The year has already been one of success. Recently, I had time to sit back and reflect on some of the basic principles that I’ve always strove to follow. They aren’t from any one book or person, but rather a collection of things I overheard, events I witnessed, stories I listened to. And in my recollection, I thought it would be wise to write it down — and now, share it. There are far more than three principles that I deem important, but for the sake of detail and to maintain the integrity of post length, I’ll segment them into a few more posts down the road.
Build Assets, Not Liabilities.
I can’t claim credit for discovering this simple principle, as it is borrowed from a chapter of Robert Kiyosaki’s best-selling book, “Rich Dad, Poor Dad”. At first, it doesn’t actually sound that informative or effective. But after it is explained, it can transform the way you look at your future, and in turn, how you plan for it. The way that I’ve always explained it, and the way that it was explained to me, was in the form of a table, so I will lay it out much the same way.
As you can see, what separates a “rich man” from a “poor man” is that the rich man makes money work for him. He doesn’t look at the short term, but the long, and finds comfort knowing that he can turn every dollar into two. Assets are wealth-generating machines. I, for example, own stake in a book ministry that generates a modest, but respectable amount of extra income. I subcontract work out to companies that need my assistance, all while managing Ideas and Pixels. Every few weeks one of my real estate clients will ask me to photograph a half-million dollar home, and I always oblige. The rich man accepts money from any source that he can, but he also manages his time and efforts to make his time spent truly effective.
Don’t Fall Into The 80/20 Ditch.
If you’ve never heard of the 80/20 rule — the Pareto Rule — here’s the gist: 20 percent of your clients take up 80 percent of your time. It almost always happens. Maybe it’s happening to you right now. A few needy clients can lead to a shift in resources from your default role in whatever you do, to that of a support assistant.
It’s important to communicate to clients that while you’re there for them, you can’t hold their hand after the main transaction or service has been completed. You can, however, assume the role of training wheels — there for support when your customer sways or needs true assistance. They will understand, and this will quickly erase any chances of future resentment in the relationship, which is never productive for a business relationship.
Make Money While You Sleep.
And I don’t mean like those gimmicks that you get spammed with in your email or on Facebook. I first learned of this concept from my father — a union lobbyist and the author of one great read on union organization — who, upon learning of my newly founded interests in being an entrepreneur sat me down to explain that “all of the great business men, the one’s to whom wealth is no longer a thought, know that you are never truly well off until you generate money while you’re eyes are closed.”
It was a dream concept — who wouldn’t want to make money for just laying in bed? He explained further, “But it’s not as easy as it sounds. It involves a lot of work from the get-go. But you just have to look for opportunities that will generate a little bit of money over a long period of time. Then get ten vehicles that can do that, and now you’re making a lot of money over a long period of time.” He smiled, “That is financial independence.” These vehicles come in the usual forms. 401k’s, IRA’s, stocks. Investment properties, renting out a spare bedroom.
Hone your mind to seek opportunity, and opportunity will soon learn to seek you.