show.

Later in the show, comments and questions from live Facebook viewers. For now, just be patient and listen. How to be a real entrepreneur or a real freelancer. Really be free, so you can be free, so you can enjoy your life more.

There are a lot of people who dream about doing this. There are a lot of people who say they want to do this. There are many, many, many, many, many people who...

Talk about doing this. So what's the difference between the talkers and the dreamers and the people who really do it? Continuing from last week's EE Business Club show, talking more about the baseline, your baseline. What is that?

Well, basically, you know, businesses have what is called overhead. This is a business English word. Overhead. What is overhead? Do you know? When we talk about a business has high overhead or a business has low overhead.

What does that mean? Well, overhead means fixed expenses. Fixed expenses. Fixed means you have to pay them every month. They're like regular expenses.

Things that the business must pay every month or every week. but they're regular expenses. So for example, if a business has an office or a shop, a store, they probably pay rent.

Rent is part of their overhead. That is a fixed expense, right? It's a regular expense. They must pay the rent every single month. It doesn't vary. It's every single month.

If you have a web business, well, then you might have to pay for hosting your website. So that, again, is a fixed expense. It's overhead. Employees. Employees.

The amount you pay to your employees, that is overhead, right? If your business requires employees, if you need the employees to run the business, that's overhead. It's like a necessary expense. Now, that might...

be a little different month to month, but it's usually around the same amount every single month. So overhead. This idea of overhead is very, very important for businesses because if you have high overhead, it means you have high regular expenses, you have less flexibility as a business and you have more financial pressure, more money pressure, right?

Because to survive as a business, you must make at least enough money to pay those expenses, to pay that overhead. If your overhead is $1 per month, well, that's low pressure. You just have to make $1 per month and your business can survive.

If your overhead is $1 million per month, that's a lot more pressure because now you have to make earn, get $1 million every month just to survive, just to survive. That's before profit.

So you can see the higher your overhead, the more pressure. Now, it doesn't mean it's bad. Some businesses naturally have more overhead. A restaurant usually will have more overhead than a website business, an e-commerce site, a basic, simple e-commerce site.

Usually, right? Of course, it depends. Amazon probably has, Amazon.com probably has very high overhead because they're so big, but a small, simple website, the costs, the fixed costs, right? The overhead, the basic expenses of that business are low.

Therefore, lower pressure, easier to survive month to month. Now, In your life, you have overhead. You can look at this idea in your own life. And generally for businesses, generally, a very simple way to make more money in a business or to make your business survive or more survivable, stronger, or to make more of a profit, a very simple way to do that is to cut your overhead.

Cut your fixed expenses. Big, big companies do this all the time. When a big, big company starts to have problems, when they're having financial problems, the first thing they usually do, what? They cut expenses.

It's the first thing they do, usually. Why? Because it's the simplest way to become financially stronger. They cut, usually they cut workers. Sometimes they sell part of their company.

They cut expenses. as many expenses, fixed expenses, overhead as possible. And that very quickly can make their business more survivable, more profitable.

This is also true for small businesses. A small business is struggling. Many times they can survive if they just cut their overhead, cut those fixed expenses. Well, guess what?

In your own personal life, this is also true. It's usually easier to cut expenses than to suddenly make a lot of money. This month, you could cut your expenses a lot. In the next 90 days in your life, you could cut your expenses a lot, simply, very quickly.

In the next 90 days, to make a lot more money is more difficult for most people. So this is why cutting expenses, getting down to your baseline, that basic level where you can still be happy financially, but the simplest life possible is so powerful.

See, the things you buy, you think you own them. You do own them in a way. But in some ways, the things you buy can own you. There's a nice... quote from the movie Fight Club that says that.

The things you own end up owning you. It actually comes originally from Henry David Thoreau. What does that mean? The things you own can own you. It means when you buy things, especially when you buy things that you must pay for monthly, like a house or rent, a car,

that now in some ways that thing owns you because now you're a slave. You have to work to pay for that thing every month. If you buy an expensive house, usually with a loan, you have to pay that loan every month. Do you own the house or does the house own you?

Because now every month you have to work to pay that loan. So you're working, working, working to keep the house. In some ways, you're a slave to the house. In some ways, you are owned by the house psychologically.

The same can be true for a car. The same can be true for lots of things you buy with a credit card. Another way that things can own you is simply by fear.

Maybe you buy something and no loan, you don't pay it every month, but you start to collect all these things. And then you start to be afraid of losing them.

There's a little bit of fear in the back of your head of losing the things you have or losing the life you have or losing the nice apartment you have.

And this also, this fear starts to make you a little bit of a slave. And it will prevent you from being free. It will prevent you from doing what you really need to do to be totally free.

such as start your own business, such as get the better job that you'll love, even if it pays less, whatever it is. So the very first step is to cut, to cut, cut, cut your overhead, your fixed expenses. That's where you should start. And keep cutting, keep cutting till you get down to your baseline, till you get as low as possible, where you're still comfortable, you're not unhappy.

Which expenses should you cut first? This is a question I get a lot. Where do you start? So let me go through the most common ones, the biggest ones. The first place is housing.

This is the biggest one for most people, where you live. For most people, they pay the most money each month for their apartment or their house. That's the biggest expense, the biggest fixed expense for most people.

Therefore, that is the first place to cut. The first and the easiest place to cut, it's the thing that will give you the biggest benefit. Cut your housing expenses.

Now, this is also the one that most people don't want to do. This is the one that people kind of, I don't know, because people like their luxury and people like where they're living.

And the idea of living in a smaller, cheaper place automatically makes people nervous. But this is important. If you want to be free, this is an important step. And this is the number one place to cut first.

You'll get the biggest cut, usually by cutting your housing expenses. If you're living in a big, expensive house, paying a big loan every month, move to a place that's half the price. Sell that big house. buy something much smaller and cheaper.

If you're in an apartment and you're paying high rent every month or even not paying a high rent every month, start looking around, find an apartment that's cheaper.

Move to it. Move to a one-room apartment if you can with the lowest rent possible that's still safe. So I'm not saying don't move to a terrible neighborhood with high crime. No, no, no.

That's not the baseline. That's becoming unhappy, unsafe. I didn't do that. I don't recommend that. No. You still want a safe place. You want a place that's going to be basically clean.

