I remember the day when i got my first salary. I was happy and all cheered up. I called up my friends and decided to have a blast. We enjoyed alot. After four days my salary was over. I was worried about the next 26 days. Lastly, I went to my dad and asked for few extra bucks.
After that i started thinking about the ways to make more money.
An average millionaire has seven sources of income and job is only one source of income.According to a data 95 percent people aren't getting ahead financially they are just getting by. Among the remaining 5 percent only 1 percent have true wealth.
This makes one thing very clear we are copycats. We copy each other. In school we learn to read and write by copying letters. We copy the language we speak, the food we eat, the way we walk, and the way we dress. But why we have not found a way to copycat creating wealth.?
The answer is we copycat the job track instead of wealth creation track. Most people assume that a job is the only way to financial freedom.They don't believe there are other sources of income or they don't think they are capable of creating wealth by working ouside the job routine.
Job creates temporary income instead of true wealth. True wealth is having enough money and time to do what you want and when you want. Bill gates has created true wealth and not just income. In one word true wealth is freedom.
Time is the most important thing for all of us. A Chinese proverb says it best. Better to throw all of your fortune down a deep well than to squander one moment of time. The top professionals such as Engineer or lawyer makes lot of money. But are they creating wealth? The simple answer is no. They trade time for making money, They are locked into their jobs. They are creating income but not wealth.With income creation 10 hours of work equals 10 hours of pay,
Whereas wealth creation is based on the concept of leverage.
Leverage is putting your money and time to work for you, with leverage 10 hours of work equals 100 hours of pay or even 1000. Leverage is all about utilizing one’s time effectively. Whether a person is a billionaire or a beggar we all have access to same amount of time. 24 hours in a day, 168 hours in a week and 8064 hours in a year.
Let us take an example of highly paid professional such as engineer and a Ceo of a company.
An engineer follows 50/50/50/50 rule, He works 50 hours a week, for 50 weeks in a year, for 50 years,and retires on 50 percent. This is a clear example of linear growth. The math to linear growth is simple
H(hourly wage) * N( no. of hours) = Income(I)
In layman’s term that means you get what you put in, nothing more and nothing less.
On the other hand ceo of a company leverages his time and talents through his employees. He doesn’t earns 100 percent from his single effort but little bit from the efforts of a whole bunch of people.
This is it leverage is the way to create wealth. But we all can’t become the ceo of a company. As an average person we need other methods to create wealth. The best part is today we have different methods to use leverage.
Leverage through franchising: the key to become a successful franchisor is to develop a successful system and then record what needs to be done in detail, so that the model can be taught to somebody else.
The pefect example of franchising is Mcdonalds. You go to any part of the world Mcdonalds logo, design, and French fries are same.
Another method of leverging is compounding. Once Albert Einstein said compounding is the 8th wonder of the world. Compounding is the wealth creation principle on which share market and banking industry runs.With help of compounding you can turn your meager savings into small fortunes.compounding gives rise to exponential growth. Exponential growth works on doubling concept. Exponential growth enables the money to grow in multiples instead of growing in a measured step by step process
Warren buffett one of the worlds richest men is the classic example of how you can use compounding to build a fortune.
There is another affordable, duplicate concept that combines franchising with exponential growth its called network marketing.
The networking company supports its distributors by offering quality products,marketing techniques and educational materials. Your success depends on you ability to duplicate.
Lets assume you are a network marketer you taught your skills to six independent distributors. Now each of these six distributors taught the skills to other six distributors and so on down the line . This will lead to exponential growth. You will be part of any profit earned in your downline.
Companies such as Amway and forever living use network marketing techniques to sell their products.
To sum up Job is the way to create income but not wealth. Leverage is the way to create wealth.
watch the video:
How To Get Rich ? | Copycat Marketing 101 by Burke Hedges | Animated Book Summary