A couple of years ago, I stopped in at a new coffee shop that had opened in my town in California. It looked super cool, and I was hoping they served acai bowls.
Sadly, the coffee shop didn’t have them. But a guy in line heard me asking, and he approached me. He told me he and his wife were planning to open a health food restaurant, and they would have great acai bowls.
I was super excited to hear it! We exchanged contact info, and eventually, I met with them to talk about possibly helping out with funding.
Now, if I’m going to be involved in something, I want to know who I’m dealing with – their “why”, their purpose, and if their purpose is the right fit for them. So I asked them some basic questions about their goals.
They told me creating wealth was extremely important to them. She was a business coach, and he was a mortgage broker. They were both doing well – and earned about $100 grand each, each year. They worked for themselves, meaning they ran their businesses and provided the services.
Now for a lot of people, this sounds like a dream, yes or yes? They both had six-figure incomes working for themselves.
But here’s the thing – even at $200,000, they were barely making a living! Building wealth wasn’t even a remote possibility. They had 3 kids headed for college, they paid a lot in taxes and for their mortgage, and with what was left, they couldn’t do or have the things they wanted.
So here’s a question: are you in a situation where, in order to earn an income, you have to be involved? That could mean either working a job or having your own business like this couple.
If you said yes, that sucks.
And not because it’s inherently bad. It sucks IF one of your primary goals is to create wealth.
The number one rule for wealth is: there are no limits on your income. But your time and energy do have limits, so if your income depends on them, it’s limited too!
If you’re trying to get rich like this, it’s like you’re playing tennis on a soccer field! You’re not even on the right court!
If you want to win at tennis, you need to be on a tennis court, and if you want to create wealth, you have to be on a wealth court. Whatever you want to achieve, you need to be in the right place for the game you’re intending to play.
To explain this, let’s look at what it takes to achieve the different levels of wealth.
The Three Levels Of Wealth And How To Achieve Them
To create financial success, the first step is to get clear on what you want.
There’s no right or wrong answer, but you should know what you want and what you’re choosing. So to make this super simple, I’ve defined 3 basic categories for you: 1) earning a living, 2) financial freedom, and 3) building wealth.
I focus on numbers 2 and 3 with my students. Number one is fine for a lot of people, but if that’s what you’re aiming for, I’m not the best teacher for you. I’m just including it here so you can understand the difference.
So let’s look at each of these.
Earning a Living
If you have a decent income and you save some of it, you can have a decent living. If you don’t save any of it, you’re not going to have a decent living. You’re always gonna be living in fear and stressing about money because you won’t have any…since you already spent all of it!
I don’t care whether you earn $100,000 or $500,000. If you spend it all, you will live in fear and stress and die of a freakin’ heart attack. So a decent living is the minimum you should be aiming for.
Then the next stage is financial freedom.
Does financial freedom mean you’re rich? It can, but not necessarily.
Is freedom good? Yes, I think freedom is really good, and that’s why in our programs we teach you to become financially free at Level 1. Freedom comes before rich.
Here’s what I mean. For the first time now, you have another element – another workhorse – working for you, and that is what? Money. Your money is generating more money for you.
This is about adding to your living with investments.
Now you might say, “I don’t have a lot of money, so how could that work?” You need to start. That’s why you have to have a financial freedom account. It’s easy to start an investment plan with just 10% of all your income going into that account.
You’re going to start like everybody else with $100. Eventually, it will be $200. Then it will be $500, and then $1,000. You start where you start, and eventually, your money is producing enough new money to cover all your needs and wants. That’s freedom.
Now let’s talk about building wealth and getting rich. First, let’s get on the same page about what “rich” means.
In general terms, I’m going to start “rich” at a minimum of $5 million in net worth. That’s the starting point of rich.
So now how do we get to rich? Well, the number one rule for building wealth is: there are no limits on your income.
One way is if you can build up enough financial freedom elements, that can lead to getting rich over time. But there’s a faster way.
And that is to have a vehicle that has the possibility of creating wealth – it has to create some serious income. I’m talking about a business. But not just any business, a wealth-generating business. If you have to be there in order for your income to happen, you do not own a wealth-generating business.
For a lot of people, if you’re not in a job, and you “own your own business” like the couple I mentioned at the beginning, here’s what’s happening…
You own a job. It’s called a “personal service business”, but it’s a job with you as the boss. And that can be the worst boss you can possibly have because you never get away from them!
For a business to make you rich, you have to ask, “Will this vehicle allow me to leverage, systemize, and get out of here…and still deliver the value through other people, other technologies, and other means?”
The value must be delivered, and the problem must be solved for the clients, but not by you.
Now does it start like that? No. Usually, at first, you have to be the one who does every freakin’ thing in the business, yes or yes?
But if you want to build wealth, you need to be looking beyond that stage and taking steps to remove yourself as soon as possible. When you have a business that generates a lot of money without your involvement, then you can get rich!
Know What You Want And Get In The Right Position
Now, I don’t tell everyone, “You have to be wealthy.”
You just need to know what you want in your life. If you want to create wealth, this is what you need to do. You need to run the freakin’ show and then hand it off. And no matter what you want, you need to be real with yourself and take charge of the steering wheel of your life.
Going back to my lunch conversation with the would-be restaurant owners, it was frustrating for me to hear these two wonderful, beautiful human beings who are hard workers, describing the road they were on, which would NOT lead to wealth. Yet they were saying, “We want wealth.”
I told them, “You can be financially free, but you’re not going to get rich. I’m sorry to have to be the one to break the news to you, but it’s better you find out now than in 20 freakin’ years doing the same freakin’ thing.”
And not only would their service businesses not make them rich, but if they tried to add in the restaurant, their energies would end up being too scattered, and they could struggle even more just to earn a living. I know, because that’s what I did for years.
I told them that to be successful you have to focus 100% or it’s not gonna work. And that if you are going to focus that amount of energy, it better be something that you really want to put your heart and soul into.
They went back with that advice and came to a decision that the restaurant wasn’t really what they wanted to do. They had just thought it was a good opportunity.
We’re still friends. He decided to put 100% focus on his mortgage company that he’d turned away from, and last I heard he’s doing extremely well and really enjoying it. And she really loves coaching.
They’re earning a great living and moving toward financial freedom. And they’re already more free internally because they’re focused on doing what they love. If they decide at some point they want to grow their businesses into wealth-building vehicles, they can do it. But by getting clear on what they valued most, they were able to get on the best playing field for that.
Remember, if you want to win at tennis, you need to get on a tennis court.
And if you truly want to create wealth, and you’re willing to do whatever it takes, you have to get on a wealth court. AND, you have to get yourself into the right position. Can you guess where that is?
The wealth position is on the SIDELINE of your own court, letting others play the game!
Okay, your turn. What do you want for your financial life, and how are you creating that for yourself? Share in the comments!
For Your Freedom,