The 4 ways to earn money – and why you’re probably stuck on the first one
A message from our CEO and Founder, Joseph Chou.
It’s my absolute belief that everyday Australians could earn 5 times more than their current income.
Perhaps even 10 times more.
Once someone finds a reason to do it and then learns how to do it – it is entirely possible.
Most people wish they were earning more money, but few are actually taking a closer look at the way they’re generating their income. And chances are, what they will find is that they are not maximising their earning capacity.
Most people are likely surrounded by friends and family who are earning a similar income to them or less – and don’t really know how to break out of that.
In my experience, I tend to look for a formula in things. I want to look beyond the surface, understand all the ins and outs and find out what makes something tic. As a businessman, for example, I study other successful organisations – even those that have nothing to do with property – and look for what can be learned and replicated.
Based on my experience and reflection and review, what I’ve found is that income can be broadly categorised into 4 types – and most people are either only aware of or attempt to earn the first.
Types of income
-
Time-based
This is the income or salary most people are familiar with. Whether you’re a doctor, nurse, in HR, IT or a tradie – this is income you generate by trading your time for money. There may be a different value placed on each profession depending on what society values – a lawyer can charge $2,000 an hour for example, while an IT professional may charge $80 an hour – but it’s still income based on time spent working.
-
Transaction-based
This is income where you get paid a percentage of a transaction, based on the transaction’s value. This includes sales commissions you might receive from selling any number of products or services – insurance, property, retail etc. Investment banks, such as Macquarie, would receive a percentage of income from companies raising capital to IPO – this would be another transactional income example. Transactional income can potentially help increase the value of your hours without the need to study further or change professions. It’s also something that can be done part time, to supplement your existing income.
-
Leveraged
Leveraged income is not directly dependent on any personal input of time, transaction or skill. Leveraged income is where you can leverage the time or skill of other people and keep a proportion of that income. For example, in Microsoft, a massive team of engineers or IT support may go out and charge out their time and services; Microsoft would keep a proportion of that cost and also pay the remaining amount to the individual. A doctor who runs a medical practice may hire other 5 doctors, pay them a good income and also keep a portion of their charge out fee. Network marketing – Amway, Avon etc – is another example of leveraged income.
-
Investment
Most people would be familiar with investment income – this is income generated from an asset you own – for example, dividends from shares or rent from a property. For everyday people – investment in property is appealing – it’s an asset class everyone can understand, and you can make substantial financial progress through investing. For example, I was just talking to a couple who are Ironfish customers – they’re earning $70K each through their salaries but their net rental income from their portfolio is making them an extra $70K a year.
At Ironfish, we’re very strong about building wealth and educating our customers on the importance of achieving long-term financial security. We provide the guidance and mentoring to help people expand their income, not just through property investment, but also through education, and a change of mindset that can help them to progress in their career – to increase their perceived value in the workplace or look to other income types if that suits.
At the end of the day, there are many ways to expand your income but relying on your own time and the prescribed value of your time is not going to take you to the next level. If you decide you’re ready to take the leap, then do your research, get onto Amazon and download a few books – there’s plenty of good reading out there on the topic. But most importantly, talk to people who know, who’ve done it before – chances are they will be very willing to share their insights, because life, after all, is about maximising opportunities.