Deep Dive
Shownotes Transcript
Here's the deal. The maximum net worth a typical American employee can build in one lifetime is around $5 to $10 million. And that's assuming they have a solid salary and good retirement options that they consistently invest in. For most people, including me, $5 or $10 million is plenty.
But what if you're one of those high achievers? You know, the type that reminds the teacher that she forgot to collect the homework? Derek! If you're dreaming bigger and want to be the captain of your own financial destiny, you need to understand the four different levels of creating income and what they mean for your earning potential, which is exactly what I'm breaking down in this video. And the suggested donation for today's video is one like or subscribe. And if you're a YouTube philanthropist,
do both. But it's totally the honor system, so I can't actually tell. But remember, God is watching. God's watching. Excellent. All right. To end up among the ultra high net worth individuals, or as the French call them, ennuis, you're going to need a higher earning potential than the average Joe or Jane, or as the French call them,
I don't say blah, blah, blah. Earning potential is the maximum amount of money you can make in a set amount of time. For example, let's say all of your income right now comes from that clowning gig that pays 20 bucks an hour and you can work up to 40 hours a week. Well, that makes your weekly earning potential 800 bucks. But you're not guaranteed that much because if you get sick or take a vacation, you won't work all 40 hours. But
the potential to make that much each week is there. So if you want to break the 5 or 10 milli mark in one lifetime, you need unlimited earning potential, meaning the way you make money isn't restricted by a set wage. So how do you get there? Easy and hard. You got to work your way up the four levels of creating income. Now, one caveat before we talk about each level.
climbing Income Everest is not for everyone. To some of you, this whole concept is gonna sound worse than a middle school gym class uniform, and that is okay. There's absolutely no shame in working a job you love for a fair salary and being content with the wealth it allows you to build. A great example of this is teachers, who surprisingly and unsurprisingly rank third on the list of top five careers of net worth millionaires.
Now on the flip side, there's also no shame in wanting to see how much wealth you can achieve when you put your mind to it. Now it's important to check your motives for wanting more, but know that you're not an evil super villain by default just for wanting to build wealth. Anyone who calls you that is, pardon my French, a self-righteous turd juggler. Sorry children. - No more saying turds. - So if you're still in, let's break down the four levels of creating income and talk about how each one gets you closer to that nirvana of unlimited earning potential.
- Level one, making income as an employee. At this level, you're basically trading your time and talents for money, but not just any amount of money. In this case, it's your hourly rate or your salary. Now, don't let level one fool you. You can make great money with a quote, normal job, and you can absolutely build serious wealth. But at the end of the day, your earning potential depends on someone else's opinion about how much your work is worth.
And hey, can I just say, your net worth does not define your self-worth. Remember, we're all just plastic bags drifting through the wind wanting to start again. Do you ever feel? No matter how high up the corporate ladder you go at your nine to five, your income is capped, and that is no cap. So if your goal is getting to unlimited earning potential, you need to start working toward level two, making income as a solopreneur. Now, solopreneur comes from the word entrepreneur, which comes from the French word entrepreneur.
Nice. Pardon his French. In this case, we switched entre with solo, meaning one man band. Now at this level, you still generate income by trading your time and talents for money, but now you get to set your own price because you just became your own boss. Well, it's about time. And what does that do to your earning potential? It blows it up like a luxury pool float.
Because if the boss wants to work more to earn more, that's the boss's prerogative. And who's the boss? Not Tony Danza. It's you, baby. And any extra profit you generate goes to you, not the employer. Well, actually, you are the employer, so it is you. It was me the whole time. Plus, there's lots of other levers you can pull to up your income besides just putting in your time.
You could raise your rates when demand for your skill increases. You can take on bigger and better clients. You can even optimize your processes for getting stuff done to make sure you're pocketing as much profits as possible. Now, even though you will have more earning potential than the level one folks, there's still a pretty tight lid here because there's only, you know, one of you and you only have so much time in a day.
And get this, most solopreneurs, they're not just working 20 hours a week. So if you're getting into it for that, think again. You might be working more than 40 hours a week, more like 60 or 80, especially early on in your business. Not to mention, your income likely won't be as consistent as a salary job, which can add some stress and complexity to your finances.
