Which Income Model are You Working Under? (The Intrepid Way)

8/3/2019 Which Income Model are You Working Under? (The Intrepid Way)

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Which Income

Model are You

Working Under?by Matthew S. Chan

(Excerpt from The Intrepid Way)

In the early 1990s, I was becoming wellestablished professionally and academically. I hadalready achieved what I thought was appropriate forthe time. I had received my Bachelors Degree inBusiness Administration, I had a good position at agood company working for a reasonably good salary,

I had earned technical certifications in my field ofexpertise, and I was getting two nice vacations a year

I began to think to myself, What do I donext?

I thought about starting my own business,but I didnt feel prepared for it mainly because Inever received any training or education in how tostart my own business. I was only taught how to bean employee in someone elses business in college.

Therefore I thought I needed more business-oriented education. What seemed to be the nextlogical step for me was to get my Masters Degree.So for two years, I worked full time during the day

and went to school nearly full time at night to earnmy MBA. Because it had taken me seven years to getmy Bachelors degree, I had no intentions of taking alengthy amount of time to get my Masters.

I then completed the MBA program andearned my graduate degree. While I did think I wasbetter off for the experience I really didnt feelany more equipped or qualified to launch my ownbusiness than I did two years earlier!

It then occurred to me the reason why thatwas! They didnt teach me the skills of entrepreneurship a very special breed of business.All the education I received was provided by teachers

who were employees themselves and thepurpose of the education was to teach us to be evenhigher paid employees! They did not teach us how to become better entrepreneurs; they taught us to bebetter corporate and professional employees.It was this realization, in addition to my growingdiscontent with working as an unappreciatedemployee that eventually led to my departure fromthe corporate world later that summer.

Even as I had launched my own businesslater that year, it took another three years of workingas a highly paid self-employed expert before Irealized that what I was doing and the model I wasworking under was fundamentally flawed for what Iwanted to achieve in my life.

The biggest flaw I was working under wasworking under a Limited Income Model. I realizedthat my income was entirely labor-based. If I stopped putting my labor in, my income would almostimmediately stop.

But I was also limited on how much incomeI could make because what I got paid was largelybased on how much time I put in. It didnt matterwhether I got paid by an hourly, weekly, or projectrate it was all the same. It was all based on howmuch production that I alone could generate. Andunfortunately, that limit was often reached veryquickly.

That is why achieving a six-figure income

for most people is still so highly regarded whetheryou are an employee or self-employed expert. It isrelatively a great challenge for most people to getsome employer or person to agree to pay you a six-figure salary year after year. You have to demonstratea very significant value for a company before thiswould ever occur.

The interesting thing is that if I wanted asix-figure income, I knew what I had to do. I had towork much harder and to work more hours! I had tobe willing to sacrifice more of my personal time andenergy.

The problem was, based on my calculations,

I would still have to work well into my 50s toachieve personal freedom and comfortably maintainthe lifestyle I wanted.

And once I got there, how long could I holdon to that six-figure income? Many people in recentyears found out the hard way that it is one thing totalk someone into hiring you at a great salary; it isanother thing to talk someone into keeping youindefinitely.

Many fallen angels have learned this hardlesson after being thrown into the streets bydownsizing or bankrupt companies. Regardless,many still cling to the old ways. They know of

nothing else to do!During this time, I realized that if I

continued with my way of thinking about trying tonegotiate better salaries and better contractor rates, Iwould make a better living but I wouldntnecessarily live a personally freer and more enjoyablelife.

I would be like many other higher-incomeworkers I saw: own nice cars, have a big house, andan even bigger overhead to support. They would

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continue to grind for 40 to 60 hours a week tomaintain that lifestyle until they were 65. And if theyever stopped working for any length of time beyondtheir predetermined vacations their livelihoodswould come to a speedy end.Many people have learned the hard way what itmeans to not have income layers and workingexclusively under a limited income model.

In my view, having income layers is asignificant step to gaining personal freedom. And ifthat is all you did, you could lead a very comfortablelifestyle.

However, part of generating streamingincome is creating incomes that have few or noincome limitations.

The reason so much conventional advicetoday stresses on saving money is because theadvisors own income is in fact limited and scarce.There is only so much income that one person cangenerate. There is an artificial cap based on what an

employer will agree to pay for one persons servicesand labor. But can you blame them? After all, there isa limit to how much labor any one person can put in.That is why you may hear people taking on second jobs yet at the same time you rarely hear ofanyone with a third job. There simply is no more timeand energy a person can put in for a third job.Ultimately, their time and their income are limited.

The ability to increase your income andcreate income layers is largely determined by theunderlying system that you are building on.

