1) You first work for money
This is usually when you start. You get a job in a company, or you are a professional like a Doctor, Attorney, or Realtor etc.
Working for money requires your physical presence, your knowledge and time. To make more money you have to work more hours, or faster or harder.
The most important thing about this stage is to spend less than you make, save the difference and keep compounding the returns.
Do not borrow too much and do not add any unnecessary expenses. It requires the highest level of discipline.
Usually people finish school or college and they work for money from their early twenties till late thirties or early forties.
It would require 15 plus years to amass enough money to move to the next stage if not they will continue in that stage forever.
To get out of this stage work on bonuses and incentives that beat expectations.
2) Then you work the money
At some point in your life, usually in your early forties, if you kept the savings and controlled your expenses, and compounded your returns, you should have made enough money to start focusing on managing your money as a full time job.
Managing the money or working the money as I call it is when you use your money to make more money. To work the money you could buy and sell products including real estate, or stocks and options or even buy companies.
This stage requires, time, money, knowledge, risk management and many other talents and coordination as well as cooperation of others to succeed.
Do not borrow too much and do not put all your money in one project to reduce your risk.
Usually people go through this stage from their early forties till they turn fifty
3) Finally your money works for you
After working for money for 15 plus years and then working the money for 10 or so years you should be able to have enough money and experience to have acquired the right assets or businesses or stocks and options for the money to work for you.
This happens when your assets bring you income.
business, real estate or stock and option holdings are significant in size to produce enough income.
This stage requires the least of your physical presence.
You must have a business mind to succeed in making money whether you are:
1) An executive in a corporation (in charge of people, products and profits)
2) A business owner or a professional running your own company
3) A real estate investor (whether buying and sell, or owing discount mortgages or having commercial real estate like an apartment building or a strip mall)
4) A stock and options market trader
The business principles are the same:
1) You have to organize to produce
2) You have to assign and enforce
3) You have to supervise and correct
4) You have to grow and sell
Notice that steps 1 to 3 involve people and their production but step 4 is about the business itself. When to grow the business is most important.
Business, any business endeavor is about generating cash return with the largest margin of profit in the shortest period of time possible.
The key in each business is finding the to each endeavor is how much money will I invest, how much will it return in how long. If it is not a safe, steady cash flow with good liquidity (like the commercial real estate or discount mortgage notes) then it must have good margin of profits and a high velocity or returns.
80% of any business is marketing to increase sales whether by adding customers, selling at a higher price or selling more frequently. If we can do the three things in any of the businesses we are growing faster than anyone.
