$1,000,000 Question For Entrepreneurs

Posted: Mar 13, 2018 12:15 PM
$1,000,000 Question For Entrepreneurs

“Do you have $1,000,000?”

That was the response to my familiar “new person I’ve met” question of, “How can I help you today?” When I ask this question, I usually get one of three main responses: an “I don’t know how you can help me” response; a “You can help me with such-and-such” and if I can, I do, expecting nothing in return; and the last response comes when I provide them help and they immediately respond back, “How can I help you, Kevin?” About 90 percent are of the first response, about 5 percent are of the second group, and the top 5 percent give the last answer. It is these people that I surround myself with. You become the average of the five people you hang around the most.

When this person asked for $1,000,000, I responded, “Sorry, but I don’t have that amount of money in my bank account… yet!” But my next thought was, “Hmm, what is your current church budget and how will giving you $1,000,000 make a difference?” In my life I’ve done some cursory research. I’ve looked at those that have won the lottery, getting millions in winnings who go broke years later. Most NFL or NBA players go bankrupt a number of years after they retire. Or why first generation entrepreneurs create multimillion dollar businesses only to have their wealth squandered by the second and third generation?


“What would you do with $1,000,000?”

I was meeting with my friend and he said he was meeting a wealthy businessman at his office to discuss business issues. After listening for a while to both of them talking, the wealthy businessman turned to me and, like he did with my friend, started asking me questions about my startup business. Typical questions and I answered them truthfully and accurately. Then he inquired, “If I gave you $1,000,000, what would you do with it?” He didn’t look up from taking notes from my answers when he asked the question. I rather quickly told him, “I’d give it back to you!”

He stopped writing and looked up from his notes and straight at me and with a dumbfounded look on his face asked, “Why?” With a twinkle in my eyes and confidence in my voice I said, “Because 1) I’m not ready for any or that large of an investment, yet, and the most important, 2) I would not know how to handle $1,000,000 until I first learned how to handle $100,000 in revenue or profit!” He paused, then smiled, “You’re the very first person I have ever met that has refused to take and spend my money!” Well, I meant it. I’ve watched enough interactions with fellow entrepreneurs since and have asked this same question and observed their answers. And it is not pretty.

Most respond with something like, “Well, I’d pay off all of my bills, invest some of it, and then I’d buy a building and equipment (an engineer type)/a new computer (writer/graphic artist type)/a house so I wouldn’t have to move ever again/I’d hire my family to help me with a business.” It is nearly always about what they’d buy or spend without ever thoughtfully thinking about how to invest it. By that, they have not sold any products or services to the point they need an infusion of cash to grow their business.

$1,000,000 bank account comes from $1,000,000 work

I have volunteered for Junior Achievement’s (JA) programs which are focused on teaching high school kids about business. During one term with one school I found out one of the kids was doing a side hustle selling breakfast burritos at school. Cool. He has his reason for going into business. From his profits, he paid for his daily bus fare to and from school so he could graduate. Reminds me of me failing history in high school, my mother made me pay for my summer school class. She didn’t punish me for failing my class, but let my failing grade and subsequent making amends to be punishment enough.

I have spent a percentage of my time at JA and other organizations or with people to invest in others, but I no longer am giving back to my community. My reasonings? Giving back implies I took from others or my investment is an expectation of a return right back to me. Nothing could be further from the truth. When I invest, I do have an expectation of a return, not to me specifically, but that my investment of time, money, or experience in any person’s particular undertaking has a worthwhile result for them. I have an expectation that my investment is not to be wasted frivolously, but weighed carefully to get the most bang for my resource buck.

If you asked anyone who wants $1,000,000, nearly everyone would respond with a resounding, “YES!” But if you tell them what they’d have to do to get it, how hard they’d have to work, or how many failures they’d have to endure to get it, most would quickly back down. Any hint of learning, growing, and acquiring more knowledge to provide more value to others would be met with backpedaling on their answer.

I’ve learned that in order to bank it you need to work it.

$1,000,000 money habits grow from $1,000,000 money mindset

What turned me around? Learning from the failures of others and watching the documentary Poverty, Inc. with my wife made a huge difference in our views of helping others. Specifically, that most help can actually hurt not only individuals who are working to improve their lives, but also can ruin an individual, industry, or even a local economy. Any giving back can actually inhibit both the giver and receiver from taking responsibility for any expected outcome of what has been given. If someone is hungry or naked, by all means give, but the higher form of charity is investing in others with an expectation of something good will come of it.

If you want to see this in real life, listen to Dr. Yaron Brooks describe Asia after the Korean conflict. It took investments, not charity, but it was the free market, learning to earn $1,000, then $10,000, then $100,000, not “free money” where no growth in wisdom is expected to be learned.

So when I ask the $1,000,000 question, I am always listening to hear what their money mindset is. Do they have a consumer mindset of spending it (even on a business they think they’d like to “invest” in) or do they have a producer mindset, weighing their options and seeing how they’d get the most from it?

“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.” Warren Buffet.

What will you do today to improve your and others' various investments?