The three steps to creating lasting wealth, Part two
Hey Rich Asian™ fans,
My name is Adam McClary, and I am a High Ticket Closer with one of Dan Lok’s Closing teams led by Joel Goh. As a Closer I love to talk about wealth and building wealth for future generations. Today we are going to take a look at the second half of Dan Lok’s wealth triangle. Enjoy!
So if you read my first article, you will remember that we talked about how to support yourself with a skill instead of a job. This is important because once you can step away from a job and work only for results (instead of trading your time for money), you are free to be creative with your time and money. So let’s take a look at the second side of the triangle. What do you do once you are making alright money?
Side two: High Return Investments
So now that you are making more money than you ever had in your life, what is next? Investing it wisely so you can have a solid plan for you future. So you can eventually support yourself from your investments and work when you want to instead of having to work to survive day to day.
The amount will be different for everyone, but some will invest 10%, 25% or even 50% of their income every year and put it into High Return Investments.
There are many investments that return higher than the stock market, but again they all take education to understand. Some of you will take the time to learn how to invest in real estate intelligently…
You will learn the ups and downs of different strategies such as fix and flips, wholesaling, or tax liens papers. Once you find a strategy, being able to invest in something that will return value with significant R.O.I will allow you to grow your wealth. It pays to intelligently learn a strategy that will allow you to grow your portfolio year after year.
Let’s say you are a high income photographer. You are now doing 2-3 shoots a week and are making 100-150k a year. Now you just need to decide what percentage of this you will invest and what rate you need to return to hit your target freedom date. Get a great year with returns of 20-30% and retire comfortably in a short time between 5 to 15 years. Once you are free and “retired”, you can now live a life of impact instead of a life of desperation.
For some people, this is the furthest they will ever go on the wealth triangle. If you are diligent about buying investments that will appreciate in value or that will return you income through rent, your income will be hedged against loss and you will eventually make more money from your investments than from your daily labor. This is a beautiful spot to be. For some people though, they want more than just living expenses covered. They want to have greater impact. For these people, the third side of the triangle becomes incredibly important and helpful.
Side three: Scalable business
Let’s say you wanted to be wealthy and have massive impact on the world. In order to disrupt an industry or leave a legacy, what do you need to do? Get involved in scalable businesses. Once you know that you can support yourself with your skills, you are free from the stress of having to make businesses work perfectly day in and out.
The reason that scalable businesses are the last consideration is because businesses are stressful and difficult all on it’s own. Now if you add desperation to the mix, you have a deadly cocktail. A term that is important to understand in any business is your daily income goal. This is referred to as a DIG. If you are not hitting your DIG with your high income skill, it is NOT time to jump into scalable businesses.
So what are scalable businesses? Well online businesses are a good example, if you are selling a product or service, all you need to do to make more income is make more sales. As you scale, you need to make sure you are making generous margins on your product or service so that you still would have a marketing budget.
Then you need to get in front of more people. In order to accomplish this you can work with funnel builders, copywriters and social media marketers to come up with a compelling offer, upsells and unique selling propositions. Then as long as your cost per click is at an appropriate ratio, all that is left to do is spend money on advertising. The more you spend on advertising, the more you will sell.
Another option is the service based business. It’s really anything that allows you to grow constantly and leverage other people's time and money. Pick your yearly income goals and see what businesses you need to be involved in to make it a reality.
What are the margins? how many sales do I need to make to hit my DIG?
Know what your goal is and what it will take in sales to hit the goal. All that is left is to run the numbers and to understand what sort of growth needs to happen in your business to hit your DIG. If you find that your goals will require more than 20% growth within your business, then you may need to look at acquiring another complimentary business instead of simply relying on your own company to grow to the size you require.
Mergers and Acquisitions will become a skill in of itself. Over the following ten years, the most active demographic in the small business sector are the Baby boomers because they’re starting to retire. This will open up many opportunities for Leverage Buyouts know as LBOs and for other unique opportunities of getting started in business without having to start your own operation from scratch.
I hope this helps you as you decide what you are going to do to achieve your income dreams. I look forward to hearing from you on what you have decided to do today, to support yourself not only today, but next week and next year.