Today I want to tell you about something that could change your life completely: INCOME. Not everyone understands it, but if you do, your life will be so much better than those who don’t.
“Have you ever seen someone who makes 10, 12, 20 times more money than you, and asked yourself the question, ‘How’s that even possible?’ Well, I’ve wondered that.
What I discovered is you can turn your yearly income into your monthly income, and when you do, it’s going to absolutely blow your mind. That’s what I’m going to show you how to do in this article.
A Japanese Tea Master once said, “Living a good life comes at a high price. There exists an alternative lifestyle that is more affordable, but it lacks the quality of a good life.” His words echo the sentiment that quality often comes with a cost.
Think and Grow Rich
Let me tell you a story, a while back, someone handed Bob a copy of “Think and Grow Rich.” At the time, Bob was financially struggling, he had no job and no business experience, and he was clueless. The person insisted, “Bob, read this, follow the advice, and you can achieve anything you desire.” Bob didn’t really buy into it, but he could sense the person’s conviction. So, he thought, what the heck, all he wanted was some money. He believed that if he had enough money, his problems would vanish. Bob was earning $12,000 per year, but he owed $26,000. Even if he put every cent he earned towards his debt, it would take 15 months just to break even. Changing his situation seemed unlikely.
Guess what happened within a year? Bob was pulling in $36,000 per month. He went from an annual income of $12,000 to a monthly income of $36,000. It wasn’t that he suddenly became a genius; making money doesn’t require extraordinary intelligence. What it does demand is understanding of some fundamental principles, and that’s what I want to share with you. But first, let’s take a look at the three strategies for earning money.
Three Strategies for Earning Money
Trading Time for Money.
One common strategy for earning money is trading time for money, often through employment. In this approach, people exchange their time and skills for a fixed or hourly wage. Whether working a traditional 9-to-5 job or offering services as a freelancer, the income is directly tied to the time invested.
While this strategy provides a reliable source of income, it has limitations. There is a cap on the amount you can earn since time is finite, and any increase in income usually requires more hours worked. Additionally, this method may lack flexibility and independence, as you are bound by work hours and employer’s policies.
The upper limit for earnings through this approach is around $15,080 before tax deductions, encompassing the income bracket for 60% of individuals.
Investing Money to Earn Money.
Another strategy involves using money as a tool to generate income. Investing allows you to grow your wealth over time. This can take various forms, such as stocks, bonds, real estate, or starting a business.
The idea is that the money invested has the potential to earn returns, whether through capital appreciation, dividends, interest, or profits from a business. Unlike trading time for money, this strategy has the potential for passive income, where money works for you.
However, investing comes with risks, and success often requires a good understanding of the chosen investment vehicle and careful decision-making. By employing this approach, you may generate an annual income ranging from $40,000 to $250,000. Approximately 30% of the population falls within this income bracket.
Having Multiple Sources of Income.
A third strategy for financial success is diversifying income streams. This involves creating multiple sources of income, which can include a combination of earned income, passive income from investments, and income from side businesses or freelance work.
By not relying solely on one source, you can mitigate risks associated with job instability or market fluctuations. Diversification provides financial resilience and can open up opportunities for increased overall income. This strategy requires a proactive approach, as you need to identify and develop various income streams.
While it may take time and effort to establish multiple sources of income, the long-term benefits can contribute to financial security and independence. By employing this approach, you could generate anywhere from $100,000 to $100,000,000, and this constitutes the segment representing 10% of the world’s population.
Now let’s talk about how to make this happen.
Creating Income-producing Assets.
People who don’t have much money often stay that way because they rely only on themselves for income. In contrast, wealthy individuals become rich by collecting assets that generate income.
In “Key Person of Influence” by Daniel Priestley, one of the key concepts he discusses is the shift, from focusing solely on income to building and accumulating assets. Priestley said that many people get stuck in a cycle of working for income, without creating long-term assets that can generate wealth independently.
He introduces the concept of the “Entrepreneurial Ladder,” which consists of five levels:
1. Labourer: Trading time for money, typically through a job or hourly work.
2. Manager: Organizing and overseeing the work of others.
3. Marketer: Creating a personal brand and becoming known in your industry.
4. Innovator: Developing unique ideas, products, or services.
5. Key Person of Influence: The top level, where individuals are recognized as influential leaders in their field.
To turn your annual income into your monthly income you have to move up this ladder to become a Key Person of Influence. At the Key Person of Influence level, you will not solely be reliant on your time and labour for income. Instead, you will have created valuable assets, such as intellectual property, a strong personal brand, and a network of influential connections, that continue to generate income and opportunities.