Of course, right? So we're not talking about being unhappy, not unsafe. No. But still, go as low as you can, as simple as you can, as cheap as you can, and still be safe and clean.

Housing is the number one place for most people to cut. Now, in... In some places, such as America, usually number two is your car. Now, in big cities, this is not true.

And in some countries, this is not true. But in, I'd say, North America in general, like, well, at least Canada and USA, it's car. Everybody's got cars. You really need a car.

But a lot of people buy cars that are too expensive. You can just buy a cheap, cheap used car. I recommend get some old cars. used, cheap, Japanese car, some reliable car.

It doesn't matter. Just something reliable. It can be cheap and ugly. In fact, if it's ugly, even better because you'll probably get a better deal. Often people are paying car payments.

Every month they're paying for their car payment. That's crazy. Don't do that. Instead, sell that new car or trade it, whatever you need to do. You can get the cheapest car you can that still works, right?

Again, don't buy something that is going to break all the time. But you can usually, I've always bought cheap, inexpensive Japanese cars that are very reliable, that are used like 100,000 miles or more.

And so I never, I have never in my life had a car payment. I always pay cash. I just buy it. So that's the second place you can look. If you don't have a car, good for you.

If you live in a city, maybe you can just use a train or walk or bicycle. Great. Next place to look, food. Food, especially eating out at restaurants.

That can be expensive. So, you know, if you love doing that, then still do it some, of course. But reduce it. Try to reduce it. Cut it down. Eat more at home.

Eat more fresh, real food. It's more healthy. And you'll cut your expenses a lot. Clothing is another one for some people. I never had this problem, but some people do like to buy clothing again.

No need to go buy expensive clothing. Don't do it. You can buy secondhand clothing that looks good, that's perfectly fine, and that is very, very, very, very cheap.

I recommend doing that. Also, tech, gadgets, you can buy the old versions of things, buy an older used version of a laptop, of a computer, of a camera, of a phone, whatever. You don't need the newest Apple phone, right?

So these are all areas. And then finally, the area we can call them knickknacks or luxuries, things you don't really need. You can look at your expenses and look at things. Do I really need to buy that?

Sometimes we just buy things and we don't need them at all. So it's another area you can cut. Why do you want to do this? Because here's the deal. Real entrepreneurs and also freelancers.

There are real ones and then there are talkers. Okay, there are the doers, the ones that really succeed, that really do it. And then there are the ones who just talk, talk, talk and never really do it.

And the real ones, they're lean. Lean means very thin. Now, of course, we can talk about some person being lean, like they're thin and healthy. But we also talk about companies being lean.

You can be lean financially. And again, what that means is, again, it means you have low overhead. A financially lean person or company has low expenses. Their costs are very, very, very, very low.

They need very little money to survive. So to be a successful entrepreneur, especially a small entrepreneur, you want to be lean. Your expenses should be very low. When you're lean, you can be fast.

You can be fast. You can make money. quick decisions. You don't need a lot of employees. You don't need a huge amount of money coming in. So you can take chances.

You can just try lots of things. You're more fearless financially. You become financially fearless. This is the power of cutting your overhead personally and also with your business.

It makes you financially fearless. So you'll take action faster. You'll try more things. This is how you learn. This is how you succeed. See, there are a lot of posers, what I call posers.

I used to live in San Francisco. And San Francisco is part of the Silicon Valley area. Technically, it's north of Silicon Valley, but basically it's part of the Silicon Valley economy.

And on one hand, there are a lot of cool companies, startups and things happening in Silicon Valley and San Francisco. On the other hand, San Francisco is full of what I call posers. A poser is someone who pretends, pretenders.

They're pretending to be entrepreneurs, but they're fake. For every one real entrepreneur in San Francisco, there are probably 10 posers, 10 fakes who will never start their business or who will start and crash very quickly.

How can you tell? I've noticed a pattern between the real and the fakes. The fakes, usually, they want the nicest office, right? They want to immediately, right when they begin, they want to start renting a very nice, expensive office.

And they want to immediately have nice, expensive furniture in their office. High overhead, right? Immediately, they're starting with high expenses. They buy expensive clothes, fashionable clothes to look good.

They buy the most expensive computers and technology. They spend large amounts of money on their website right at the beginning. Another thing I've noticed, they have big business plans. They love to talk about their big, big business plan and they're writing their business plan and it's many, many, many, many, many, many, many pages.

That's a good sign that probably they're fake. Not always, you know, for if someone's doing a very large startup, you know, millions of dollars and they have experience, maybe they do some of the things. But for most of the small entrepreneurs, just one or two or three people, a big business plan is usually a sign that they're fake.

Another huge sign that they're fake, that they're posers, that they're pretenders, are they're waiting for investors. They're always talking about investors. They're going to have their big business plan so they can get investors. And I just need to get investors.

And when I get investors, I'm going to start. And we're looking for investments. This is usually a sign of bullshit. Okay? Of nonsense. Okay? Again, at the large level, sometimes not, but for the small level people, like you and me, and most of us, it's a sign of pretending.

The biggest sign of pretenders compared to real entrepreneurs, the biggest sign is they have lots and lots of big ideas. They're always talking about their big ideas, their amazing idea that nobody else knows about, that nobody else has, big ideas, talking, talking, talking, and no action.

They never seem to do anything. They never seem to actually do it. It's always talking and the talk is so big, big, big, big, big talk, talk, talk. Big, big talkers.

That's not what real entrepreneurs do. Let me tell you what most real entrepreneurs do. And when I say real, I mean people who actually start businesses. They really do it.

They start. They don't just talk forever. They really do it. And number two, they have a good chance of success. They survive for a while. They really compete.

They make a strong effort to survive. Now, it's never 100%. There's always a chance to fail. But the talkers never even get in the game, really. So the thing I've noticed about most of the small, again, we're talking about small, like one or two or three people starting a business like you, like me, we're freelancers.

Well, number one, they're lean, okay? They cut their overhead. They have low, low, low overhead. Exactly what I'm talking about. They keep their expenses very low in their personal life.

They cut to their baseline as low as possible. And when they start their business, they do the same with their business. They keep the expenses super low. They don't go rent an office immediately.

