If You Want To Be Rich, Stop Focusing On Your Salary (Do This Instead)
How do the rich get richer?
Over the past four months I’ve gained a newfound understanding of self-worth.
I used to break down my money into two categories; salary and savings. The process was very simple. To make an income, I provided my time and skills in exchange for money. I would then keep a percentage of my bi-weekly paycheck for myself and put the rest of it into a savings account.
The truth is, that this is how you make good money. It’s not how you make great money.
In his New York Times bestseller The 4-Hour Workweek, Tim Ferriss explains why being the second-lowest paid person at his company persuaded him to start BrainQUICKEN LLC on the side and slowly build it up. This venture turned his 40k per year into 40k per month.
Had Ferris stayed complacent with his single source of revenue, and focused all of his energy on climbing the corporate ladder, he never would have become the entrepreneurial icon we know today.
The key to making more starts with a higher level understanding of wealth, and the two different ways we define income.
is active income. This is your full-time salaried or part-time hourly job. It also umbrellas side hustles like freelance work, Uber driving, Fiverr gigs, etc. It is the process of trading your time for money.
is passive income. These are earnings that may not require as much hands on work, including investing, real estate, e-commerce, royalties, etc. This allows you to have some financial flexibility outside of your 9–5, without having to necessarily be present to reap the benefits.
The Secret To Financial Success Is..
understanding how to build up multiple revenue streams combining both active and passive income.
A lot of people settle on their career salary, or sit on it for a decade before making a move. If your ambition is to be average, then that mindset is fine. But to be in the top tier of wealth, you need to start figuring out different ways to make money simultaneously.
Right now I am operating on 4 income streams:
- Full-Time Marketing job
- Medium Partner Program
- Freelance Writing
- Savings Investments
By the end of 2020 I hope to have added at least 4 of the following to that list:
- Personal training
- Paid surveys
- Business or real estate investing
- Robo adviser investing (Betterment, Acorns)
- Book sales
- Ghost writing
- Educational webinars
On their own, these income sources are good, but rather modest. When combined, they elevate me to a different level of success.
Ashton Kutcher is a great example. You may know him as the famous film/television star. He’s had a respectable career and made a lot of money. But even if he never received another movie role again, Kutcher would still be wealthier than 99% of the world due to his diversified portfolio of revenue streams. Since the early 2000’s he’s owned a production company, invested in tech startups, and formed a venture capital firm.
Wealth is more than money. It is a series of learned strategies and behaviors.
“If we command our wealth, we shall be free; if our wealth commands us, we are poor indeed”- Edmund Burke
This process won’t happen overnight. I’m sure most people reading this don’t have more than a few income streams yet.
If you do, fantastic. You’re already on the path to a wealthier future.
If not, don’t panic.
Even if you only have one that’s fine. Your goal should be to get the ball rolling on researching the opportunities that exist out there to make more money.
Start with something easy like investing a small percentage of your paycheck. Over time you can build out different income streams until your side earnings are matching your salary. Then push for more.