Sadly, just showing up to work won't be enough. You got to learn how to market yourself, find clients, create proposals, collect payment, and, you know, actually do the work. Plus, you got to figure out where to put all that new income you'll be making. And one of my favorite options is a high yield savings account from online bank Laurel Road, one of the sponsors for today's video. I mean, let's be real. Every solopreneur striking it out on their own and leaving the corporate campfire is going to need a well-stocked emergency fund for those months when the clients aren't
And with a rate of 5.15% APY, a high-yield savings account with Laurel Road is the perfect place to keep that liquid cash. Plus, these accounts have no minimum balance, no monthly maintenance fees, and your deposits are FDIC insured. So go to laurelroad.com slash george or click the link in the description to get started today. And if leaving that same corporate campfire leaves you without your employer-funded cell phone plan, be sure to check out Tello, our other sponsor for today's episode.
Tello has epic savings on the same high-speed nationwide coverage you thought you could only get from the big guys. And we're talking $25 a month for the unlimited everything plan. And the plans are crazy affordable. They go down to as low as $5 if you don't need all the bells and whistles. And if single-digit prices weren't enough, you can also upgrade or downgrade change plans whenever you want.
because contracts and fees are not the Tello vibe. So go to tello.com slash George and get an extra five bucks off the unlimited data plan during your first month of service. That's tello.com slash George, or click the link in the description below. Okay, it's time to take things up a notch to level three, making income as an employer. Hey-oh, at this level, you're finally trading other people's time and talent for money, because you're not just your own boss anymore, you are the boss. Boom-ba-da-boom-ba-da-boom!
Now, full disclosure, you're going to have to balance the extra income coming in with expenses like payroll, office space, and other overhead. And kicking your feet up will not be an option. You'll be sacrificing plenty of your own time to keep this crazy commerce train on the capitalist tracks. But instead of needing to be involved in every single transaction, you will start to delegate.
which is a French word I think means hire other people to do work. This is when your earning potential can really start to multiply like an overfed sourdough starter because the hopes and dreams of all those customers are no longer dependent on the 24 tiny hours you as one person have in a day. If you're willing to brush up on your business skills, you can get pretty close to unlimited earning potential here, but close only counts in horseshoes and karaoke song lyrics. So if you're after the real jackpot, you've got to push through to level four, making income as a passive income.
Not a pacifist. We're not talking anti-war. It's more like anti-work. But really, this one involves a whole lot of work. Now around these parts, every dollar is made passively, which is the French's way of saying...
Any VeggieTales fans out there? Just me? Wasn't allowed to have cable or watch MTV and that's all we had. That and McGee and me. Adventures in Odyssey? Get on with it. But at this level, your money finally starts pulling its own weight and multiplying itself through investments like real estate or mutual funds or even a business that generates money while you sleep. And this is when your earning potential becomes truly unlimited.
because it no longer depends on how many hours you or your army of employees can work in a single day. But getting to this point is more challenging than you think. Replacing your working income with passive income is all about building momentum. But in order to pick up the speed you need, you've got to set aside a chunk of your income to slowly start investing during the first three levels of this process, which might ruin your plans to buy that company jet. And
And look, I hate to say it, but if you start this journey and it feels painstakingly slow, then you're doing it right. Mastering the different levels of making income just takes time, like becoming a butterfly or memorizing the book of Leviticus, which I have attempted to do. Do not cut the hair at the sides of your head or clip off the edges of your beard.
I have in fact done both of those things. In fact, if leveling up between these income-making methods ever feels like an all-or-nothing leap, it probably means your boat is still too far from the dock. So maybe get her a little closer so it's more of a step off the dock instead of a leap.
For example, if you're currently an employee looking to transition into your solopreneur phase, start by figuring out which of your sick skills are in the highest demand. Then find a few freelance clients who are willing to pay you for those skills. And then keep your nine to five job for another six months and see how big that jump looks. Maybe even stockpile some cash to make the transition a whole lot less stressful. Multiplying your earning power is a long game, but if you're willing to keep at it, Jeff and Elon could probably use some company up there at the top.
I hear it's lonely. Not that I would know. I got plenty of friends down here. If you're interested in starting to build that momentum toward level four today, be sure to check out this video about beefing up your passive income while you sleep. Thanks for watching. We'll see you next time.