The Road To Financial Security Through Entrepreneurship
b'With Douglas McCormick, Author of\\xa0Family Inc.: Using Business Principles to Maximize Your Family\'s Wealth,\\xa0Managing Partner and Co-Founder of HCI Equity Partners
After years of experience in the investment world and corporate boardrooms, Douglas McCormick, Managing Partner and Co-Founder of HCI Equity Partners, developed a formula for family financial security which he explains in his new book, Family Inc.: Using Business Principles to Maximize Your Family\'s Wealth.
Our previous interview with Douglas McCormick focused on the concept of operating a family within the framework of a corporation to ensure stability and wealth. For today\\u2019s segment, Douglas addresses the value of having your own business because, as he writes, "Today only 15% of the population earns more than $100,000, so probability suggests that the path to wealth is not through traditional employment alone." A compelling statement, supported by the fact that wages in our very competitive labor market are not that high and neither are overall returns on investments, meaning you have to save heavily in order to achieve financial independence as a paid employee.
Douglas\\u2019s theory of why entrepreneurship can better generate significant wealth is based on four fundamental points:
* Entrepreneurs are able to work longer in life. Instead of forced retirement, entrepreneurs can scale down their involvement, working on a part-time basis, while the business still operates and produces income.
* Returns on capital in a private business can exceed 50% per year.
* The tax code for entrepreneurship is more efficient.
* A good business can be sold for a profit.
On the cautionary side, owning your own business is not without risk and, for most people, Douglas says, it\\u2019s a game of \\u201cincrementalism\\u201d, requiring certain skill sets and certain amounts of capital. Although entrepreneurship can create a lot of wealth, it\\u2019s also not easy to get your money out of the business at any given time, and you also have to have the stomach to ride the waves of volatility that can occur in your monthly earnings.
\\u201cTo be an entrepreneur and be successful,\\u201d Douglas says, \\u201cI think you\'ve got to have a little bit of a war chest where you can afford to go without a paycheck for a period of time.\\u201d\\xa0
Owning your own business, as opposed to taking the paid employee route, managed properly can not only lead to financial independence and security but can also provide a sense of fulfillment and life purpose that comes from creating and building your own life story.
Sound interesting? Go deeper by reading \\xa0Family Inc.: Using Business Principles to Maximize Your Family\'s Wealth.
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Steve Pomeranz: Just recently I interviewed my next guest.\\xa0 He\'s a private equity investor and entrepreneur.\\xa0 His name is Douglas McCormick and it was about his new book'