They work from their house. I still work from my apartment to avoid paying rent. They don't buy expensive furniture. They don't go buy new computers and new technology.

They use whatever they have already. They cut all the expenses they can from their life. They start small. They stay lean and Thin, low overhead, low cost, and then they grow.

The big one. They talk less and they do more. They take action every day. It's action, action, action, every day, action. They're doing things. They're constantly testing things and trying things and launching new things, new products, new services.

They are, what I call this, in the game. They are in the game. They're playing the game of business. It's just like a sport. There are people who talk about sports.

Like me, I talk about soccer in the world cup but i'm not in the game i'm not playing ronaldo's in the game you know he's in there he's practicing he's playing in the games constantly every day he's practicing his skills or playing all those players are all the pros those really successful players right they're in the game they're not talkers they're doers maybe they talk later but they are doers mostly well business is just a game too it's a financial game and

This is the key thing. You've got to get in the game. Stop thinking so much. Stop talking so much. You don't need a 50 page business plan. Get in the game, even in a tiny, small way.

Get in the game. And that's how you learn. Cut your overhead. Cut your expenses. Everything is cheap as possible. So you're financially fearless. So you need very little to survive financially.

That makes you fearless. Then you just make decisions. You try things. You're in the game. You're in the game every day. You try something. It doesn't work.

You're still in the game. Next month, you try something else. It works a little better. Great. Improve it. Keep going. You're in the game. You're in the game.

You're in the game. That's how you learn. That's how you grow. That's how you learn these skills to be a great freelancer. or entrepreneur you learn it by doing it you're not going to learn it at university or college definitely not you're not going to learn it just from reading books you're not going to learn it from talking about it the big office is not going to help you investment money will definitely not help you it will hurt you unless you're experienced already then maybe you're going to do great but if you're doing this for the first time forget investment money forget it it will hurt you

It will make you lazy and you're just going to lose it all. And it's going to be a big disaster. Forget that. Get lean. Cut your expenses. Get in the game.

Stay in the game. That's how you do it. That's what real entrepreneurs do. That's what real freelancers do. That's what you are going to do. All right.

It's time for questions and comments. Again, we are live on Facebook live. So let's go to our live comments and questions. People have been typing them the whole time I'm talking.

All right, so let's just go on back and see what people... Yeah, this is a nice comment from Sivan. To be an entrepreneur, you should identify your strengths, yes, and decide, do you want variety or stability? Good question. And also, yes, good thing to think about.

And get rid of the idea of being an employee in your head. Also a good idea. He's exactly right, because what he's talking about, it's a very different mindset. It's a very, very different mindset.

This is the hardest part for most people, because in school, you're trained to be an employee, to think like an employee. And of course, if you get a job at a

at a company, then you are an employee and you're being trained even more to think like an employee. But as an entrepreneur, you have to change your thinking. This is what I'm trying to teach you.

And he mentions two things that are very important. This idea of stability, which means safety, security. That is the focus of many, probably most employees, right?

There's a feeling of safety and security because you know, okay, every two weeks I get a paycheck and every paycheck is exactly the same amount. So it's predictable. You know what's happening, right? You feel stability.

You know. So that is a kind of, you want that safety, that stability, the predictability as an employee. Most employees want that. Expect that. That's fine.

If you're an employee, that's totally fine. Nothing wrong with that. But as an entrepreneur or a freelancer, forget that. You are not going to have that.

This is what scares a lot of people, because you don't know. Every two weeks, your income can be different every month. One month, you might make a huge amount of money, and the next month, it might drop, and you might make much less, and then the next one, somewhere in the middle. And it can go up and down.

Now, usually... After some time, your business becomes more stable and more predictable, so you have a better idea of your income. But especially in the beginning, when you first start, it can change quite a lot, a lot of variety.

which can be a little scary for people who are used to a paycheck. Again, this is why I tell you, you must cut your overhead, cut your expenses as low as possible down to that baseline. This is another reason it's so important because it will give you a little more of a feeling of security when you start that business or freelancing.

Because if your expenses are high and then suddenly one month, your income drops from your business because whatever, who knows what, many different reasons this can happen, then you're going to be super stressed. Oh my God, my income's less than my expenses now. That's when you start really getting scared.

But if your expenses are super, super, super, super low, then you have a better chance of, even when your expense, I mean, your income goes up and down,

there's a better chance you can keep it above your expenses. It's easier to keep it above your expenses. This gives you a feeling of safety. It gives you time to survive.

In the beginning, mostly what you need as an entrepreneur is time to survive. It's about survival. It's not about getting rich in the beginning. It's about just surviving.

Different statistics, but basically most businesses fail in the first year. So surviving that first year or the first two years It's very important. And to survive, if your expenses are super, super, super low, personally and with your business, you have a much better chance to survive.

Why is the survival so difficult for new businesses? Well, it's because that's the time when you're learning, right? You jump in, you think you've tried to learn, but you really don't know until you're in the game. As I said, reading about it is much different than doing it.

When you start doing it, when you're in that game, that's when you really start to learn. And so those first 12 months, you're making a lot of mistakes, possibly very big mistakes, or you're trying a lot of things that are not working.

And therefore, you need time to learn. You're learning quickly, hopefully, but still, you may be you know, barely surviving for a while. And if your expenses are high and you have expensive office rent and you're paying for expensive equipment, then you have a very hard, I'd say a very low chance to survive the first year.

If your expenses are super, super low, you have very low overhead in your life, you have a much better chance to learn and survive the learning. And then after that, you can start growing and really going forward. And then you can think about being rich.

But survive first. Okay. Oh, here's another. Yeah, there's another thing to cut. Good. Suleiman says, how about entertainment costs? How about cutting those?

Yes, for sure. Cut that too. It's another one. Some people spend a good amount of money on entertainment costs. With the cheap phone plan, you can watch YouTube videos for entertainment.

You can read books. You can go to the library. Cut, cut, cut, cut, cut those expenses. Look, when you become rich, you can raise your expenses again. This is not forever.

Your baseline can go up as your income goes up. But you want to cut it as low as possible in the beginning. Well, this may be true. Vladislav says, on the other hand, very cheap cars are of low quality.

Not in America. I don't know about Russia or Ukraine or where you are. But in the United States, you can find quite cheap cars that are still very reliable. You know, 100,000, 120,000 miles.

