Okay, welcome back. So in my last video I shared with you five widely held but false personal beliefs and ideas about money that will keep you stuck financially. I strongly believe that those myths are just some of the many that are constantly working against us to undermine our financial dreams, especially if you want to reach big financial goals and be able to take care of yourself without making compromises.
For example, have you ever felt guilty for wanting to earn a lot more from your job, say $250,000 a year, or $500,000 a year, or even millions of dollars per year?
It's kind of hard not to feel guilty about wanting to earn more, when monster.com or some other job site tells you what certain salaries are for certain job roles, or when 95 out of a hundred people that you meet, or things you read, basically give you mediocre advice about finances.
Don't settle.
It's pretty clear that certain roles have a widely accepted marketplace value and that most people just go with it. But that doesn't mean that you need to accept predefined salaries as the universal truth or even as a gauge for valuing your own self worth because you can leverage your skills and you can go after not only what you want to earn, but more likely the amount that you really need to earn to succeed financially for the long term.
It does take some work and you'll never stop studying and learning new skills, and you'll probably need to create a plan where you get very specific about the lifestyle that you want.
You'll need to know exactly what that desired lifestyle is going to cost. And then you'll need to get specific about what type of career or business opportunities are going to enable you to create the income to pay for that lifestyle. And the truth is, it's highly likely that you'll need to earn much more than you currently think you do.
For example, as a husband and a father of two growing sons, my realization became that I needed to earn at least $60,000 USD a year just to get by and live frugally in the United States, and I would need to be earning about $120,000 a year to get myself into trouble with a couple of car payments and a small mortgage payment. At $250,000 a year I could actually start feeling comfortable where I could pay off debts, take a nice vacation or two each year, and add a decent amount to my retirement fund each year.
At $500,000 a year, I don't think I would feel any more comfortable than I would at $250,000 a year. As long as I didn't upgrade my lifestyle or get a big house and brand new cars, I could focus on investing more aggressively. However, trying to save enough money for 25 to 30 years in retirement to maintain that same income would definitely be a challenge.
My current conclusion is that a minimum income of 2 million USD a year (or more) seems to really be the amount needed to not only create a dream lifestyle, but to also be able to fast track to retirement and continue to enjoy a dream lifestyle. This number does not include asset growth, or increasing the valuation of a business.
Sources of Income
Let's change it up for a moment because the average millionaire has seven sources of income, and they usually don't make it all from one service or one product or one job. This should encourage you to begin thinking of how you can create additional income streams from your current skills. For example, even if you have a job, think about how can you package those skills up as a product to maybe sell on the side.
Our goal should be to tap into opportunities that would enable us to add an additional income stream of $60,000 or even a $100,000 per year or more, and then either continue to grow that income or expand into additional income streams by learning additional skills.
The fact is that most careers or jobs alone won't ever pay you $500,000 a year. That's why I shared that you cannot really depend on anyone else such as an employer or a college degree. Because alone, college and jobs are not the solution, and succeeding financially is going to ultimately be your own responsibility.
And even though $500,000 a year jobs, they exist, they are rare and they are competitive. These are jobs that have titles such as CEO, Real estate broker, high end sales. Others may be doctors or surgeons. There is finance, there's attorneys or politicians. But the drawback is that these careers require years and years of dedication and highly specialized, expensive training.
Other $500,000 a year career options that exist for maybe a self-directed or risk averse person would be something like, Starting your own business, offering high value consulting or inventing something unique and valuable. You could also become a professional investor, a bestselling author, or even leading a high value project as a project manager by putting the right people together.
I think some obvious choices to learn about are going to be sales, marketing, productized services, digital products, software, investing in the stock market and real estate, or even buying small businesses.
To stop making compromises, you will need to start taking action and begin creating habits like lifelong learning practices, networking, understand cash flow and how to create opportunities.
Get focused
But the biggest, biggest killer of all this is going to be distractions, so we usually need to stop doing certain things like procrastinating or searching the internet and scrolling through social media feeds all day for answers or fulfillment.
And we should probably also stop hanging around people who are not where we want to be and maybe start hanging around people who are where we want to be financially. Finding good mentors is the key.
And also realize that most of the stuff we do, does not really help to make us more money. So it's really important to stop trading time for money or our income will be severely limited.
Understand Value
Something else to understand if you wanna succeed financially without making compromises is the concept of value.
For example, how will you provide value to others?
What exactly do people value?
Many business people simply look at value in a linear fashion, such as multiplying the amount they have invested in your services by some factor of X, like let's just say 10 x and maybe someone purchases your course or software for $3,000 and they're able to save $30,000 in time on a process they previously did wrong.
Or maybe by implementing your system it generates them an extra $30,000 in revenue with no extra advertising costs and minimal work. This is considered quantitative value, and it's usually easier to measure simply because we just look at numbers such as resulting revenue, profit, or measurable savings from our involvement divided by the cost.
Another form of value is qualitative value, where maybe our customers experience a perceived value over product, service, or skillset. This could be increased trust, how they feel about themselves, more confidence in their abilities, happiness, more energy, decreased pain, perceived time savings, maybe less frustration, less stress, and so on.
So qualitative value can be harder to measure because it can change depending on who you are working with, what their beliefs are, maybe what their mood is at any given time. Maybe it's something you say or do, how you smell, and so on. For example, some people may be willing to pay you more for services simply because they like you or they trust you, or you have a good reputation or you've been recommended by one of their friends.
So again, the best way to earn more money without making compromises is to maximize both the quantitative and qualitative value that you provide. Those you work with make it easy for them to understand the value or that you're giving them, and if it benefits them, they will often gladly pay you what you ask.
For example, if you wanted to go from $50,000 a year, To $500,000 a year, how could you 10 x the value you provide or collectively increase your client's revenue so you could earn $500,000 or more a year? What can you do to increase their trust and confidence in you so that they're willing to pay you more?
It's an easy concept to understand, but it's difficult to master and put into practice. Sometimes the two work together and sometimes they clash. It just depends on the circumstance and the characters involved.
Keep Learning
I've gone on longer than anticipated, so let me just wrap this up. It takes more than we've been told it would to succeed financially, and sometimes we just need to seek out more knowledge and training.
We also want to get this right for a number of reasons, obviously, so that we can live a good life and not make compromises. But also because if our economics are right and in alignment, then we can take care of things, we can help others, and we can serve our clients and our customers.
However, if our personal economics are out of whack, then we basically just pay more for everything. Life's harder. We become scared, can be selfish and probably won't be able to help anybody else effectively.
As you can see, I've presented quite a few challenges here to overcome, and in the upcoming webinar I'll be sharing four simple steps for getting a grip on your time and establishing exciting personal financial goals.
Please be sure to register.
I'll look forward to sharing, more of my story and my lessons with you.
