Once you achieve your goals, you often start to play a different game. I've seen leaders who fought their way to massive success begin to play it safe. Reaching any level of success gives you a choice to set your sights higher or find comfort in what you've achieved.
The problem that comes up so often is a shift in identity -- how you see yourself. You create a new future with your idea. Founders often make their achievements a central part of their identity. After you reach financial freedom, you change. You take fewer risks and hold tight to what you have.
My Success and Failure
In 2001, I started an e-commerce business, Event Marketplace. We were part of the first era of companies selling tickets to sporting events online. Our revenue exceeded 2,400 percent growth in the first three years. This would have put me on the Inc. 500 list in 2004, if I'd applied. My company's growth became a central part of my identity.
In 2010, I made a massive mistake, losing $3 million on one deal with my best friend. This forced me to reflect on what I'd missed after success.
Here are three mistakes I made after achieving success:
1. Getting Complacent
Your commitment to growth is a huge reason why leaders like you have achieved success. You embraced change to create a business that served your clients. You embodied many positive traits during your successful journey. Then, you began to change.
My journey to success was fueled by courage. Once I got to about $5 million in revenue, I stopped playing to win with my strategies for company growth. Then, I began to grow complacent. Success caused me to drift.
For many founders, the "change or die" mantra that started the business transitions to a search for ease. You've earned a break, right? Instead of getting complacent, you must evolve. For many founders, they know their business mission is more important than sitting on the beach. Avoid complacency by finding the real meaning for yourself, and grow as a leader by continuing to serve others.
2. Spending Money on Stuff
In the beginning, you tend to invest your money back in the business. You improve marketing or innovate technology. Spending money on cars, watches and vacations is furthest from your mind.
But as you make more money, you start to treat yourself to the finer things. You begin to rationalize treating yourself because for so long every penny you made was put back into the business. I see this mistake often, resulting in people overspending on the luxuries of life. For some, it's bigger homes. You may prefer fancy cars. The money rolls in now easier than it did in the beginning. It's also easier to spend. This creates more pressure to work harder.
Spending your money on stuff isn't a bad thing. However, it can be excessive when you don't realize you're spending your way to more stress. In 2018, Shaquille O'Neal gave advice to young people on CNBC that's fitting for founders, too. O'Neal suggested that for every $100 that comes in, you invest $50 and don't touch it: "The real smart people -- the billionaires of the world -- they take half of the $50 and put all that way." He said you can have fun with the rest, spending that $25 on anything else you want.
3. Failing to Diversify
Growing a business usually requires making investments to create the liftoff you need. You may find yourself investing for years while the company grows. On one hand, this is smart. You can get a better return from investing in your business than you can elsewhere.
On the other hand, you may realize your entire net worth is tied up in your business. When you have too much money in one class of assets, you're exposed to higher levels of risk.
One way to diversify your holdings is to look for other ways to create cash flow and net-worth builders. Given your business is an active investment, you may want to consider passive incomes.
For my podcast, I interviewed Marco Santarelli, founder of Norada Real Estate Investments, a nationwide provider of passive investment properties. After working with thousands of real estate investors, Santarelli discussed with me the dangers of having all of your money tied up in one investment. He shared, "You need to consider the possibilities of diversifying into other asset classes that can help you weather the fluctuations and volatility of your assets. When done strategically, diversification will add to your rates of return."
While you may believe everything will be smooth sailing when you're successful, success brings new challenges. I share with you my mistakes so you can make smart choices about how you'll live after you reach your goals.