They often have a man cave where they can hang out and act
like men. It is an interesting observation that you find that most of the
ostentatious entrepreneurs are often men. This should not surprise, as being an
entrepreneur requires a big strong ego to be able to cope with the rigours of entrepreneurship.
So what is wrong with owning all the “toys”? Nothing really!
There must be some reward for working hard as an entrepreneur and accepting and
managing the attendant risk. The point of entrepreneurship is to create wealth,
so buying real assets is completely aligned. While many of the “toys” are not
really assets in the truest sense of the word, there is nothing inherently
wrong in doing so.
The problem that arises with lifestyle entrepreneurs is that
they often start to shorten their working week and before you know it they are
only working 3 days a week. Invariably
they have hobbies, for example fishing, and that becomes their driving force. They
start to run the business merely to fund their hobbies and the “toys”. They
stop growing their business in order to enjoy the lifestyle, and manage the
business accordingly.
This lifestyle management invariably puts the business on
hold, and the world marches on by. The problem arises when the entrepreneur
wants to sell because they want to retire, or they suddenly find the business
is in trouble. What does the entrepreneur have to offer? A stagnant business that shows no real growth
after accounting for inflation! A
business that is no longer leading edge! A business that is worth nothing!!
Quite often they will provide a long list of the income that they “steal” out
of the business. The cash sales is an obvious one. But who is going to believe
them?
So the lifestyle entrepreneur often presents as an excellent
role model, especially once they are established and the lifestyle is
established. However, later in life they often present as desperate people who
have a bad business, no real pension, and no opportunities on the horizon, and
the fear in their eyes makes them appear oh so pitiful as they confront their
future.
Remember that I am generalising and you may well be someone,
or know someone who has been able to avoid the traps and still be a lifestyle entrepreneur.
However, I have also seen many people facing a very dark future.