The wealth triangle is a combination of three things, which, used together can help you escape the rat race and bring you to financial freedom.
Step 1: Developing high-income skills
A high-income skill is a skill that makes you at minimum, a five figure income per month. These are skills that are directly related to what the market needs. And most of them are evergreen skills – meaning skills that will last you over a decade and further. Examples of high-income skills are; high ticket closing, copywriting, and paid speaking. A high-income skill is different to a high-income job. A high-income job is specific to a profession whereas a high-income skill can make money in any industry, anywhere in the world. As long as you can use your skill to solve someone else’s problem you’ll be able to profit from your skill.
Since high-income skills are not taught in schools, most people do not know about them and therefore do not know how to develop them. This makes these skills very rare and increases the value of these skills. This because of supply and demand. If there is more demand than supply for a skill its value goes up; if there is more supply than demand then the skill value goes down.
How to develop a high income skill?
Pick one high-income skill to focus on, don’t try to learn to many new skills at once. If you start a lot of projects you will be unlikely to finish any of them. Instead, master one skill and leverage it before trying to master multiple. I recommend that you spend one hour a day learning about your high income skill. This could be in the form of training programs, courses, or books. Then spend an hour actually practicing and applying your chosen skill. You will always learn more from doing than by learning to do something.
Step 2: Building a scalable business
A scalable business is a business that has the potential to multiply revenue exponentially with minimal cost and time. For example, any product provided via the internet is scalable. You are able to create the product once and distribute it over the internet multiple times. With this type of business you wouldn’t have to hire more workers to deal with more clients as it can all be handled by technology. A scalable business leverages systems and software to use less of your time.
It is important to build high-income skills first for two reasons. The first is money, many businesses fail because they run out of cash. With your high-income skill you can make enough money to support the growth of your business. The second reason businesses fail is because they have no skills. If the entrepreneur does not have the right skills to build the business they will not make money. An idea will not necessarily make a successful business. A scalable business can amplify you skills, but if you do not have any skills, you have nothing to amplify.
Step 3: Investing in high return investments
People invest in low return investments like low yield mutual bonds. Whilst these are safer they do not give much return and average between 5-7% yearly. High return investments, on the other hand, are investments that bring at least a 10% yearly return and even higher. However, high return investments do also come with a higher risk. The reason why most people invest in low return investments is because most of them can not afford to take on the risk. Those who have a high-income skill and/or a scalable business have the ability to take on more risk and will therefore reap more rewards. Investing is also a skill of its own and many investors educate themselves to lower the risk and to maximise their chance of rewards.
Following all three steps of the wealth triangle can increase your cashflow in both active and passive ways. Creating passive streams of income and buying assets are a major step towards financial freedom.