You cannot sleep. You toss and turn. In the morning your stomach is in
knots. Your every thought is about money and what will happen if — or
when — you run out. Like many people under stress you may turn to
alcohol or drugs to help ease your tension. Financial fear is
debilitating. We have all been there. Even the wealthy have at one time
or another felt the unease that money problems bring. For the rich,
unease could come in the form of a quarrel with a money manager or a
trust fund supervisor. Many of us just look at our bank accounts and
gasp, “How can that be? I should have more money than that!”
Uncertainty about the financial future dominates the lives of hundreds
of millions of people: Where will I sleep? How will I feed my family?
For many, just thinking about these worst-case scenarios can be
paralyzing. And worry and its friend stress and anxiety is often the
catalyst that leads to health issues, which incurs its own set of
financial (as well as physical and
emotional) problems. Furthermore, in my opinion the majority of criminal acts are
motivated by the desire for financial gain. Lack of financial resources
can lead to escalating cycles of dysfunctionality and crime.
I have thought and worried about my financial resources every
day for fifty years. Can I do this? I ask myself. Is there enough money
for that? A mental Income Statement became my constant companion.
Fearful of having to live a life without enough money, I
focused on saving and constant work, and I was able, after thirty years
of 10 percent savings of income, to buy an apartment and accumulate savings. My
organization — NFTE — has saved over eight million dollars in its
Endowment. Both of these saving scenarios have been at least partly fear
Financial fear can be debilitating. It can shut the body down,
interrupt creative work, and demolish relationships. Financial disaster
is the destroyer of dreams — the lover of divorce and lonliness.
Excessive fear and accompaning anxiety makes acedemic achievement
impossible as learning becomes lost in the chemical imbalance it
As a specialist in drop-out prevention at the high school and
junior high level I often worked with kids that could not focus. Many
times what was viewed as insubordination and disruptive behavior was the
result of the trajedy of chronic financial worry and its effect on the
brain. Many issues with self esteem can be traced to the self blame that often
comes with lack of financial resources.
This is true of an individual, but what about the larger picture?
Business failure is a leading cause of poverty, and saps communities of
capital and morale.
Learning to handle financial uncertainty and a lack of resources
is a skill. Financial skills can be taught. Once an individual learns
how to cope with the uncertainty of personal finances, changes can begin
to be made. The future is seen as something that can be taken hold of.
Financial skills are not lost once learned and become a life changing
A major reason that every child should learn how to start a
business and have the experience of ownership is to learn the basics of
dealing with risk and uncertainty, and the accompanying emotional
stress. Risk and uncertainty can only be taught and understood by going
through the experience. The very act of entrepreneurship is risky.
Buying low and selling high, the entrepreneur’s mantra, is never
guaranteed. A product can lose value before it can be sold, or it may be
stolen, or it can sit in a warehouse because demand is low. A desirable
product may never take off because the right consumers never hear about
it. Timing can be everything. This is the essence of the entrepreneurial
process. Considering these risks, all of which come with a healthy dose
of fear, many would say the entrepreneur has one of the riskiest job in
Entrepreneurship takes place over time. It involves attempting
to forecast a future that is unknowable, and meeting future needs by
investing time and organizing resources. Never completely sure of
consumer needs or what competitors are doing, entrepreneurship is always
uncertain. But with the risks come benefits, both to the entrepreneur
and to society. As a community within the business world, entrepreneurs
create employment and generate wealth. They introduce new products and
improve old ones. They prepare a society for the future. They solve
problems, unite diverse people, and allocate resources by sharing
knowledge through prices. When the make profits they add to the capital
Conversely, when they lose money by combining things that, say,
cost 50 dollars and sell them at 40, for a 10-dollar loss, they
subtract from society the value of 10 dollars. A booming and growing
economy is one in which entrepreneurs are making profits and expanding
their businesses; a recession is when they, as a community, are losing
money making mistakes.
The entrepreneurs’ craft is to see what will be needed at a
future time and plan for it today. They use the savings of the society,
in the form of loans from banks and investments from venture capitalists
to organize solutions to problems. These are the solutions that will be
brought to the consumer in the future.
As with all subjects, the earlier young people are exposed to
new ideas and learn new skills, the greater impact they will have in
their adult lives. The more young people are exposed to
entrepreneurship, the more they will develop financial awareness and the
better they will be able to cope with the inevitable stresses that come
with earning and managing money later in life. Exposing young people to
business experiences involving entrepreneurship is a valuable strategy
to prepare them for an uncertain world. In doing so, we will create a
community of entrepreneurs that can solve problems and create wealth at
the same time. And that will help us all.
You can read Part 2 of this post here.
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