When individuals are looking at how to obtain the “American dream” in a legal manner, they are left with two ways to achieve their goals. They can either choose the linear method of earning income for success or the leverage method. Both will be analyzed to allow an informed choice for future endeavors.
- Linear Income – meaning you go through school obtain a trade or profession and then you walk the streets looking for someone to pay you for services rendered (employ means to use)… that is called employment. Where an individual or organization (employer) decided to employ you (utilizing your knowledge, skills and abilities) to further their organization. In the business world there is a term used called ROI meaning what can an employer receive from using their assets (employees) to continue to allow them to build wealth, market share and name recognition based on your efforts.
When you work for someone else as an employee your employer has what is called leverage on your time. They have to buy you at $48000 per year and sell you at 54000 per year. The corporation, the franchise, restaurant, whatever the entity/business is they have to make money on you. You only get paid for the time that you are physically on the clock barring sick leave and vacation time. So the majority of your pay 95% of your effort comes from the amount of time that you can spend in your employers facility. When you do not work, your income stops and only starts again when you punch the clock.
Ever wonder why the owners or CEOs of the company makes so much more than their average employee, even when they do none of the day-to-day work that makes the company profitable? Well they are the employer, they put up the initial capital, meaning they are taking all of the risk and in doing so deserve more of the reward for success of the business venture. While you, the employee is just excited that you have a job, being used for your KSA’s. Usually you will not live in the same community as the owner, nor will you be able to afford the same level of lifestyle no matter how much you give of yourself to the company. The reason being is that you will only be making the company more valuable and that is being an honorable employee. You will receive raises and maybe even bonuses for your effort but you will only be paid as long as you continue to show up for work as a loyal employee. (Pay for performance)
The majority of Americans are in this boat because this is what our education and society has pushed on us from parents to the school system… everyone tells you what it will take to one day get a “good” paying job.
Most conversations start off with; “so what do you do for a living” this is probably second only to a conversation regarding the weather. What you are being asked is in a few words describe your value to society so we can make a judgment on whether are not you are successful. Now most people do not mean any harm by this, it is just the way we have been programmed.
In the past 4- 6 years we have seen groups pop up around the country talking about wanting to take more money from the rich because their feelings are; either the rich person has done something dishonest to obtain their wealth are that they somehow are cheating the poor to retain their wealth so for those reasons, they somehow do not deserve their money so stealing (exorbitant taxes) from them should be acceptable.
So instead of finding out why and how the rich play by different rules, we demonize them. Let me explain, very rich people play by a different set of rules. They do not go to school looking to become a good employee stay with the company 30 years and receive a gold watch. They are playing by the rules of leverage and commerce.
- Leveraged Income – meaning, just as what most businesses do, they find a discounted method of purchasing goods or services and then they mark them up to sell to the consumer. This is what is happening every time you go buy anything. No one is selling you something at their cost are they could not stay in business. They could not hire employees and pay their salary without markups. This is not new to any consumer but most consumers believe that they have no way of getting into that boat. We as consumers are fighting against to many obstacles in our minds. First we were trained to be good students and then good employees. Secondly our parents told us that getting that good job would secure our future, well ask the millions of Americans who lost their good jobs and are now working 2 and 3 just to make their ends meet. Would not they like to be operating on leveraged income strategies now?
Leverage income means that you place yourself in commerce and start by finding a business that you can own/ run. Many folks who understand this concept started doing things like opening up a store on an auction site hoping to build up customers and find a niche where they could solve the needs of their customers. Stay at home moms started selling kids clothes or custom jewelry that they put together and some people have been truly successful in this endeavor to the point where they no longer have to have hands on in the process. Now their items are being massed produced and shipped from a distribution center instead of from their Livingrooms. They now have leveraged income based on buying the materials low and then employing others to put them together and ship them from online web based orders.
Another trend that started to grow exponentially in the 80’s is called MLM mid-level marketing to friends and neighbors a product that they believe would help them clean better, smell better, look better or various products that have permeated our society through the homebased business model. This method of linear income requires diligent work upfront to build a base of customers and to give the opportunity for others who see the value of working with leveraged income to one day switch boats from only getting paid when they are on the clock to now being able to make income even when they are sleep.
Network Marketing has become a method used by many to achieve their financial freedom. This allows for individuals to build teams of individual marketers, each working to fulfill their own level of financial independence.
In a typical network marketing organization you are encouraged to build a network of distributors who have the same opportunity as you to make the same or even more money than you. Therefore, not everyone at the top necessarily makes the most money. This is a marketing system where you can start from the bottom and go to the top and become a top achiever within a company by building your own business.
So how do you make your money?
You can make money in two ways where 1 is small business and 2 is the big business model.
What is the maximum amount of time you could possibly work in a week? If you worked six days a week for 24 hours a day you would achieve 144hrs of productive work. If you had 50 distributors in your organization all working part time for 7 hours a week you would have 350hrs of productivity going into your business every week. That is 206hrs more than you could achieve working six days a week 24hrs a day. The idea is that teamwork makes the dream work. This is something that the very rich truly understand. They all work in leveraged income.
So in conclusion what manner of income are you working in? What goals do you have that you can achieve if your income potential was not limited to just your efforts. There is no rich person who is staying or growing their riches based solely on their efforts. The rich understand that the way to financial independence is to be working in leveraged income streams. What will you do?