Steve Conley
Transforming Cashflow into Life’s Opportunities | Founder of Planning My Life & Academy of Life Planning
March 12, 2022Open Immersive Reader
A small proportion of the population can save their way to wealth by applying frugality and deferring earned income (money earned elsewhere) to investments and property.
However, saving your way to wealth is exceptional because it requires discipline, persistence, and starting early enough in life to allow compound growth to work its magic. Yes, it is a workable strategy, but not many people fit this profile.
What other strategies can be ways to wealth when you start with nothing? Here are a few ideas to work with:
1. Make money. That is, make a service or product doing something that you are good at, and you love doing that the world needs and will pay for. Add more value than it costs to produce. Sell it.
2. Do what you love. Find work that doesn’t feel like work from which you never wish to retire. Produce an income for life, effortlessly. For example, make a hobby a side hustle people will pay you for.
3. Create nocturnal income. Create collateral like books, courses, podcasts, videos, so that you can earn while you sleep.
4. Diversify your projects. Become a portfolio entrepreneur. When the income dries up on one project, it carries on coming in on another. This increases safety and certainty in the outcome.
5. Own the job. While you work for someone else, you are taking income, but your boss is making wealth. Own the job. This gives you more of the income for taking on risk and creates an asset valuation that you can sell on exit.
6. Exchange your know-how for money. Most people exchange their time for money. Time is limited; therefore, your money is limited. Remove yourself from the job. Employ others. Productise your service so that you can sell it to others. For example, a franchise business is a model in which the franchise owner grants another company a license for the proprietary business knowledge, processes, and trademarks, thus allowing the franchisee to sell a product or service under the franchisor’s business name. This is a totally scalable business model.
7. Create a firm of endearment. Create a firm that people love, a firm of endearment. It’s called stakeholder economics. It’s trending right now. Proposition architects know that building a business that delivers a quadruple bottom line on trends grows at an accelerated rate. The four measures are Purpose, People, Planet, Profit. Deliver on all four and surveys[i] show that you can expect to outperform other firms by two per cent per month. That’s effectively doubling every three years relative to the competition.
8. Establish a market need for your service or product. Do what the world needs. Businesses that ignore this point face the highest risk of failure. 42 percent of businesses fail[ii] due to lack of market need for their service or product. Check out what your customers think. Use insights to build compelling customer propositions from Pains and Gains. Add why it’s important? Why now? Why you?
9. Factor in your life expectancy. Many people use a four per cent rule. You save £1 million and live on four per cent, i.e., £40,000 per annum for life. This rate of drawdown is statistically proven to leave your underlying capital intact in real terms. But you can’t take it with you. If you don’t intend to leave a legacy to heirs or the taxman, spend the capital. Divide the capital by your remaining years, assuming you live longer than expected to be on the safe side. If you ignore this point you could be already long past the winning post, without even knowing it.
10. Factor in money you make after you retire. Don’t simply assume that when you step off the treadmill of work existence that your capacity for making money stops. As Stephen R. Covey said, “If you want to die early, retire to golf and fishing and sit around swallowing prescriptions and occasionally seeing your grandkids.” Retire from your job but never from meaningful projects.
These are just ideas. I cannot guarantee that you will make wealth by using them. They are logical. They make sense. I have used these ideas to build businesses for others successfully for over 20 years. And for the past 10 years – since I owned the job – I have been using it myself and found it works.
If you want to know what the overall true picture looks like for your financial future, and you want to include total wealth, not just your savings, then use an end-user-centred financial planning application. If you want to track progress using an app with embedded banking.
Check out HapNav, the world’s first end-user financial planning application with an open banking app inside. See what the AI suggests as options for you to consider in your way to wealth to support your life plan. It cost £6.99 per month and is available on a 30-day free trial. If you want to check it out once, you can use the guest pass for free.
Happy navigating!
Steve Conley
Visit the website: www.hapnav.com.
Notes:
[i] See study: https://www.firmsofendearment.com/ The firms of endearment featured in this book have outperformed the S&P 500 by 14 times over a period of 15 years.
[ii] The survey by CBInsights that covered employees and founders from 101 start-ups analysed the reasons why those companies failed. 42% of start-up businesses fail because there’s no market need for their services or products.
Academy of Life Planning 