The fourth step: The ladders of wealth creation.
Most people spend their entire careers climbing a ladder they never chose. Before defaulting to “working for someone else,” it’s crucial to understand the different ladders of wealth creation—and how they can lead to freedom at very different speeds.
This isn’t a complete list, but it will help you see where you are now—and where you could go next.
Hourly Job for a Company:
Explanation: You work a certain number of hours each week and get paid an hourly rate by the company.
Example: If you work 40 hours a week at $20 per hour, your weekly earnings would be 40 * $20 = $800.
Salary Working for a Company:
Explanation: You receive a fixed annual salary regardless of the number of hours worked.
Example: If your annual salary is $50,000, your monthly earnings would be $50,000 / 12 = $4,167.
Hourly Work for Clients:
Explanation: You charge clients an hourly rate for the services you provide.
Example: If you charge clients $50 per hour and work 10 hours for a client, you would earn 10 * $50 = $500.
Project Work for Clients:
Explanation: You agree on a fixed price for a project regardless of the time it takes.
Example: You charge $2,000 for a web development project. If the project takes you 50 hours, your effective hourly rate is $2,000 / 50 = $40.
Managing a Team to Do the Project Work:
Explanation: You hire and manage a team to provide services, and you take a cut of the earnings. | This is what you want - This will set you Free (Owning Not Operating the Business)
Example: If you charge a client $5,000 for a project and pay your team $3,000, you earn $2,000 as the manager.
Fixed Scope for a Fixed Price:
Explanation: You deliver a specific set of services for a pre-agreed price.
Example: You agree to design a logo for $500. Whether it takes you 10 hours or 20 hours, you still get $500.
Selling Consulting Packages:
Explanation: You offer a bundle of consulting hours or sessions for a fixed price.
Example: You sell a package of 10 consulting sessions for $2,000. Each session effectively costs $200.
Recurring Services Provided by Employees:
Explanation: Employees provide ongoing services for clients, billed at regular intervals.
Example: You offer monthly website maintenance for $200 per client. With 10 clients, you earn $200 * 10 = $2,000 per month.
Requiring Productized Services:
Explanation: Standardized services sold as packages, often with clear deliverables and timelines.
Example: Offering a $300 SEO audit package that includes a detailed report and recommendations.
Digital Products:
Explanation: Non-physical products such as eBooks, courses, or software.
Example: Selling an online course for $100. If you sell 50 courses, you earn $100 * 50 = $5,000.
Products Sold in Existing Ecosystem:
Explanation: Selling products on established platforms like Amazon or Etsy.
Example: Selling handmade crafts on Etsy for $30 each. Selling 100 crafts earns you $30 * 100 = $3,000.
Physical Products & eCommerce:
Explanation: Selling tangible products online through your own eCommerce store.
Example: Selling 200 T-shirts at $25 each on your website, earning $25 * 200 = $5,000.
Subscription Software Launched with Consulting Services:
Explanation: Offering software on a subscription basis, often with initial consulting to help clients get started.
Example: Subscription fee is $50 per month, and you charge $500 for initial consulting. With 10 subscribers, you earn $50 * 10 = $500 per month plus the consulting fees.
SaaS (Software as a Service):
Explanation: Providing access to software over the internet on a subscription basis.
Example: Charging $20 per month for access to your software. With 100 users, you earn $20 * 100 = $2,000 per month.
Marketplaces and Social Networks:
Explanation: Platforms where buyers and sellers interact, often earning revenue through fees or ads.
Example: A marketplace like eBay charges a 10% fee on sales. If you sell $1,000 worth of goods, the platform earns $100.
Summary Example:
Let's say you are a freelance web developer. You could work in different ways:
Hourly Job for a Company: You earn $20 per hour working 40 hours a week, totaling $800 weekly.
Salary Working for a Company: You earn a fixed annual salary of $50,000.
Hourly Work for Clients: You charge clients $50 per hour, earning $500 for 10 hours of work.
Charging by the Project: You complete a project for $2,000, regardless of the hours worked.
Managing a Team: You charge $5,000 for a project, pay your team $3,000, and keep $2,000.
Fixed Scope for a Fixed Price: You design a logo for $500.
Selling Consulting Packages: You sell 10 sessions for $1,000.
Recurring Services by Employees: Your team provides monthly maintenance for $2,000 with 10 clients.
Productized Services: You sell a $300 SEO audit package.
Digital Products: You sell an online course for $100, earning $5,000 from 50 sales.
Products Sold in Existing Ecosystem: You sell crafts on Etsy for $3,000.
Physical Products & eCommerce: You sell T-shirts online for $5,000.
Subscription Software with Consulting: You have 10 subscribers at $50/month and initial consulting fees of $500.
SaaS: You earn $2,000 per month from 100 users.
Marketplaces and Social Networks: You sell goods on a platform like eBay, which earns $100 from your $1,000 sales.
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