How To Harvest Wealth Versus Needing Income

By: Dan Kennedy on: April 10th, 2014 7 Comments

One of the lessons I learned slowly and painfully has to do with income vs. wealth.

First, let’s clarify the difference between ‘income’ and ‘wealth.’

Entrepreneurs tend to focus more on the former than the latter. And many enjoy very high incomes for many years without ever converting any of it to wealth.

Sales, profits, and income are all important, but none of them directly produce wealth. (Tweet this!)

Wealth comes from the creation of value (not income) and from prudent investment.

I wasted years of opportunity thinking in terms of merely making sales and generating income until I shifted my thinking to creating valuable assets.

I can assure you, if you haven’t or don’t focus on asset-building rather than just income, you will forever need income.

Incidentally once I went into asset-building mode, and focused first and foremost on that over a period of about 7 or 8 years, I began to harvest wealth from the assets. I was able to make lifestyle choices… some of which involved my selling off assets and extracting the remainder of the value for investments.

And because of my asset-building years, I am now in position to be content working for wages, high wages, but wages nonetheless because I no longer need income.

Once you re-calibrate your thinking about your business and your job from just focusing on making sales and generating income to creating assets, you’ll need SYSTEMS that build assets and asset value.

There are four basic categories of Asset Building Systems:

  1. Rounding up the herd
  2. Retention of the herd
  3. Ascension of the herd
  4. Management of the herd

Within each of these categories you will need systems in place. For example, rounding up your herd will require a system for market selection, media selection and lead generation, among others. Retention will require systems for managing relationships, product development, delivery, etc.  Ascension will require rewards such as incentives and a visible ascension ladder. Management requires a self-management system, financial analysis system, and so on.

What do I mean by “system?”

Michael Gerber, author of E-Myth defines “system” as something duplicateable, franchiseable, so your business is like a McDonalds. Another way of looking at it is simply: the same thing being done the same way every time, on a set schedule.

So, for example, if you are presented with or gather up a collection of relevant sales, customer behavior, ad response statistics every Monday morning to analyze the preceding week, that’s a system. If you do it randomly and look at different numbers each time and lack a set of criteria for evaluating them, that ain’t a system.

If you have a series of three letters to upgrade members from one level to the next and apply this to groups of members as they hit the 6-month mark, then every month, the next group hitting the 6th month gets the three letters, that’s a system. If you attempt to upgrade members at random, that’s not a system.

You’ve got to have good systems. It’s the key to creating the lifestyle you want. It’s the key to having the freedom to work with people you like, doing work you enjoy, where and when you want.

If I challenged you to show me and teach me to “operate” your system for each of the above items on the list, could you?

If “no,” make asset building systems a top priority.

P.S.– Get “The 10 Rules to Transforming Your Small Business into an Infinitely More Powerful Direct Response Marketing Business” for FREE. Click here to claim your customer-getting, sales-boosting tactics.

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    ABOUT THE AUTHOR:

    Dan Kennedy is internationally recognized as the 'Millionaire Maker,' helping people in just about every category of business turn their ideas into fortunes. Dan's "No B.S." approach is refreshing amidst a world of small business marketing hype and enriches those who act on his advice. For more money-making marketing tips, tactics and strategies, go to www.GKIC.com

    7 Responses

    1. Dear Dan,

      Thank you for sharing this valuable insight. We invest in systems for our internal processes
      and for our services/products provided to our herd/clients.
      OSI stands for “Occupations Systems Investments”.
      Kind regards,
      Erich R. Willner

    2. John says:

      Thanks Dan
      I’m enjoying listening to your wealth attraction seminar in the car at the moment, and this sits nicely alongside it
      bw
      john

    3. David Hunter says:

      I really need to crack down and start the “Asset Building System.”

      I’m going to start in 3, 2, 1…

    4. Pandu says:

      Nice article..clinically precise remedy for a budding entrepreneur !

    5. I would like to joint the bootcamp. I assume I can join the fun and the wealth.
      Let me know
      so I can register

      September ( Phoenix) is too far off.
      Dallas?? flight costs, place to stay??

      Anything sooner?

      Bye
      Frank

    6. […] One of the keys is definitely speed. Without speed, you can’t gain momentum. Using speed marketing strategies such as creating systems and identifying opportunities for using them will help put you on the fast-track.  (For more on the systems you need, read How to Harvest Wealth Versus Needing Income.) […]

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