Like I said, that's why I buy used Japanese cars usually because I find they're very reliable. You have to do your homework. You know, you have to... try to choose cars that are reliable and you gotta be careful.

I mean, of course, so you gotta, if you go too cheap, yes, it might, you might get a piece of junk, but, uh, you can still go quite cheap. Like I said, I've always paid cash even, and this is not when I was, had money. I mean, back when I was super poor, I would still, you know, buy very cheap cars. They broke sometimes, but still mostly reliable.

No, this is a good comment. I want to talk about this one. The more expensive our car is, the more respect we get from other people. So what? Who cares?

It's not respect. It's not real respect. You know what will give you respect? Be rich. Be successful. Be happy. Be free. Live the life you want. And then you don't care if they respect you or not.

Who cares what a bunch of strangers think? I mean, for a car, it doesn't matter. It doesn't matter. It's more important to be free and happy, I think.

I mean, just buying a car, I don't respect anybody just because they have an expensive car. It doesn't mean anything to me. You look cool today, so you can't deny it.

Interesting. Okay, Andre says, I love the idea, don't be a slave for the house. Yes. You know, Thoreau, again, my favorite American writer, he talks about how he felt.

He's writing back 150 years ago, Thoreau. And he talked about, at that time, seeing these huge houses and then just a few people living in some giant house.

And he said, they look like little rats. living in a large house. He thought it was ridiculous. And he was talking about how, even then, how people would get a loan and pay a loan for 30 years, 30 years, 3-0, just to own their house, a place to sleep and get away from the weather and how crazy that was and how so many of them became slaves and they would work 40 or more hours per week

just to pay for this expensive house. And how, in his opinion, and I agree, that in many ways, the house owned them. So, look, if you have the money, if you can just pay for the house with cash because you're rich, great. But if not, it's insane to do that.

It's crazy. It's super high overhead. It's the same as a business. If you're starting a new business, it is absolutely crazy to pay rent for an expensive office.

And for a lot of businesses, if you can do it at home, do it at home. No office, no extra rent. And in fact, change your home to a much cheaper one. When I started Effortless English, it was one bedroom, not a one bedroom, a one room apartment, a studio, one room, no bathroom.

We had no bathroom in our apartment. We had to walk down the hall. It was a shared bathroom. That's about the cheapest apartment we could find in San Francisco.

San Francisco is a very expensive city, and yet we found very cheap rent right downtown. It was a tiny place. It was cheap. But because of that, I could start Effortless English with very, very, very low expenses.

And because of that, I did not need a huge income to pay for my expenses. And because of that, quite quickly, I was financially free. I could quit my job after only six months. I started the business six months later.

I quit my job and never worked again for someone else. Part of it is because the business did grow quickly. But the other reason is, is that my expenses were super low.

So I was fearless about quitting my job because I thought, well, my expenses are so low. I'm not afraid. If instead, if I had had a very expensive apartment or a more expensive apartment and much higher expenses, probably I would have been afraid to quit my job so early.

And I would, therefore, I would have grown the business more slowly. So very important. Very, very important. Okay, so, let's see, Svyaroslav. Depends on your income whether you need to cut your expenses or not.

Well, that's exactly right. This all is connected to your income. Right? So, my expenses are higher now because I have much, much higher income than I did.

But, again, I'm mostly talking about you starting your own business or becoming a freelancer. Right? Right? Possibly quitting a job you don't like, or maybe even quitting a job that pays more to go to another job that pays less, but you think you will like it better.

You'll love it. In those kinds of situations, you must cut as low as possible. Also, I believe that in your life, you should at least one time cut to the bottom.

You need to find it so you won't be so afraid. It's more about psychological. Getting rid of the fear. Go as low as you can. Find out how cheaply can I live and still be happy, still be comfortable.

What's my lowest possible point for overhead, for expenses? Find it for yourself. Know yourself. Then you know. Then you know I can survive at that level.

I don't need to be afraid. For me, it was very low. For me, it was living in a car. For you, it might be something else, but you should find it. Okay, let's see if we got any more comments or questions.

Okay. Okay, let me read this one. Mustafa says, Can we do a startup with just things that we are passionate about and love? Because there are so many other things that might be successful, but at the same time, we don't have passion about it.

Yes. Yes. In fact, I recommend it. I recommend to do a business about something you're passionate about, that you love, that you will enjoy doing. Otherwise, why do it?

That's my opinion. Now, some people will tell you, look for the opportunity, look for the money. Maybe those are people with more of an investor mindset, I think.

But in my opinion, it's like you're going to be working many, many, many, many, many, many, many hours on a business that you start. or as a freelancer too. Okay, it's a lot of hours. You're going to be using a lot of energy, pouring, putting your enthusiasm, your energy, your passion, and many, many hours of your life into this business.

If you don't like it, if you don't really care about it, you're not going to be very happy, even if you make a lot of money. So I think absolutely you should do something that is enjoyable to you. It doesn't have to be your number one thing in life.

But you should at least enjoy it. I mean, for me, that's one of the main reasons to do it. I mean, if not, just work a job. I mean, why leave a job and then start a business that you're not really excited about and you're not really going to enjoy?

That seems to me like it's not much better than just working the job that is kind of boring. See, I think so. I think so. The other thing about this is that it's Keith Cunningham, actually.

Keith Cunningham's a great guy. He actually taught Robert Kiyosaki. He influenced Robert Kiyosaki, the author of Rich Dad, Poor Dad, our book club this month, or this time.

Keith Cunningham is a business teacher, and he makes a very good point It's not really about finding the one area, the one perfect area, right, to make money.

He makes the point that in almost any area of business, you can look at any area of business, and someone is rich because of that. Someone is rich making these little plastic covers for cameras.

Somebody started a company and they make stuff like this and they're rich because of that. Many people are rich teaching exercise and fitness. People are rich doing almost anything.

People create companies for thousands and thousands and thousands of different things. It's not so much about finding that one perfect thing. It's about doing whatever you do very, very well, about finding

serving your customers really well. And you do that better, I think, when you are passionate and excited about what you're doing. So that's why I think it's important.

