I recently had a conversation with a company I’m collaborating with to create business courses and my colleague brought up an interesting observation.
This particular company focuses on all aspects of personal development – from health to relationships to building a business – and my colleague mentioned how he’d heard several coaches relay the stories of how they’d been burned by revenue share payment models.
Let me explain, there’s this thing going on online right now for membership sites where those who contribute content get a percentage of the revenue made from the membership site. It’s a pretty common practice, and I’m actually a mentor for an awesome site for millennials entrepreneurs, but apparently I’m one of the few who hasn’t been burned.
My colleague was telling me how the coaches were saying they never got paid by the companies they were working for.
My response was, “Well, did they ask to see numbers and sales projections? That’s the first thing that comes out of my mouth when I’m approached with something like that. If the company can’t give me an answer then I don’t work with them.”
He responded by saying that many of the people in the personal development industry don’t like having conversations about numbers. Many of them consider themselves creative types and avoid math.
At this point I said, “Thinking you’re bad at math is no excuse for avoiding your money.”
Believe me I know. Math and I have been at odds since the third grade. That’s when I failed my first math test and realized numbers and I didn’t get along. I spent the next 15 years avoiding anything having to do with numbers until I found myself broke and without a job in 2010.
But here is the frank truth about money: Money is common sense, not math. In fact, the math used in managing money is incredibly basic.
For example, common sense tells you that emergencies will happen and as such you should make sure you’re saving money for them.
Common sense also tells you not to spend more than you earn.
Common sense tells you to ask about payment terms before signing any contracts.
So if money is more about common sense than actual math, why do people use being bad at math as an excuse?
Because it’s a cop out. One that I gladly used most of my life to avoid fiscal responsibility.
Additionally, money has more to do with behavioral psychology than the actual numbers. We get the numbers, and we know what we need to do from the common sense perspective, but we still don’t do it.
That’s why it’s up to us to do the detective work to find out what’s really going on. Here are three places to start based on my experience as a personal finance writer and business coach:
- Are you experiencing any self-worth issues? For example, does the thought of negotiating freak you out? Does asking for more seem impossible? Do you only take what’s given to you? Do you have loose boundaries?
- How good are you at managing your emotions? Just like the stock market goes up and down, so do our bank accounts and that’s why it’s imperative that we learn to manage our emotions when it comes to our money. Otherwise we become emotional spenders, hoarders and workaholics.
- Have you taken the time to figure out what you want out of life? More and more financial planners (and financial companies like Betterment) are asking people to create their financial goals based on their life goals. And why do you think that is? Because if we know what we want we’re more likely to do what it takes to get there, including managing our money.
These questions may be scary, but they are necessary if you ever want to get your financial house in order. By answering them honestly you’ll have a better picture of what’s going on the inside so you can take the necessary actions on the outside.