I have made many mistakes since becoming a professional blogger and new media consultant but todays post is about the biggest financial mistake I have made and what I am doing about it.
What is this big mistake? I am sure it is a mistake many people make but before I describe it, let me give you some background.
Since leaving school at age 15 I have been an employee. Even though I have had my own company since 2005, nothing changed, I was still being an employee. While I have made a decent living by many standards, I realized my situation was not improving and I needed a shift in strategy.
I had left the world of working for a salary and a boss to working for a different type of salary and a different type of boss.
Working for yourself is supposed to mean freedom of schedule, being able to choose what you do and greater earning potential. For a while I had none of that, I had traded almost like for like. My first task was to diversify my client base so I no longer had a boss but had several customers.
When you spread your work around you no longer have one person in control of you. Your freedom increases and income is more stable.
My second task is to diversify my income. Don’t get me wrong, I love my consulting and freelance writing, but that is the only income I have created. I need to go back to my original plan and create several income streams. Being busy working all the time has stopped me seeing the big picture of where I am going.
What is your long term plan? Are you working towards that plan or just working?
While you can earn a decent living working for others, and there are many other benefits, you will always have a cap on your income. By solely working for other people you are putting the control of your wealth in other peoples hands. The key is to diversify your income, have both passive and active income streams.
There are three types of earning style, which are you currently in?
- I Work For Money – I am an employee, a contractor, a freelancer. I personally do work and get paid for it.
- My Business Works For Money – My business employs people who do work, my business gets paid and I pay my employees and subcontractors.
- My Money Works For Money – I invest in businesses, or other investment vehicles that pay me a return.
From my story above you will see my income is mostly in sector #1 and that is my big mistake.
While I am going to continue doing what I love to do, help people, advise businesses, and write, I am going to add income streams that don’t depend on me working ten or more hours a day, seven days a week.
I have my own business but all the work is done by me, so really I am stuck in the first zone. By delegating and subcontracting I can begin to move into the second sector and exponentially increase my earning potential as I will no longer be restricted by 24 hour days and price ceilings.
What can you do today to improve your situation?
- Diversify your income – If you are an employee, start a side business. If you are a freelancer, diversify your client base and generate some passive or less active income.
- Start new businesses – A business need not be a multi-national, it could be just a new blog built to earn revenue. If you want to get started generating revenue from your blog take a look at Yaros free Blog Profits Blueprint ebook.
- Create products – Working for others or selling others products puts control out of your hands, more profits and control are found in your own products. Brian just released a free report on creating your own digital information products.
- Be open to opportunities – A key part of expanding your personal income potential is networking with other people and being open to the opportunities that flow through your network. Do not take all the burden yourself, by teaming with other people the possibilities and available skills expand.
Ultimately real wealth is found in the third sector. Ever wondered why people say “the rich get richer”? Because wealthy people use their money, not their effort, to make more money. Focus on building an investment fund and getting it to work for you.
This is the first post in a series. Let me know in the comments what you think, if you disagree with my thinking, or if there is anything in particular you would like me to cover.
Table of contents for Making Real Money
- Making Real Money Online: What Type of Earner Are You?
- Making Real Money Online: Spending to Earn
- Making Real Money Online: Expanding Your Operations
- Making Real Money Online: Making it Happen
- Making Real Money Online: Confidence and Taking the Risk
- Making Real Money Online: Your Vision
- Making Real Money Online: What is Wealth?