Your earning potential is almost always linear.
People like you and I are often stuck in a linear function of earning. We go to work and are paid a salary.
Just like a function of your time. Unless you do something about it.
You can break out of it.
You work 37.5 hours a week (or more, or less) and get paid something (E) in lieu of your time (T)
E = f(T)
Say you earn £24,000 working 37.5 hours a week:
£24,000 = 37.5*48*h
The only way of increasing E is by working more. Working longer & harder.
You could be paid a bazillion dollars per hour (h). But if you never worked (T=0) you’d earn nothing.
a bazillion dollars times zero is still zero
Your salaried earning potential is a function of your time.
A linear function. An endless straight line into infinity.
In business, linear functions are a thing to beat.
Subscription based product companies are valuable as their earnings potential are a superlinear function when compared to their output. Googles revenue potential from advertising isn’t a function of the output of their employees. It’s more. It’s superlinear.
How can you escape this linear function you are trapped in? How can you become superlinear?
You need ways of earning money without your time being the force behind the earnings.
Do you have some savings? If not, build some.
If you have some savings your earning potential function now starts to look like this:
E = F(T) + F(Savings)
You are now beating a function of your time. Your earning potential is now a function of your time and your savings. The absolute value of F(Savings) might be tiny but you are starting to become superlinear.
But could you do better? The more ways you can find of earning money without exerting your own time the better.
Savings & Investments are the bees-knees as they consume so little of your time.
Let’s wind forward. You now have some savings, investments, and property.
E = F(T) + F(Savings) + F(Investments) + F(Property)
E is starting to look better now. But could you improve?
Could create something? Something that earns without it being a function of your time. Spend some energy upfront then watch it earn?
- You could write a book, and then each sale of the book you earn some royalties. You could self publish and earn all the revenue.
- You could write some music and then license it.
- You could create a design, and sell the design using a print-as-a-service site.
- You could take a photo, and license it on a stock photo site.
Create something of value and then license it in a way that isn’t a function of your time.
E = F(T) + F(Savings) + F(Investments) + F(Property) + F(Royalties)
Your earning potential is now well and truly superlinear. Add in compounding and you are a superlinear superpower.
This post is a Medium exclusive by moneymage
Sources & Attribution
- Lady Watch © Nestor Galina, CC-BY