WH, "How To Direct Your Future," Carl Schramm

Sun, Feb. 04, 2007

"How to direct your future"

Carl Schramm
president and CEO of the Ewing Marion Kauffman Foundation in Kansas City

First things first: Remember that how much money you have is not the measure of success. Ultimately, as Thomas Jefferson suggested, life is connected to the liberty to pursue happiness. And your pursuit may or may not require a lot of money.

Economic success, like happiness, is different for each person, because we all have different aspirations and hopes. And indeed you may conclude that "psychic income," the joy that comes from doing something you love, is far more important than what you earn.

You should appreciate the value of family and strive to create a family supportive of your children - it is the best inheritance you can leave.

You also want to blend the right amount of income with the special sense of fit that comes from doing the things that might make you happy. This might be building bridges, coaching kids, being a journalist, making money by managing money, or being an entrepreneur and starting a business.

That brings us to the discussion of the other kind of income: the tangible kind. When one of you was very small, you said that firewood was the stored-up heat of the sun. That's a perfect analogy for wealth. At the right time, it gives back the heat of hard work.

Financial wealth is created by effective (often hard) work and successful investing. To make money by working requires skills, and to make money by investing requires money. That starting point is to gain the education and expertise that permit you to become smarter, wiser, and increasingly more valued participants in labor markets.

Investment in your schooling and in all kinds of enriching experiences that permit you to develop a deeper context for understanding the world around you is the way in which you become equipped to enter the market ready to make wealth. Your ideas, knowledge, and ability to work are your security

Now, all of this is really a prelude to more practical advice. The question is: How should you deal with the economic world ahead of you?

We live in the most entrepreneurial time in history, giving us continuous innovation and an extremely dynamic U.S. economy.

But with those changes comes another change: A relatively predictable career with certain expectations of security and stability has become a thing of the past.

You are competing not only with American kids, but also with more and more kids from other countries whose parents have worked hard to prepare them for what is now a worldwide market for talented and skilled workers.

So what should you do to control your future? You had better be ready to be entrepreneurial either on your own or inside an organization that has an entrepreneurial culture. Today, most new jobs created every year are in firms less than five years old.

You will be successful only to the extent that you can handle innovation and change. Make uncertainty your friend. See the opportunity. Take your classes as if you were preparing for life as an entrepreneur. Recognize that American history is a story of entrepreneurship and that individual risk-taking is the central theme of our history.

Second, choose the right partner. Your choice of a spouse is the most important decision you will make, and it involves a lot of risk. If it is the right choice, the returns will be extraordinary.

Third, build a financial reserve, because this will be critical to achieving a comfortable life. This means denying yourselves the things young adults all want in exchange for the cold comfort of a bank account.

Fourth, understand the importance of science and technology. You do not need to become a scientist or an engineer, but you really must understand the logic of science and its processes to know how science gets into the stream of practical ideas and how it shapes commerce.

Finally, practice being an inventor. We used to think that inventors were born, not made. Some are. But everyone can be much more creative with a little practice. The more you work on creating new ideas, the faster they will come.

I hope when you are a great success - however you choose to measure success - you can look back on a happy life of entrepreneurial success in helping others. That is a special kind of wealth. As soon as you can, you should give back to your community by giving your time or your money to your schools, to organizations that advance the community welfare, to your house of worship, and perhaps to your political party.

Every one of us has benefited from the generosity of others, people who have given of themselves or their treasure. Their gifts have helped pave the way for you, and you should, if you can afford it, make the way smoother for someone who will come after you.

You will find that this is an important part of developing the moral or ethical person you must become - someone who is not self-righteous, but rather privately comfortable for having quietly paid his or her dues along the way. In a strange way, this knowledge will prove a comparative advantage in many business situations.

I know you will do well.

Love, Dad

The Ewing Marion Kauffman Foundation Web site address is http://www.kauffman.org