What if you desire a six or seven figure income and what you’re looking for is a simple formula to get you there?
You’re wondering if the answer to riches is to work more hours, invest in stocks or real estate, begin a side hustle, or start a business. After all, life is much better if you can enjoy a vacation or splurge on a luxury purchase without worrying about your daily expenses.
One way to reach that wealth goal is to follow my simple formula that you must know to get rich and stay rich. It’s called mastering the wealth triangle, a straightforward but incredibly profound way to multiply your income.
This is not some theory or some philosophy. You will not get this from a book because I created and pioneered it from my 15-plus years of financial business experience. It’s gained from my time down and dirty in the trenches with my sleeves rolled up.
This will give you the who, what, why, and when of money. Here’s how it works. The wealth triangle has three parts. I’ll show you these parts and how they work to generate you a high income.
Part 1: High-Income Skills
The first piece is what I call high-income skills. How I define high-income skills is a skill that has the potential to make you over $100,000 a year or 10 grand a month, however you want to calculate it.
In this case, you are trading your hours for dollars but you’re trading your hours for high dollars. You’re taking your skills, your experience, your talents, and you’re delivering value to the marketplace in exchange for money.
So what are high income skills? It’s any skill that makes you a five figure income a month, including copywriting, consulting, and social media management. Even a career such as teaching ballroom dance is a high income skill if you make over $100,000 a year.
Why is it important to have a high income skill? Your high income skill gives you income and comfort. It provides that stability in your wealth triangle while you gain income from two other sources.
Part 2: Scalable Business
For example, a restaurant is not a scalable business because every time you want to open a second location, you’ve got to sign a long lease, and put in a lot of money to renovate the place and hire a lot of people.
An internet type business and an eCommerce business are what you could grow without a lot of infrastructure or without hiring a lot of people, and without a lot of overhead.
Now why is a scalable business important? Your high income skills provide you with income. Your scalable business provides you with cashflow. Then we can grow your net worth with the third income source.
Part 3: High-Return Investments
The third component is what I call high return investment. Now how do I define high return investment? High return investment as an investment that will provide you with 10 percent annual return year in and year out. In some cases it could be more.
Now, a high return investment doesn’t provide you with income, but it builds your net worth.
Here’s why the wealth triangle is so profound. High income skills make you money, the scalable business is people or a system also making you money. And high return investments is also money making you money.
They are three very different ways to build your wealth. Now here is the challenge.
Applying The Wealth Triangle
People who want a higher income have asked me, “What should I invest in?” Or they ask me, “What business should I start?”
My reply is none. They think investments or a business is the way to make more money even though they have low income. Develop a high income skill first and make that $10,000 a month. Trade hours for high dollars because this gives you stability before you work on the other two parts of the wealth triangle.
People who hate their job working in corporate and then jump into business without the know how usually fail. They need the high income skills.
Let me give you an example of why these income skills are important. Let’s say I’m a social media manager and I’ve been doing eCommerce, working with clients, helping them with social media, and driving traffic to their website. I’m making six figures a year.
Suddenly, I see an opportunity, such as a product I can sell online using social media to drive traffic to it. By the time I start that business, I already have my skill. I’m stacking on my previous success. I’ve got what it takes in social media.
Many entrepreneurs don’t have high income skills but they find what they think is a scalable business and sink their life savings into it. You see it happen a lot on entrepreneurial shows like Dragon’s Den or Shark Tank.
They don’t know anything about business but they came up with this amazing idea, mortgaged their house, put up everything they had, borrowed from family and friends and now have 2,000 board games in their garage.
Then they ask the Dragons (investors) on Dragon’s Den to please give them some money to invest in their business and get it going. And the Dragons say No.
The same thing has happened in my own businesses. Some years are good. Some years are bad. The cashflow pattern fluctuates.
But very early on, since my days as a copywriter in my early 20s and later as a consultant, coach and speaker, I strove to increase my earning ability with my high income skills.
So although I made some bad investments, doing like 10 tech ventures as an angel investor and losing money on all 10, and then going into marketing and losing money… throughout all those years, my high income skills are very consistent from year to year.
That gave me my base income. I made loads of money from my investments, but I could always count on making money from my base income.
While I built my scalable business, my high income skills made me money, making $15,000 as a speaker on stage, $100,000 as a consultant, trading hours for dollars.
Investing In A Business
In my line of work I see CEOs or founders trying to build a scalable business, but they’re actually not meant to do that because they lack the leadership skills. In fact, you don’t have to be a big business owner to do well.
We read about entrepreneurs who sell their company for 50 million dollars or 100 million dollars.
You never hear about the guy who just lost a 100 million dollars. He or she is not on the cover of a magazine. You see only the ones who made it, not the 10,000 that died.
When people fail, it’s not very entertaining to talk about it. Elon Musk for example built this company and sold it for millions of dollars. He had a vision, started two companies, lost all his money and was in debt. He was days from bankruptcy.
But he raised the money and now he’s one of the smartest and most successful people on the planet.
Warren Buffet said investing in yourself is the best thing that you can do, anything that improves your own talents because nobody can tax it or take it away from you. If you’ve maximized your talent, you’ve got a tremendous asset that can return 10 fold.
Now what I did is I stacked my high income skills . First, I developed copywriting. Then I learned to sell on the phone. From sales, then I learned how to do marketing. I transitioned in consulting when I noticed people didn’t know how to set up a marketing strategy. After that, I evolved into speaking, such as platform selling, and then joint ventures and deal making.
