Doug Winnie, ActionCOACH Business Coach
Where are you today and where are you going on the Ladder of Wealth?
This comes from my readings of, “Billionaire in Training,” by Bradley J. Sugars. Get it and read it – it is very powerful and well worth the 20 or so dollars and the couple hours to read it. I’ve thrown in my own thoughts and give a generalization of the principles in this article.
The Ladder of Wealth begins when we start off as an employee. Most of us do start here, whether employed at a fast food restaurant, wait staff, or working for our parents. This is the stage when we are learning, hopefully learning lots so we can move to the next level of wealth, self-employed. The good news about this stage, “employee,” is that we are paid to learn. It is a great opportunity, providing you do indeed understand this is the stage to learn, while on your employer’s dime.
At the second level of wealth growth, you are working for yourself. At this point, you could be selling knives, Avon, Amway, or your own trade, say a painter or carpenter. Your income is entirely dependent on your ability to sell and deliver. This is a challenging stage as your own motivation and your own skillset must be up to the level necessary to fund your lifestyle – your household expenses, your vacations, your retirement; it is now entirely up to you. You have complete control and can begin to earn a very nice living. At the next stage, “employer,” you learn that employees can be profit centers, and at this stage you have more responsibility and significantly more opportunity.
The Employer, Manager, Supervisor, Boss, as you may like to be called, takes on a few more roles. You get to hire and fire, motivate, compliment and provide constructive criticism, give rewards and deal with tardiness, absenteeism and the whole host of financial elements like payroll taxes. When you are working this level well, your team will begin to take on all the elements of the business, from lead generation to closing the sales, to delivering the service and goods, to invoicing and collection of payments, finance to HR and training. It all gets done (or not), depending on your ability to provide the education and motivation the team needs. Many strive to reach this level and some who have reached it, hope never to return. This level requires a manager to become a leader. Working on the business more and more means you get to work less and less in the business. If you were a haircutter and decide you want to increase your wealth and open a salon with your own team, you learn to grow a business, grow a team, and the team is what keeps the new customers coming in, and the existing customers happy. The great benefit of this level is the business will run without you. Depending on your ability to train your team, in order to eliminate your position, the more time you will have to spend with family and friends. This is usually the most challenging stage, because you have to grow out of your occupation, and grow into a new occupation. You will need to change, and probably change significantly, in order to grow within and grow past this stage.
Next, you’ll be reaching the “investor” level where you really realize every business can be a tool for growing wealth. Whether it is a shoe store, a donut shop, or a CPA firm, each of these businesses, at the Investor level, are tools for wealth creation and maximization. What stops you from reaching this level, are the challenges at the prior level. What keeps you from going past this level, are only the skills which need to be acquired relating to working on a business and not in the business.
Finally, with all the positive cash flow from your business(es), you now have cash to be a true entrepreneur. Buying real estate at the right price and right time, investing in business ventures with the right teams and the right leaders, determining that the stock market is having a sale and you should buy low and sell high. Possibly creating a franchise. Maybe you now have time to write a book and then leverage book sales for a lifetime (or many lifetimes). A really interesting observation is that many people quickly jump to this level without actually achieving success at the prior levels. When you cannot handle a 10 percent drop in your investments overnight, due to circumstances that may not have anything to do with your reality, and the 10 percent drop affects your livelihood, this is likely not the place to focus your time and energy. This level in the stock brokerage world is reserved for those who are very seasoned in the business and economic world. This level is where you’ll buy 20 properties in a bundle at pennies on the dollar because you know you can invest the necessary cash to repair, remodel, market, and then sell the properties over the next five years and make a handsome profit. If the market isn’t ready to sell in five years, you are comfortable holding the properties and sell them in 10 years. You are, at this level, very aware that time is more important than money, and use time to your advantage.
From employee to entrepreneur is a great journey and one that I’m privileged to teach and mentor each and every step along the ladder. As you continue to climb the ladder, your challenges may become larger, however, your rewards can also become larger. The journey is fun, too, for those who enjoy the new challenges.
Doug Winnie is Certified Executive & Business Coach with ActionCoach