Instead of trying to find the perfect market, a lot of people try to find whatever is hot right now. The problem is if you choose something that's hot right now, that's exciting now, the problem is that Everybody else knows that also. So lots and lots of people are going to start doing it.

When I started teaching English as a business online, I mean, nobody thought you could do that. Nobody thought, oh, you can become rich by being an English teacher.

Right? Quite the opposite. Most people thought, you know, English teachers are poor. So I didn't start it because I thought, ah, This is the perfect market to be rich.

No, I started because I was doing it at that time. It was my career. I was excited about it. I had some interesting and creative ideas about how to do it.

And I wanted to do it. So I started my business doing that. And then it ended up doing well. And now you'll see on YouTube and online, there are a lot more people doing it.

But when I started, very, very, very, very few. In fact, I hardly know of anybody. Almost nobody was doing it at that time. That was like 12 years ago.

So, yeah, just look to your own life. As I said before, one good area of your look to what you're passionate about and also look for problems. Like I said, look for problems that you want to solve. Like what problem do I solve?

I solve your problem of speaking English. I like communicating. I like my own language of English. I like teaching English and coaching people about English.

I like motivating people. And I found that I could help English learners solve their problem, their problem of fluency, their problem of feeling nervous and embarrassed, right? Solving a problem. You can do that too.

Look for problems to solve. People will pay you to solve some problem in their life. Hmm. Oh, this is a little more difficult question. From Gerson. How to change the mindset of my family, wife, and children.

Well, I was lucky in this area. My wife is even better about cutting expenses than I am. Look, she's laughing. I'm saying it in a nice way. Right? Yeah.

She doesn't want me to say she's cheap, right? But she's... She likes to live simply. She very much likes to live simply. She was fine when we first got married.

We lived in that tiny one-room apartment with a shared bath. She never complained about it. In that sense, I was lucky. I'll tell you my honest answer.

My honest answer is just do it. Be the leader. Explain to them the reason for it, that look, we need to sacrifice now. It's going to be tough now, but this will give us all a better life in the future.

And this is what I want and need to do. So sell them on the benefits of the future, but also be honest with them about that we need to be tougher. It's going to be a little tougher in the beginning.

It's also a really great way to train your kids not to be spoiled. Right? So, you may have to do it in steps. You may have to gradually do this with your family.

Step by step by step. But, you know, you just have to take the lead and be strong about it. And, you know, just keep repeating again and again why you're doing it. The reasons you're doing it and why it's important.

And, hey, your kids, you just... In the end, you're the boss, okay? With your wife, you have to discuss it and negotiate more. But with your kids, ultimately, you're the boss.

Be the boss. That's my best answer. They may not like it for a while, but they'll get over it. They'll survive. Yeah, so Carol's mentioning the same exact issue, Carol from France, about children.

Children today have to face a lot of pressure coming from their, quote, friends about buying stuff. Yes, indeed. Another reason I don't like schools, because schools create and make this sort of pressure even stronger, you know, of this materialistic culture.

The good news about this, however, when you train your kids to do this, to also live simply. And also, by the way, you can train your kids to be entrepreneurs. I highly recommend doing this. When your kids ask you to buy something, when your kids ask you for money, don't just give it to them.

Don't just, oh, here's money and they automatically get it. You're training them to be beggars or if you give them like a regular allowance. My parents did this a little, although it was very small. But if you're giving them like a regular amount of money every month or week, you're training them to be employees.

You're training them to be kind of wage slaves. So instead of that, next time they come to you, I want a new bike. I want a new phone. I want the new PlayStation.

You can say, okay, well, let's look how much does it cost and do some investigation. And then you say, well, how could you make that money? You can have it, but you've got to make that money. How can you earn that money?

You can help give ideas if you want, but get them to start thinking about it. As we go through the Robert Kiyosaki book, as you learn these things, teach these ideas to your children.

In the very beginning, they may not like it because they're lazy and they're soft. But later they will like it. When your kids figure out that if they

start to create assets, you know, they create little businesses or little things, when they learn how to start finding and creating opportunities, they will suddenly realize, at some point they'll realize, I can make a lot more money if I do this than if I just beg mom and dad all the time.

And then when they earn that money themselves from creating it, let them buy what they want. If they want to buy the newest PlayStation or Xbox, You know, or if you're okay with video games, if you think that's fine, yeah, let them do it. Let them buy their brand new bicycle, the best one.

but make them earn it. Get them thinking like business people more, looking for those opportunities. In the beginning, they'll probably think of things that are more like jobs. Like I did this when I was young, going around and mowing, cutting the grass or cleaning people's houses or maybe painting people's houses or fixing things or that kind of stuff.

Eventually, they might start thinking more of creating actual real little small businesses. Keep pushing them this way And trying to show them. And then you can teach them these exact same things.

You know, hey, well, you know, this is what I'm doing, too, as your mom or your dad, cutting expenses so that we can do this. You know, you could start your own little business and I can, too.

And again, like it can be simple stuff, like they go to go and they find stuff and they sell it on eBay. It's another way, right? They start thinking more like entrepreneurs, looking for those opportunities. This will be so, so great for your kids as they grow up.

It will make them less spoiled. They start to learn that they must create those opportunities and work for them. They don't just receive for doing nothing, which is a terrible thing for them to learn.

Good luck. Ah, okay. Okay. Related to this, Emmanuel, you always have the great questions in the comments. Okay, my dear, I hope you can answer that question.

My cousin is 14 years old and he's a well-read person. He likes to read topics of business and online marketing. Man, he sounds great. Do you recommend him starting early?

Yes. Unleash his power. Or is there a risk to fail? There's always a risk to fail. Because a friend of mine, he does online marketing and sometimes he loses money.

Aha, I see. Yes, there's a risk to fail. So you have to help him. So you have to be careful, right? You have to be careful. How do you lose money online?

Well, it's through these expenses. This is again, this is why I'm saying cut, cut, cut the overhead. Keep those fixed expenses super, super, super low because then the risk is very low.

If your expenses are $10 per month, then at worst, the worst, you lose $10 per month. If you make no money and then you have to pay out, you have to pay $10 a month to survive, you lost $10 that month. That's no big deal, right? That's a small loss.

Most of us can survive that. At least for a short time, you can survive that for a few months and keep going. If you start spending, you know, $5,000 per month, now it's very dangerous.

