Wealthy and/or Rich
The rich can buy a life of luxury and have the ability to spend lots of money now. However, a wealthy person has the freedom to do whatever they want because they have accumulated assets that earns money for the coming future.
Rich people have a high income without corresponding assets. Wealthy people have assets accumulated that earns money now and for the future.
A rich person owns a big home, drives a luxury car, and buys expensive clothes. But a rich person might still work for someone, a company, that controls their income -- a salary, investments that rely on the economics of the country.
Some people have gotten so used to the idea that they continue to exhibit those “rich” behaviors even when their personal finances in order -- living paycheck to paycheck or drowning in debt.
Wealth is the value of the assets you own. Wealthy people own assets that earns on their own, investment that stays and grows, and equitues in other entities that earn on their own.
If you choose to be Wealthy, than just being Rich
There’s no secret formula for building wealth. It takes a ton of hard work and time. At the end of the day, it boils down to how much of your time you’re willing to give up to make more money. If you’re able to learn how to make more money while giving up less of your time, you’re learning how to build wealth. There are no shortcuts.
You can grow your wealth by;
- Extra time and money need to be reinvested.
- You can skip ahead, but you still have to learn the lessons from each step.
- Apply your existing skills in a new way to build wealth.
- There’s a difference between working for a better wage and truly building wealth.
- Using an earlier rung on the ladder to fund the next one.
- Moving between ladders often means a decrease in income.
- Each step is easier with an audience.
- It takes longer than you think, but the results can be incredible.
The Ladders of Wealth Creation
Inspired by an article by Nathan Barry, The ladders of wealth creation: a step-by-step roadmap to building wealth.
There’s a reliable progression that anyone can take to earn more and build wealth. In fact, it is like a series of ladders side by side -- each one can climb to different heights in both the quality of business and potential earnings.
Time for Money
The only skills you need are showing up consistently, being reliable, and learning new skills on the job. “Then in order to take the next step up the ladder you will need to specialize in certain skills (design, copywriting, legal, becoming a nurse, etc) to gain a salaried position.
You should always trade your time for money if:
- You’re early in your career and just starting out.
- You’re getting paid to learn a new skill while growing your earning potential.
- It’s a step in getting to a higher rung or on to the next ladder.
- You’re building relationships or finding mentors.
- The work is rewarding and meaningful in its own right.
Your Own Service Business
This next rung on the ladder requires skills such as setting up a company, finding clients, creating proposals, pricing services, hiring employees, establishing an online presence, accounting, finance, business ops, etc.
However, these two are probably the most important -- (i) follow up with customers and (ii) doing what you said you were going to do.
To reach new levels of income you need to learn a different lesson: how to sell without ever talking to the customer. This rung of the ladder requires you to learn how to write quality sales copy, design a sales page, process online payments, and create systems to deliver repeatable quality with each service.
A product takes far more work to create upfront, but then each individual sale and the fulfillment of that sale happens without much (or any) additional effort from the business owner.