On the other side, Businesses (B) with >900 people and Investors (I), they make up only 5% of the populations, but own 95% of the world’s wealth (!). This is possible because they don’t exchange time for money. Instead, their assets continue to generate income and wealth long after they complete the work that created it, irrespective of them being there or not. Assets create wealth. Examples of these assets are employees (who work for them), properties that is rented for income, franchises that you earn royalties and money invested with returns. This income is called residual or passive income. They enjoy time and financial freedom. However, they require very high capital and also very high risk over a long period of time (>10 years). Are you able to get into these two quadrants?
Exponential growth vs. linear growth accelerates your income creation. How? Consider this scenario. If the income you generate is a direct relationship with the time you put in working, then that is a linear growth (e.g. monthly salary). For example, $100 per day, for 30 days is $3000. However, if that relationship multiplies (e.g. every hour you put in, generates twice the income you get) you have exponential growth. For example, if you start with just $0.02 and double it every day for 30 days, you would have $10Million (vs. $3000)! This power of exponential growth is explosive.
Can you duplicate yourself sufficiently enough that you can have more time for yourself? This is very critical to understanding wealth creation. We do not have enough time in a day to do all the things we want to do. If we had more of ourselves, we could then do everything. Duplication than is essential. Similarly, if you could train 10 of you to do your work, you could then stay at home and spend time with your family while still creating more income (from the other 10 of you). Duplication requires a good system to copy from and paste to.
Why is McDonalds or Starbucks so successful? Other than delivering quality products, the way they are setup is virtually identical. This is because they have a proven business system that makes it simple to understand, operate and duplicate. Another word for a duplication business system is franchising.
Franchising offers an off the shelf proven system for a qualified person to purchase, operate and create income. The price of owning this duplication business system can be USD100K to USD500K with monthly royalty fees of USD2K – USD10K (or 20-50%). Although, franchising is a great way to duplicate from and create income. The franchising and royalty fees are very high for most to participate.
Clearly it can be seen that owning your own business is the right thing to do. However, every business person knows that if a business has a very low cost or overhead and the income keeps growing and is unlimited, than you have an ideal business. Who wouldn’t want their business to have low expenses while revenue keeps growing? In our rapidly changing economic and business environment cost savings or cost cutting has become vital to the survival of businesses where profits are squeezed with stiff competition and suicidal price wars. There must be a better way...