Growth principle #3 is to make money while you sleep.
Concept:
Growth in a business means making more money while you sleep. Successful people often work hard to maximize their time, expertise, skill and influence in an organization or business. Billionaires and millionaires invest to maximize the amount of money they make while they are not in the office or working. You can adopt the same strategy by taking the following steps:
Adopt a new definition of the term “asset.”
In accounting, an asset is a resource owned or controlled by a business or person that is expected to provide future economic benefit, such as generating revenue, reducing expenses, or increasing cash flow. Examples include a car, house, equipment, or business.
New Definition – an asset is anything that is profitable, puts money in your pocket, and currently generates positive net cash flow. Examples include dividend producing stocks, real estate with positive cash flow, or products and services with positive earnings before interest, taxes, depreciation, and amortization.
Using this definition, your primary residence is probably a liability and not an asset (you put money into house maintenance, taxes, upgrades, etc.). Same can be said about your boat, vacation home, and cars.
Acquire assets, not liabilities, and find ways to turn liabilities into assets.
Buy companies that are profitable on day one versus turnarounds. Get rid of unprofitable clients, products, services, and markets. Image you own a car, which is a liability. But if you use that car to become a ride share driver, and it generates positive cash flow, you’ve turned your liability into an asset. If you expand or pay someone else to drive your car and generate positive cash flow after expenses, then you are making money while you sleep.
Create multiple streams of income.
Increase revenue and profit while reducing financial risk by adding multiple streams of income. Consider the following to get you started:
- Dividend Stocks
- High-Yield Savings & CDs
- Real Estate Investment Trusts (REITs)
- Rental Properties (that you don’t manage)
- Royalties (books, music, digital content)
- Car Sharing
- Space Rental
Reflection:
How much money do you make while sleeping?
Action Step:
Every year, develop one new way to make money while you sleep.