Over the years, I have this treasure chest, all these tools on my tool belt, that I can call on anytime and make money with it. If you can boost your income to 120,000 a year, you should be able to create a million dollar net worth, not counting your house or car, in seven to 15 years, assuming you keep your expenses in check.
Do You Need To Have A Scalable Business?
You can be very wealthy with high income skills and you can put your money into high return investments. Not everybody should have a scalable business. It’s not for everyone and not everyone is cut out for that.
For example, I have a friend who is a high end photographer with his own team. He makes a six figure income and started investing in real estate twenty somewhat years ago. Today he has a portfolio of about 250 units worth about 20 to 25 million dollars.
Now, to clarify what a scalable business is, it’s not the type of business. It’s how you do it. So if you are doing SEO as a sole proprietor, making 10 thousand a month, that’s high income skill. Then you transition that into doing reputation management for a company.
You take on different types of clients, building a business model where you have a team and you’re not doing so much of the work. You’re leveraging the team system and technology. Then it’s a scalable business. It’s not what you do. It’s how you do it.
People join network marketing because it’s a scalable business. The challenge is, 99% of people don’t make money in network marketing, because they are using that as an escape.
However, you can’t escape from something, you’ve got to escape to something. You can’t escape from your job and jump into something to get rid of it. Many who try network marketing or multilevel marketing (MLM) get rejected and say it’s terrible.
There are people who are making a lot of money with MLM marketing, and others making no money. In real estate, there are people making a lot of money and people making none. It’s the same.
When To Start Investing
So let’s say you’ve got your high income skills and you’ve started your scalable business. When should you invest in something else?
When your scalable business makes so much money you don’t know what to do with it. That’s when you invest.
You don’t invest when you are still struggling, making a few thousand a month. Many people making $2500 at their job see an infomercial about buying real estate, no money down and fall for the idea because they think it will get them out of the rat race.
They buy the course for $69.95, and pay in two easy payments. They learn about real estate, buy a couple pieces of real estate, and then the tenant suddenly moves out. Then they have repairs to make, no money to do the repairs, and then go to foreclosure.
They lose everything and believe investing in real estate doesn’t work. But the reason it didn’t work was because they didn’t have the first piece of the wealth triangle. I know a lot of people who do very well, even though they don’t have a scalable business.
The Change In Mindset
Now that you have your high income skills, making a $100,000 a year, a shift happens. What I’ve learned is that less than six percent of the population makes over a $100,000 a year. Less than one percent of the population makes over $325,000 a year in income.
What happens when you reach that high percentile, something changes in income earners at this level. Suddenly they can see themselves as one of the top income earners in society. It’s very rare at that point to see someone who makes five figures a month, drop down to making $2000 a month.
The new $10,000 a month has become their new comfort zone. If their income does drop, they will do whatever they can to get back to that $10,000. When you have that high income skill, it tells me a few things.
You’re probably good with people. You have a good work ethic. And you’re probably at ease with selling and delivering a lot of value to the marketplace. Otherwise, you wouldn’t be at that income level. Then when you transition into a scalable business, you lower your risk.
Related Post: How to Build a business that run itself
How To Continue To Increase Your Income
One of your goals should be increasing your income every year. It doesn’t matter if it’s five percent or ten percent a year. Keep increasing it and increasing your value.
When your scalable business is generating a lot of cash, put it into high return investments, so you can grow your net worth every month.That’s stability. Income, then cashflow, then net worth.
With the wealth triangle, now you know where you stand and what you should focus on. Now why is it important you have your high income skill, before your scalable business? Because here’s what could happen.
Let’s say you start an eCommerce business and it’s growing and you’re acquiring customers and you’re driving traffic and it’s doing well. You decide to scale it. But where do you come up with the money to do that?
All your money is put in the business. You have a model that works and you have no money to scale it. Now at this point you could bring in an outside investor and give them percentages of your equity. But when you have your scalable business first, you have money to scale.
You know your bills are taken care of. You can invest all your profit back into the business. Some people only have a scalable business which they want it grow, but they also need to eat. So they take their profit out to pay for day to day expenses, slowing the growth down.
So if you’re at the first part, high-income skills, invest in yourself, whether it’s personal development, mindset, or limiting beliefs. Then read that book, get that coach, go to that workshop, and whatever it takes to upgrade your skills.
When you have a scalable business, invest in marketing for the best return. When it’s converting well, you could have two to three hundred percent return. It’s criminal in the stock market, but in this business it is common. You could even spend $500 on marketing and get a 10 grand sale.
So why would you invest your money in some mutual fund, getting only eight percent? With this formula, you also have more control over your business than a mutual fund. You also have more control than investing in stocks. I go over investing and the levels of investors in more detail in this article.
Final Thoughts On The Wealth Triangle
If it’s your goal, your dream, to make a six or seven figure income, it’s within your reach if you follow this formula.
First, work on your high-income skill and have a stable source of income. Don’t just cover your regular expenses and have a bit extra for a rainy day fund – have much more than that. Then start a scalable business when you have the cashflow.
It’s also possible to have a high income without a scalable business. Not everyone is cut out to be an entrepreneur, and that’s okay. Invest in something that gives you 10 percent or more in annual return. Or just build your net worth completely on one or more high income skills.
When you reach that six figure income level, a shift in your mindset happens and you can never go back to making less when you’re in that new wealth comfort zone. To learn more about developing a high income skill, Click here