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You can make money in three ways: (1) you make it (you are an employee; you work), (2) someone else makes it for you (you are an employer), and (3) what you own generates money (assets). Being self-employed can be thrown into the employer category, if necessary. I suppose you could add things like gifts and inheritance too. However, I’m not going to count those things because they are too random.

If this assessment is true, and your goal is to work less but still have more money, the trick is to pile your effort (and money) make into the right categories. You should try to be an employer or acquire assets. I can’t make it much more simple than this. You either need to have other people working from you, or you need to own stuff that makes money while you sleep. You need to drive your own destiny.

Many people do not understand these fundamentals. Still others understand the situation but they are either afraid of money or they are too afraid of risk. The tradeoff is to work for someone else.

But, is working for another person or organization “playing it safe” or is that a fantasy? It depends largely on who you work for and how financially strong they are. If your employer is in the dumps, you are in the dumps, or you could be. Putting this another way, as risk increases for your employer, risk is increasing for you. If you haven’t thought of things this way, you should.

I’ll end this by saying again that there are only three ways to make money. Most people choose the path of least resistance, lowest risk, and lowest return. That’s fine if you have a strong employer and you aren’t looking for true financial independence. But, if you want to shoot for the stars, you need to own your own company, or you need to build up your assets to generate wealth. You probably need to do both.

Action plan: First, learn more about being self-employed and starting your own company. Second, start learning more about assets and accumulating wealth. Need some reading recommendations? Check out Million Dollar Consulting, Automatic Wealth, or maybe Rich Dad, Poor Dad.

This entry was posted on Monday, June 6th, 2005 at 12:18 pm and is filed under GeneralComments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.