Updated: Jan 6, 2020
An intense desire to be rich isn’t enough…
Most people in the world want to be rich. That is the natural way things work. The problem is that most people are unable or unwilling to do what it takes to achieve that. The only difference between people who are rich and the people who are not rich is how hard they are willing to work and the actions they take to achieve that.
Working Harder than Anyone Else My father used to say “There are 24 hours in a day and they are all billable.” He was right. Today the focus is more on “passive income” and “multiple revenue streams” both of which are good ideas, but my father was from a generation, and a mindset where working hard was what it took to be rich. When I started my first company at age 28, I worked 8 hours a day from 8 AM to 4 PM and then took a break for dinner and then worked eight more hours at the company from 5 PM to 2 AM. I would get home at 3 AM and get up at 7 AM and do it all over again. The weekends were fun because I only had to work one 10 hour day at the company. I worked 100 hours per week when most other people were working 40 or less. When you realize that even just making $25 per hour that when you work 5,000 hours a year for five years rather than 2,000 hours per year, you will end up booking 25,000 hours rather than 10,000 hours and make $625,000 rather than $250,000 over that five years. That is nearly 3x what you would have made if you had worked a “normal” job and enjoyed your life. I chose to work hard when I was younger, so I didn’t have to work as hard now. After ten years, I had $1.25M rather than $500,000. Becoming a millionaire was easy, you just have to work your ass off every day for ten years and the younger you start, the easier it is.
Working Smarter than Anyone Else The other component to success is what you do with that extra time and realizing that every hour you spend needs to pay you the most money in return possible otherwise you are wasting that time. It kills me to see people who are working that bartending job at night from 8 PM - 3 AM working their way through school but having to drive two hours round trip to the best place to work only to make $100 for some nights in tips. You have to do the math. If you are spending $20 on gas a night and 3 out of 5 nights you are only netting $80 for an 8-hour shift plus having to drive 2 hours then you only make $8 per hour. Not bad, but if you have some other job closer to where you work where you can make $10 per hour, you can make the same money in 8 hours and return 2 hours a day or 10 hours a week. That is 500 hours a year. Now what is really important is what you do with the 500 hours per year. If you are going to use that time to party more and not invest that time into what it takes to make more money, then you are missing the point. If you were to use that time to pick up extra classes at night towards your degree or get a minor in addition to your degree or even just to work harder in your current area you are studying then you would be better off. The problem is that people tend to waste too much of that valuable time. You have to invest that time into yourself and making yourself better and more marketable so you can get a better job and work smarter not harder.
The Importance of Being Tactical and Strategic Almost everyone I know wants to be rich, but too few apply themselves. I have some friends that have four jobs. One full-time job, and three part-time jobs. The three part-time jobs also add up to 60 hours per week on top of the 40 hours for their full-time jobs, but the problem is they are as busy as I was at 28, but not focused on a single path towards success. All they are guaranteed to get out of that strategy is tired. I hate to see that. I admire and respect them for their long hours and hard work. They are working every bit as hard as I did in my 20s, but at $10 per hour, working 100 hours a week is just short of $50,000 per year. That is a great way to look at what I am suggesting people do. If you complain about $10 per hour because you can’t live on $20,000 a year then clearly, working harder will get you $50,000 a year which isn’t bad. But you have to invest some of that time into figuring out how to get from $10 per hour jobs to $12, to $15, to $18, to $20. Something happens at $20 per hour where you can go to $25 or $30 or $35 pretty quickly. What starts as $1 per hour and $2 per hour jumps in salary eventually gets to $3 and then $5 per hour jumps pretty quickly. Once someone sees your value at $30-$35 per hour the extra jump to $45-$50 per hour comes easy.
Providing Higher Value and Getting Out of the Hourly Mindset The way that I beat the system was to get off the hourly mindset. After working on the same kind of stuff for five years, I had a pretty good idea of how that project was going to go, and I realized that other people just starting like I did was going to need 200 hours to do a project at $25 per hour. That was $5,000 and would take the average person five weeks of 40 hours to complete. I was able to make a pivot by being able to do that same work in less at a higher quality by only needing 100 hours to do the same work for the same $5,000. By working 10 hour days seven days a week, I was able to get that 5-week long project done in 2–3 weeks or less, beating my rivals by nearly two weeks and providing better quality in less time for the same money. Well, it only looks like the same money to the client. What is happening here is important to understand. I was getting paid $5,000 for 100 hours of work in 2 weeks. That means that I made $50 per hour and $5,000 in 2 weeks. Doing that 25 times a year meant that I was able to make $125,000 when my rivals could only do ten projects of that size a year and only make $50,000 a year. Everyone used to be amazed at how I could “give away my services” at the same price as everyone else for much higher quality and yet still drive expensive cars and everything else. It was just a matter of getting out of that hourly mindset and understanding how you go from making $25 per hour to $50 per hour and how you go from making $50,000 a year to $125,000 per year in just a few short years.
Passive Income, Multiple Revenue Streams, and Next-Level Shit A post like this would not be complete without more than a passive reference to the schemes and buzzwords of the day. The best thing I ever did was learn how to become a business owner and not just being self-employed where I had created a job for myself. After ten years, I had built up a $1M a year stream of income, but I was responsible for $400,000 of that personally. It was then that I started to diversify and start multiple businesses, but first I had to extract myself from being the core of our revenue stream at the primary company. That took two years to do and cost me $800,000 in lost revenue. It almost destroyed me and everything I took ten years of building, but it was necessary to get to the next level. I was glad I did, but I think my wife thought I was out of my mind. Now, 15 years later, it was pretty clear that it was the best thing I ever did. You have to reinvent yourself every five years if you want to survive. The percent of companies that fail in the first five years is 94% and within ten years is 98%. I have made it 25 years by reinventing the companies every five years. You have to evolve or die. What nobody tells you is that the “next-level shit” you want to get to, well that changes every five years and once you get there, to stay there, you have to keep reinventing yourself.