For example, when I buy investment houses,I do not depend solely on my own ability to qualify

for financing. The reason for that is because it ismuch too limiting. I can only qualify for so manyloans before a lender will stop me from purchasingmore properties. Lenders are risk-averse. They wontrisk that I could lose all the properties and go broke.In reality, what are the chances of every tenantpicking up and leaving my investment properties theyhave called home? From my point of view, it is veryslim chance indeed.

As such, I find ways of financing that do notrequire my own credit and borrowing power. I useowner-financing, as well as financial partners andinvestor financing. There is no limit to how many

owner-financed properties I can take on just likethere is no limit to the number of financial partnersand investors I can potentially work with. Therefore,I do not have a limit to how many investmentproperties I can buy.

Another example is that I prefer online businesses to physical storefronts. Physicalstorefronts require too much capital and physicalmaintenance. While there are certainly physicalaspects to every online business, online businesses

reach a worldwide market and can be in operation 24hours a day, 7 days a week. The actual attendanceand support on the backend of an online business canbe controlled at your discretion. However, the digitalstorefront that people see on their computer screenscan continually accept orders and payments all dayand night.

Online businesses are flexible enough forme to sell $500 items as easily as a $5 item. Thework involved to sell either is relatively the same.Thus, I can generate far more revenue moving thesame amount of merchandise with the same amountof work. Please keep in mind that this is only onesimplistic example of thinking and working outsideof a limited income model.

I like the publishing business. For example,this book that you have in your hands was writtenonce. However, the potential reward for this book canlast a lifetime through book sales and enhancedpersonal credibility. I can be paid over and over again

for a onetime piece of work. Whereas I would neverconsider being a newspaper writer the reward forone newspaper article usually results in only onepaycheck.

Ironically, so many college graduates havehad to write term papers, but they have nevermanaged to put those skills to work for them. Inmany ways, this book has been easier to write thanmost term papers because there are not many set rulesor formats that must be used within a book. I havesome artistic and creative freedom here. And yet, thisbook has the potential to live on even I after I amdeceased. It is all in how you see things and how you

apply your skills. I am an author, yet I do notconsider myself a writer much less a very goodone. My editor helps make my words sound and flowbetter.

Likewise, I consider many aspects ofwebsites a form of online publishing. You do it once,but it continues to live on and produce for you.

Prior to writing this book, I produced a fewaudio programs for business associates. But I neverworked for a fee. The problem with working for a feeis that you only get paid once. I would simplyproduce the programs for free in exchange for theopportunity to sell and promote their products but

also create goodwill with them for my future projectswhen I may need their assistance.

The opportunity to sell and create goodwillis unlimited. Simply getting paid for my labor andtime is very limited.

At the center of most unlimited incomemodels is your ability to sell. Whether you are sellingyourself, your products, services, or credibility, yourability to sell and reach out to the marketplace is paramount. Unlike what they taught in school,

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salesmanship today is not about cold-calling or beinga used car or door-to-door salesman. It is about yourability to communicate, demonstrate, educate,captivate, inspire, and motivate.

The examples I have given you are but avery few ways that I work in an unlimited incomemodel. There is no limit to how many of these typesof projects and businesses you can take on becausethere are always ways to accommodate the growth whether it is through hiring others, automation,computerization, investors, or partnering.

Unlimited income models allow you to notonly give yourself personal freedom; it allows you tobecome wealthy and even rich! While you havethe option to cut expenses, unlimited income modelsactually work better by increasing your expenses. Ifyou increase the right expenses, you can actuallygenerate far more income than if you were simplybeing stingy or frugal.

Limited income models allow you to be

comfortable; rarely will it allow you to be rich. Infact, that is why the emphasis on cutting back onexpenses is so important. There are simply fewoptions.

The questions I generally ask myself in anyproject or business I work on are as follows:

1. How much personal time and energy do Ihave to put in?

2. How much money do I have to invest? Howmuch can I use of other peoples money?

3. What is my payoff? Is it financial rewards,credibility, or goodwill?

4. How much of it will I get in return? Howoften will I get a return? Is it only one time,many times, or infinite?

5. How much do I have to put in to maintain it?Weekly, monthly, annually?

6. How scalable is it? Are there ways to growit without requiring much of my personaltime and energy? Can I outsource it?

If I must use my personal time and energy towork, I generally work on projects that haveunlimited income potential with many types ofpayoffs (financial, credibility, goodwill).

Matthew S. Chan is theauthor of several businessbooks including The Intrepid

Way, The TurnKey InvestorSeries, and The TurnKeyPublisher Series. In additionto being an author, Matthew

currently oversees the management of hisInternet business, property managementcompany, and publishing firm.

Matthews educational background includes aBachelor of Science in Business Administrationfrom University of Central Florida and a Mastersof Business Administration from WebsterUniversity. Matthew can be found at

MatthewChan.com and AscendBeyond.com.

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Which Income Model are You Working Under? (The Intrepid Way)