The Math of Wealth.

Hello, my friends!

How are you today?

Does anyone start to materialize some of the ideas you have? Bought domain, wrote down MVP, or tried to pitch an idea to your friends?

If so, I sincerely congratulate you! 👏

Keep it up!

Now is the time to sketch out the concept of our part-time entrepreneurial system.

Disclaimer.
I am not a big fan of the Ikigai concept - find the craft you love, create a small solopreneur business or a family business, and enjoy the process, daily routines, and make it fully integrated into your life.

Instead.

I prefer to find a business model, which:

1. Works for YOU, controlled by YOU.

2. Scalable, maximum passive, and highly automated.

3. Will eliminate trading your time for money.

Released time you can use as you please - hobby or things you love(even projects you want to build yourself or contribute your time), that don’t bind to the business, and won’t be sacrificed in favor of money.

Agree? Go!

Let’s break down the equation of wealth, invented by self-made millionaire M.J. DeMarco:

Wealth = Net Profit + Asset Value

Do you see in the formula dependence on your time? Or “do what you love”?

Here is a small explanation of why this formula works and how it can make you rich:

1) Net Profit is pivotal.

For example, you own a website selling leads at $4 each. Selling 1000 leads daily equals $4,000/day or $1.46M/year. A small increase to $5/lead boosts annual income to $1.825M.

To convince your boss to grant you a 25% salary increase would be a much-complicated task!

2) Asset Value.

Say your business now profits $200K/year. In an industry with an 8X multiplier, your company's value is $1.6M. This is how wealth escalates, especially if you decide to sell.

This formula is key to exponential growth, it will be our end goal and our strategy for the business we started to create now.

And on the contrary, the formula that most people use will never make you rich:

Wealth = Salary + Interest
or worse:
Wealth = Income + Debt

Both are based on trading your time for money. It will never work because time has no leverage.

Even though Time is our most valuable asset - don’t waste it.

Tip

By building your business system don't underestimate the importance of compound interest. With every iteration, a mere 1% boost can propel your business forward faster than you can imagine.

That’s all for today.

Have a fantastic week and enjoy discovering your passions!

Catch you later,

A.