It amazes me how many people in this world work two or even three jobs to get ahead and save a little for the future. Unfortunately, this is probably the slowest active path to wealth and financial freedom.
Trading hours for dollars does produce immediate results though, and it’s usually pretty easy to obtain (debatable in today’s economy), which is one of many reasons why many people tend to gravitate towards this solution.
The thing is, an hourly job is simply not going to substantially increase your income, and you’ll likely burn out before accumulating any real savings. There is only one of you, and only 24 hours in the day, so your income has limited potential with this model. I mean, you do need to sleep and enjoy yourself a little right?
But what if there is a better way? Is it possible to make extra money on the side while also building a valuable asset that can someday be your sole source of income? Of course there is! And I will explain how below.
Before we get to the business models, first let’s discuss scale. Once you understand this powerful concept your outlook on your job and business will be very different. This is the exact reason why entrepreneurship is so powerful and working for someone else is so limited. When it comes to business models, those that are highly scalable at a low cost are in high demand. Some examples include internet based businesses and technology companies. Any business can be scaled though. A restaurant can open new locations, a website can increase its visitors, and a manufacturer can get new customers. It’s really just the ability to grow.
Let’s look at an example.
Suppose that Joe the Vendor has a route of 50 vending machines all making $100 a month profit each. He services the machines once a week, taking 20 hours per week, with a total income of $5,000 a month.
Now, let’s assume that Joe doubles his business and adds 50 more machines to his route which are also making $100 a month each. He also services these machines once a week. His total income has just increased to $10,000 a month. He has just scaled his business by a factor of two with his investment in these additional machines.
After another year, Joe the Vendor is itching to grow his business even more. After all, he’s mastered the route and needs a new challenge. However, he knows he can’t put any more hours in so he decides to make an investment in 100 more machines and a service person to manage the route who he will pay $5000 a month. Assuming this route makes a similar income to his other 100 machine route, Joe has just added $10,000 in income. Take away the $5000 paid to his service person and he’s $5,000 a month ahead. Joe has just scaled his business again and leveraged his resources to make $5k more per month working similar hours. Plus, he has the option to do this again, or otherwise grow his business, by investing in people or equipment that make more money for him and his family at his own discretion. Beats waiting for your boss to give you a raise any day in my book.
Owning Your Own Business is a Fantastic Path to Wealth and Financial Freedom
You see, Joe the Vendor stared out part time, and then scaled his business up over time to a point where he was making more than he ever though imaginable at a 9-5. And he’s just getting started. Adding a few more routes and service people to his payroll over the next few years will substantially increase his earnings by a factors of 2 or 3. Try doing that working for someone else. Plus he can do it on his own terms and at his own pace.
Now mind you, there are plenty of reasons not to start a business right? It’s too risky. It’s hard work. You don’t have any capital. Don’t know where to start. Really though? When has equivocation and self doubt lead anyone to success? Focus on your goals and you will achieve them, and a positive attitude along the way will make it a LOT easier.