CEOs and Mega Millions

As we all return to work having not won the Mega Millions jackpot of over $1B (with a B!) in prize money (shout out to the winner in Illinois!) a few lessons for CEOs and CFOs that occurred to me.

I am not a lottery player but enjoy hearing about the winners, how people spend their money, the cautionary tales, and am always riveted by those who lose it all.?How do they manage to blow it all away on stupid things??How do they get suckered into poor investments? Etc.?It’s easy to pass judgement and proclaim that we would never make those foolish mistakes.?I know I have in the past.

But if you take a step back, you see this happening time and time again in the business world.?After a few years of grinding at their company, CEOs tend to have a “I earned this” mentality.?While no one is discounting this, do you really need the following?

• Season box tickets to your favorite sports team on your P&L
• Company homes in your favorite vacation spot
• Company cars that progressively get more and more expensive as you upgrade your wheels on the regular
• Salaries go from manageable and scalable to ridiculous and risky.?If your business is <$10M in top line revenue, you do NOT need to make over $1M in baseline salary.
• Cash poor.?If you are factoring or borrowing money (especially as the interest rates rise) to make payroll, you absolutely should not be paying yourself a ridiculous salary or doing any of the above.

No one denies that you’ve worked hard to create and build a growing organization.?And CEOs should benefit from their risk, their grind, and their hard work.?But consider taking that benefit in moderation.?Consider the add-backs that you will have to negotiate over as you try selling your company.?Consider the image and the look that is portrayed to your leadership and your employees.

On the other hand, for those that the above doesn’t resonate with, try the “winning the lottery brainstorming” exercise.?If you did win the lottery, what would you spend the money on??How does that materialize in your organization??Yes, if you are running payroll to payroll, you probably aren’t going to make major investments right now.?But if you have extra cash, what is a good use of that money??What investments in technology, people, marketing can you make to bring more value to your company??What adds fuel to the growth fire??Even if you can’t afford it now, have a formalized wish list that you share with your CFO to strive towards.?

I would argue investing in yourself and your company will have significantly more ROI than those season tickets.?Don’t waste your cash.?BUILD your wealth for long term gain.