So you should consider shifting from a sole focus on income, trading time for money, to building assets. Think strategically about your careers and businesses. By becoming a Key Person of Influence and creating valuable assets, you can achieve financial success and greater influence in your respective industries. One of the many ways to do this is to apply this principle.
The Principle of Leverage Across Arenas.
One day, someone asked me about my favorite physics principle. During our chat, they shared an interesting idea: that principles, no matter where they originate, share common traits. They highlighted that a principle from one field can be applied successfully in another.
Intrigued, I sought more understanding and received an example: applying a transportation principle to the financial industry. This explanation resonated with me, leading me to reflect on how principles have the power to transcend different areas.
This perspective brought to mind Steve Jobs, who, as mentioned in a book I read, revolutionized five distinct industries. The key to his success lay in his ability to connect seemingly unrelated experiences and ideas. Jobs’ wide-ranging and unique experiences enabled him to perceive connections that others might overlook, ultimately leading to transformative changes in the world.
Big Money.
Yes, you could make in a month what you currently make in a whole year. It might sound like a big claim, but it’s true. I learned about this from a book called “Big Money” by Napoleon Hill, and I’ll explain how you can do it too. Pay close attention!
Napoleon Hill once conveyed that the flow of money, especially in large quantities, gravitates towards those who effortlessly accumulate it, akin to water naturally descending downhill. Expanding on this notion, Hill depicted a powerful stream of life comparable to a river. One side propels individuals towards wealth, carrying them onward and upward, while the opposing side leads those unfortunate enough to be caught in its current downward to misery and poverty. According to Hill, individuals amassing great fortunes recognize this lifestream, attributing it to their thought processes. Positive emotions of thought align with the affluent side of the stream, while negative emotions align with the side leading to poverty.
Hill underscored the significance of this concept, emphasizing its relevance to those aspiring to accumulate wealth. For those finding themselves on the side of the stream leading to poverty, Hill likened the understanding of this principle to an oar that could propel them to the opposite side. He stressed that the application and utilization of this knowledge are crucial, as mere contemplation without action yields no benefit.
In another insight, Hill discussed the dynamic interchange between poverty and riches. While poverty can willingly replace wealth, the transition from poverty to riches typically requires well-conceived and meticulously executed plans. Poverty, being bold and ruthless, requires no plan or external aid, whereas riches, being shy and timid, necessitate attraction.
This concept aligns with the notion of attraction discussed in “The Secret.”
The Law of Compensation.
Let’s talk about “The Law of Compensation.” Ralph Waldo Emerson explores the concept of balance in the universe, and the idea that individuals will be compensated or rewarded, in accordance with their actions and contributions.
All workers will definitely get paid. No matter what your career path is, try to improve. Keep working to get better at it. Remember, you’re not competing with anyone else – your only competition is yourself.
Emerson advocates that there is a natural equilibrium that exists, and individuals will ultimately receive what they deserve based on their thoughts, actions, and character. The concept emphasizes the interconnectedness of the moral and material aspects of life, suggesting that one’s inner qualities and attitudes shape their external circumstances.
Emerson encourages individuals to cultivate virtues and positive qualities, as they will ultimately be reflected in the compensation they receive from the universe. The essay serves as a philosophical reflection on the idea of justice and balance in the cosmic order.
Effective communication.
Effective communication is crucial for financial success, particularly through verbal interactions. Developing strong interpersonal skills, active listening, and clear expression are essential. Public speaking abilities can create lucrative opportunities, impacting success in presenting ideas or pitching to investors.
Networking at events and social functions helps establish valuable connections for potential ventures.
Negotiation skills play a vital role in financial outcomes, requiring confidence and understanding of both parties’ needs. Mastering the art of selling through verbal communication, including online skills like email and social media, contributes to a positive impression.
Continuous self-improvement, staying informed, and adapting to changes position you as a valuable asset, increasing financial success.
Final Thoughts.
To achieve financial success, you need to undergo a mindset shift, engage in strategic thinking, and create income-generating assets.
By understanding and applying principles like leverage, attraction, and compensation, you can transcend financial limitations and achieve prosperity.
The key lies not only in managing money but also in actively learning how to earn it. As you’ve probably noticed, schools often overlook this crucial aspect, making it essential for you to take charge of your financial education and pass on this knowledge to future generations.