Now this is a dangerous situation because if you don't make $5,000, you're going to lose money. You could potentially, you could possibly lose $5,000 in that month.

It's very hard to survive a long time if you're losing that much money, right? So this is another reason. So in a situation like this, 14-year-old, Cousin, fantastic.

He's interested in being an entrepreneur. Yeah, get him started doing something. But tiny, small, cheap things. Don't start him with some expensive business that costs a lot.

Get him doing little things. Remember my example when I was a kid in high school? I was selling gum. I went to the grocery store. I bought $10 or $20 of gum and candy bars.

And then I sold it at school. and probably for two or three times the price. I can't remember exactly. So maybe I would spend $20 and then I would sell it and make 60.

So my profit was like $40 for one week, maybe. I can't remember the numbers. I'm just an example. But you see, my risk was super low. My risk was only $10 or $20, right?

I had to buy the candy bars and the gum It cost me $10, $20. It was a low risk. If I sold nothing, I only lost that amount. So no problem. So this is what your cousin needs to do.

Online marketing, the risk is usually advertising. Well, there's two risks, actually, because some people will spend a lot of money to design a website, to create a website. That's a big mistake. Don't do that.

He can start a website for basically free. Certainly for very, very, very cheap. Don't worry about designing it like some super nice looking great. My first website was so ugly and it was super cheap.

I did it myself. You can get some templates that are free or very cheap. WordPress, don't spend a lot of money on a web designer. The same thing is true for taking orders and whatever he does.

You can find very, very cheap or free services to do this in the beginning so that the cost can stay very low. The other way people lose money with online businesses is advertising. They spend a lot on advertising. You can lose a huge amount of money advertising on Google.

So be careful. I would say in the beginning, especially he's 14, he doesn't need to make, he's not like he has to pay rent. He's just, he's a kid. There's no pressure for him to make a lot of money.

I'd recommend he should just do free marketing with like social media. He should learn how to do a lot of free social media marketing first. So again, there's no cost. It's just time.

Very, very, very low risk. There's a lot your cousin could do at age 14 that would be super cheap and therefore super low risk. And he would be learning so much.

This little guy might be a millionaire when he's 17, you know? Who knows? So, yeah, but my recommendation is encourage him. Encourage him, but just keep the expenses controlled.

Don't let him start spending lots of money. It's better discipline. He'll learn better, too. It's much better discipline to keep the expenses low. Then he really has to become creative.

You'll learn more about business that way. And this is true for adults, too. You learn more when you keep your expenses low. You learn how to solve problems more creatively because you can't just spend money.

And Haman says, you know, basically confirming what I just said, What do you think about Mr. Hogue, Mr. AJ? To be an entrepreneur, we have to change the way we think.

It's the difference between being an employee and an entrepreneur. This is the biggest thing. It really is. I know it seems maybe strange to say it, but I think the biggest change is psychological.

It's the mindset. The mindset of an entrepreneur and the mindset of an employee are very, very different. And I'll tell you, I have tried to help... several people, friends mostly, start businesses.

Because I wanted to help them. I wanted them to be more financially free. And in many cases, they failed. And when they failed, the ones that failed, this is why.

Because they just could never seem to change from the employee mindset. They just seemed stuck in that employee mindset, wanting that security mindset, wanting to keep their lifestyle exactly the same, not wanting to make it cheaper, not wanting to cut their expenses and do these things I'm saying, being afraid to try lots of new things, being upset when they would try something and it would fail, and getting too upset about the failures instead of just learning and moving forward.

A big one for people who are employees who try to be entrepreneurs is they have a hard time making decisions. They think too long. They hesitate. They wait, wait, wait, wait, wait too long about every little decision.

And they spend too much time on small decisions that are not so important. And for those small decisions, just decide and go, right? It doesn't matter for most of them. Most of them don't matter.

as a new entrepreneur, a small entrepreneur, just starting, you know, speed and action is very important. Especially the small stuff. You just need to decide, go, decide, go, decide, go, decide, go.

Don't think too long about that stuff. And when you do that, you learn faster. That's why it works. You decide something. If it doesn't work, it doesn't matter.

Then you realize, oh, that was bad, and then you just try something else. And this speeds up the learning process. Again, it's in the beginning for a new entrepreneur, it's the learning time that kills you, okay? It's the survival.

It's just surviving long enough to learn. You're in a race, okay? You're in a race. Can your learning go faster, fast enough for your survival point, right?

Okay? If you can learn fast enough and keep your expenses low enough, you can do it. You'll survive and then you start to grow. But if you learn too slowly and your expenses are too high, that's when the business dies.

Here's a question, Sivan. Dear AJ, do you think to own a business you need a lot of money? No. To own a great and good business, is money the key? No.

Just as I was saying about Manuel's 14-year-old cousin, not at all. The opposite. I'd say the opposite. Now, again, you realize that unfortunately when people think about starting a business, we always think in the news, the people who get the publicity, it's the big ones.

Uber. Uber. Millions and millions of dollars of investment pouring into the company. And this is the example we read about. Facebook, way back when. Snapchat.

This is the Silicon Valley approach to entrepreneurs. And it's a bad approach. You can read many, many, many books about business that will talk about how this is really a terrible way to do business.

It's a lot of gambling. Most of those businesses die and crash. And people who build tech companies like that, they completely depend on investors. They depend on people pouring investment money into their business for years and years until they finally make money and they sell to a big company.

That's what most of those Silicon Valley companies do. That's the dream of most of these people in San Francisco. But it's a dream that happens only for a very few people.

And for most people, that's a very, very bad way to do business. I don't think it's sustainable. I think we're going to see a tech crash eventually in the next few years because I think there's a lot of bad money pouring into these companies and they're going to crash. I think they're going to see another tech bubble pop and crash.

Now for small solopreneurs, people like one person, two, three people starting some small business, you're probably not going to, especially if you're doing it for the first time, probably you are not going to get investors, okay? Probably nobody's going to give you any money at all. So it's fun. No, you're not going to get a lot of money.

You're probably going to be starting with a few hundred dollars, maybe from your credit card, maybe from your savings account. That's all. a little extra money you got. And you're going to have to try to build a business from that.

