Do you own a martial arts school?
Are you thinking about opening a school?
It really is an enticing idea right… Getting paid to do what you love everyday…
Im here to tell you though, opening a school is not for everyone.
So much of the benefits of that come along with being a school owner are available to you without that kind of commitment.
The comradery, the health benefits, having your family immersed in the lifestyle even making a decent living teaching; all these things are possible without opening your own school
Owning a Martial Arts School is Not For Everyone
I ultimately decided that one day I wanted to have a small baseball team of kids and to be able to afford them it was going to take more financially than what a school could provide.
Look I know people who own north of 5 schools and if you think they are making a ton of money that is just not the case. So to think just one school is going to make you happy financially is strongly dependent on your specific goals.
The Fallacy of “Having Enough”
Now, many are in the business of teaching martial arts for several positive reasons: help others, embrace a healthy lifestyle, make money doing what they love.
For some, as long as they are making enough doing what they love then they are happy.
Therein lies the problem What is enough?
Many folks underestimate the amount of money it takes them to be truly happy. As the Nobel prize winning author Daniel Kahneman says, you need to make at least $75,000 per year in order to achieve the happiness ‘tipping point’.
One of the mentors that I follow is Tai Lopez. Tai is a world renowned business coach and is also a Jiu-Jitsu and boxing practitioner. He understands just about as much as anyone the threshold of happiness versus the money in a persons pocket.
Tai says that this point of $75,000 a year is simply the tipping point of moving from scarcity to independence.
Now if you live in Orange County like me, that number is considerably higher. Add in some kids, that number skyrockets as well.
Do not underestimate the amount of money it is going to take for you and your family to be happy.
Ever notice how people that say money isn’t everything don’t have any money. #JustSaying
Grant Cardone (@GrantCardone) September 3, 2015
Money wont make you happy .. well more money might not make you happy but it wont make unhappy either.
Bottom line: You are in business to make money. Your ability to help others, life the lifestyle, put food on the table, and OH YEAH retiring some day depends on your ability to translate what you love into income.
#1 Mistake Made By Martial Arts School Owners
I have a question: What happens to your academy once you can no longer teach?
Let me guess
Your plan is to pay an instructor, a program director, a sales coordinator
and hope for the best.
This means that your livelihood and ability to live and provide for your family now depends on the capability of others to do as good a job as you have.
YIKES
This is a pipe dream. And it leads into the biggest mistake that gym owners make financially which is LIVING IN THE NOW.
In my experience, finding individuals you can hang on to for more than 5 years is very difficult in our line of work. This is undoubtedly one of the greatest headwinds facing aging school owners today, but lets say you have that all figured out
How much do you really think will be left over once you pay staff, bills, and taxes.
Not enough
The #1 Mistake Made by Gym Owners: Living In The Now
You see it all the time. These gyms arent making a ton of money yet the instructors are driving cars they cant afford, houses that rival your lawyers you know, and are simply living a lifestyle that is unsustainable.
Living in the now is not just a problem with the wealthy or even the poor. It is systemic.
Here in Orange County you see it all the time. Doctors, lawyers, entrepreneurs; all living up in the Hills of Laguna next to Kobe Bryant but they aren’t making Kobe Bryant dollars.
These people earn more than most of us ever will, yet they are living paycheck to paycheck and are one bad break from being bankrupt.
This is no different than the problem facing average school owner I talk to.
Look, this is not to pick on school owners in particular, because our generation as a whole is just not putting back enough of what they make.
The enormous difference is that unlike most Americans who have company match, auto saving into a retirement account, or a pension to fall back on, school owners generally have nothing.
They are on their own. And like the average saver, when left to ones own devices they tend to look at the shiny things they can afford now and forget the enormous problem they are faced with ahead.
Nearly half of Americans are saving no more than 5 percent of their income, while one in five (or 18 percent) is saving literally nothing at all. Bankrate.com [1]
If you are a school owner you above most professions must look to the future and find ways to build yourself an income in retirement that is not dependent on your aging body to work, or someone elses ability to run the show for you.
To do this you have to start putting back some money and putting it into vehicles that will go to work for you.
Practical Example
If you were to simply max out a Roth IRA for the next 30 years and were to earn even a modest 5% return on average, you would have a $365,000 cushion to supplement your retirement goals.
Now that will likely not be enough to retire comfortably even with your school as a supplement, but it goes to show you what is possible with even a conservative savings strategy.
In my line of work I see some extreme highs and lows. Some people will come in to my office with more money than they know what to do with. Literally, they could retire at 40 and live however they want.
But more often than Id like I see people come in looking for any hope that they will be able to retire without running out of money, and the answer is There is nothing I can do.
The last thing I want to see is this happen to the instructors and school owner out there who started a business with the goal of improving peoples lives and ending up with nothing to show for it.
For more information on making sure this doesnt happen to you pick up my FREE Master Your Money Training Manual. This manual gives you everything you need to know about building a savings strategy from white to black belt.
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