If you're lucky, you might be able to pull in a little more. Maybe you've been saving more. Maybe you have a job that pays more. You cut your expenses low.

You got some extra stuff. Maybe you can afford to open something like a restaurant or something, which is more expensive. But that's about the limit for small-time, first-time people.

I think that's actually good. As a first-time entrepreneur, you probably don't want to try to build some big company with 30 employees that's very complicated.

Learn first from something small. And maybe, like me, you decide you never want the big company because it's just not worth it. For me, it's not worth it.

So, no, I think actually quite the opposite. I think there's a big benefit to starting a business with very, very, very little money. But to do that, that means you have to go down to your baseline. You have to cut your expenses down to the lowest possible, your overhead down to the lowest possible.

You've got to learn how to survive on very little. You have to be very creative solving problems. You have to be very creative with marketing and sales and all of these things.

It's not easy, but I'll tell you this, it will teach you so much. You'll learn so much. Even if the business fails, you will learn so much. And the next time you do it, you're much more likely to succeed.

See, the problem is when people get too much money to start a business, when they start a business with too much money, they learn a lot of bad habits. They become spoiled, a little lazy, kind of like the kids we're talking about. And what happens is a problem comes up and they just spend a bunch of money. And they get used to spending money.

And the expenses go up, the overhead goes up Guess what happens? One month, the income drops a little bit. Now they're losing money. Now they start panicking, and then very quickly the company dies.

Their overhead's too much. They hire too many people. They have expensive rent. Their expenses are too high, and if their income drops for just a few months, goodbye, it's dead.

They're gone. When your expenses are super, super, super low... If you have a big problem, you know, I had, there was one point I had a huge problem in my business, big, big problem. My income dropped, but luckily my expenses were super low.

We survived. It lasted about, I don't know, maybe a year. And I was able to be more, be creative and solve the problem and got our income going back up. But we survived because my expenses were still super low.

I was still making money. And, okay, so Saif, I'm going to answer your question because basically this is what I'm talking about. How to start a business without being afraid of losing money if you fail. This is how.

Keep your expenses low. Lower risk. You can't lose a lot if your expenses are low. Again, it's no different than Emmanuel's 14-year-old cousin. If your expenses are $20 a month, you can't lose a lot.

It's impossible. You can only lose $20 a month. Most people can survive that. If your expenses are $5,000 a month, now you're in danger. It's more dangerous.

It's not wrong necessarily, but it is certainly more risky, right? Because now you could possibly lose $5,000 in a month if you get no income, no sales, right? Because your overhead, your expenses are much higher.

So this is what I'm telling you. I think for most new people, they're afraid of losing a lot of money, which is a good fear. So you keep the expenses super, super low. You start a business.

Your first business should be something cheap. I don't recommend like a big, huge new restaurant, for example, as your first business. Restaurant business is very tough.

And you should really know what you're doing before you spend a lot of money. If you want to do something with food, do a food truck, do some little tiny food, we call them stalls, but it's not really like a full building, not like a full restaurant. It's maybe just like on the street selling some food.

You start little. Start with something super small and cheap. You start getting customers, loyal customers. Then you can upgrade, make everything bigger and nicer.

That's a better way. So this is true in any kind of business. If you're new and you've never done it before, you should start it in the smallest, cheapest way possible and learn with the lowest risk.

Then go bigger after you figure it out, after you know what you're doing. So I'm not saying bigger businesses are not bad. Starting a full, big, nice restaurant, it's not bad.

But it is bad if you don't know what you're doing. It's bad if it's your first time in the restaurant business. You're going to probably lose a bunch of money.

So learn the restaurant business in a cheap way. Okay? Then you can go up to the big, nice restaurant. Amar says, I understand from you... If you're trying to satisfy your family by buying them what they want, you're enslaved by them.

In some ways, yeah, I think you're also enslaving them. Because just giving them lots of stuff, I don't think that's what families want and need most. It's more about love and connection and support. And with your children, it's about teaching them, guiding them to grow up, to be

happy, free adults. And being spoiled, giving them everything they want all the time, will not make them happy, free adults. It will make them spoiled and lazy and soft and weak.

So I know it feels good. At the time, they were so happy. Thank you, thank you. You're giving them all this nice stuff, everything they want. You give them.

It feels good. They're happy for a short time. But you'll notice that kids who are too spoiled... In general, they're not happy kids, right? Because they become unhappy very fast.

If you say no one time, if they don't get what they want, immediately they start crying and screaming and they're actually, in general, not very happy. They can't handle any difficulty. They can't handle a challenge. They can't handle not getting something.

So by spoiling them, you make them weak. You make them into little brats, okay? You make them into kind of people that are not likable, Nobody likes to be around somebody who's spoiled and screaming and gimme, gimme, gimme, I want, I want all the time.

They don't appreciate, they're not grateful. Not good. Not good. You've got to think long term. And if your child learns to just be happy with simple things, they'll be a much happier person in life.

Um, okay. I'm 19 years of age now. Lo Van Vo. Sorry, I can't pronounce the Vietnamese. I won't go to university. 19. I have a plan to make money. I plan to do it next month after quitting my current job because I have no time to do other things.

How to find someone to start with me? Well... Our good friend Henry David Thoreau, my favorite writer, has a quote about this. He has a nice line. He's talking about going on a trip, going on a journey, going somewhere.

He said, if you want to go on a journey, if you want to go with another person, you have to wait until they are ready. But if you go alone, you can leave immediately, anytime you want.

I think he has a good point. What does it mean? It means if you have to wait to get a business partner, well, now you've got to wait around. Just start the business yourself.

Just do it alone. Start the business yourself. Just do it. You don't need someone else. Design the business. Create the business in a way that you can do it just you.

There's another reason to do this. Having a business partnership is very, very, very, very, very, very, very, very, very difficult. Okay? It's not easy.

Because it's very hard to find someone who will fit with you well. Just because someone is your friend, for example, or your family member, you might love them and you have a good time with them normally. But if you try to do a business with them, it can be very, very tough.

I'm talking from experience. A lot of experience. Okay, so trust me, it's far easier just to start by yourself. I'm a big fan of being a solopreneur, just one person.

If you can do it, I think that's the best way. Especially if you're young like this, you're 19 years old, just start it yourself. Then, hey, the other benefit is you're the owner, 100%. So if

When it becomes successful, you own everything. It's all you. You get to make all the decisions. See, another problem of having a partner, it's not just waiting for them.

It's not just having arguments. The other problem is that everything becomes slower because every decision you have to discuss with the other person. Should we spend money on advertising? And you've got to talk and have a discussion about it.

Should we cut this expense? You have to talk. If it's just you, you just do it. You decide, you do it, you keep going. You're much, much faster alone.

I recommend at your age, if you're starting with a very low amount of money, you're very young, I would say just do it yourself. Yeah, you know, here's an idea from Vladislav. Um, What do you think?

What about buying things from Chinese companies online for a low price and selling it in your own country for a higher price? Try it. Try it. This is usually my answer for these kind of things.

You never know. Okay, this is another difference between real entrepreneurs and the people who are pretending. The pretend people are always think they have the best idea or they want to know if this is the best idea.

The real entrepreneurs will tell you the truth. You never know. You never know. This might be the super big success idea. It might fail. You don't know until you try it.

So I would say what you do is, the smart way to do it is you would do this with a little money, low risk, spend $100 or something, buy some Chinese goods, in this case, online, and then try to sell them in your country.

See, do you make more than $100 if you do this? You spend $100, shipping, everything, $100, You go sell it. If you make $90, you lost money. It's probably a bad idea.

You could try it one more time, maybe. But maybe it just shows maybe it's not going to work. No problem. Try something else. But you spend $100. You sell it.

You make $300. Ooh, this might be something good. Next time. You made $300, which means your profit was $200. So now you have $200 of profit. Buy $200 of Chinese goods next time.

Resell those. Do you still double your money or triple your money? If yes, then you just keep going. Bigger, bigger, bigger, bigger, bigger. That's how you grow a business from a small amount with low risk.

So my answer to you is I don't really know But it sounds like an idea worth trying. All right, I'll take one more. All right, this is a nice, interesting one because this is someone who's doing it.

Nilusha says, I hate to work in companies. I understand. So I registered my own company and started to teach yoga. Great. Now I'm a yoga teacher. Excellent.

You're doing it. Good. But the problem is I always physically participate to do the classes. Aha. Please give me some tips how I can make money work for me.

So what you're talking about is what Robert Kiyosaki talks about. It's the difference between being self-employed and a business owner. What's the difference? Self-employed, you're working in your own business.

You still have to do the work yourself to make money, right? So you're self-employed right now as a yoga teacher, meaning you must teach every class. If you don't teach, no money.

That makes you self-employed. It's not bad, but it limits you. You're limited, right? Because you only have so much energy and so much time. And it sounds like you're wanting to grow, maybe.

And maybe you're just tired of doing every single class yourself. And so this is where you must change to become a business owner. Now, for something like yoga teaching, you have a couple possibilities.

One would be to hire and train other teachers who would work for you as employees. Or maybe just as freelancers. You know, maybe there's different ways. You could pay them a paycheck.

That's more risky. what you could better do is you could pay them a percentage of the class payment, the class fee. I don't know. Maybe you've got 10 people in a class.

Let's say you're making $100 per class. So it's like you give them a commission, a percentage. So you hire somebody and you say, okay, I'll pay you. You'll get 40% or 50% or whatever.

You have to figure out the numbers. But you pay them a percentage of the income from the whole class. Let's say 50%. They would pay you $50 and you'd get 50.

It might be lower because you have to pay the rent, right? You have expenses. You have to pay rent. You have to pay for the marketing to get the customers.

So, you know, really you're taking a bigger risk than the person you hire. For them, it's easy. They just come. They have a class that you've given them already.

They don't have to worry about any of the expenses or any of the business. So I would say you probably pay them less than 50%. Let's say you pay them 40%. So,

They teach a class. That one class makes $100. You pay your freelance teacher $40. You keep $60. From your $60, you have to pay the expenses. So you have to pay for the rent of the building or whatever.

But if you do it well, you'll make some money. You'll make some profit. But you don't have to teach it. Now you're becoming a business owner. You're creating a business system.

that does not need you to do every little part. So you're going from self-employed over to being a business owner. It's another important change of mindset.

To start thinking as a business owner, you've got to think of systems, creating systems that work without you. Another possibility, I'm just thinking of random ideas here, another thing you could do,

would be to reach more people with your teaching. You could maybe teach yoga online. So instead of teaching being limited by a room size, if you're limited by the room, maybe you can only in one class teach 20 people, let's say.

But if you did some kind of online yoga teaching, you could possibly teach thousands of people from one class. Another thing you could do, you could record. There's some quite famous yoga teachers who made DVDs, who made videos. And then they sell those.

It's like a course. I have one, Rodney Yee. You probably know him. There's several others. You could do that, too. Now you do your course or your classes one time, filming them.

And then after that, you can sell them, and you don't have to keep doing them every time. You can start reaching and helping, again, possibly thousands and thousands and thousands of people.

So this is also thinking like a business person. So this is how you do it. This is how you go from self-employed, where you're doing everything yourself, to creating a business system that makes money for you even when you're not working, even when you're not directly doing everything.

And this is a nice kind of way. You start as an employee working for a company, Then you say, ah, I'm tired of this. Then you just go alone, solo, like a freelancer or self-employed, right?

Like, you know, Lucia. And then you get customers, you get successful, people like you, you get money coming in, you're becoming independent, but now you're getting a little tired because you've got to do everything yourself and you want to reach more people. And now you've got to start thinking more like a business owner and creating systems and

reaching more people without doing all the work yourself. So this is a natural progression, a natural path that you can go to achieve more and more financial freedom with low risk. Again, this is low risk, lower risk. You don't have to borrow a lot of money to do this.

All right, I think that's it. All right. Well, thank you very much. I appreciate it. Now, I will be on the audio podcast again tomorrow and another video show as well.

So, get my audio book for free. My free audio book at EffortlessEnglish.com EffortlessEnglish.com Enter your email at EffortlessEnglish.com Get my audio book for free. Thank you so much. A lot of great comments.

A lot of great questions. Very interesting. Hope you enjoyed it. I'll see you next time. EffortlessEnglish.com Get my free audiobook. Bye for now.