While many young entrepreneurs are embracing a multitude of creative opportunities that come with starting a small business, a segment of the population is still set in an antiquated mindset.
They rely only on their earnings from their employer to build their wealth. Within this scenario, you limit yourself to two ways of making money: “you” at work, and “your money” at work. Of course, the financial growth that’s possible in this situation is limited by the amount of your savings that can be invested at minimal risk.
So the question is … how can you create income for yourself that comes in, whether you’re working or not, and grows over time? Here are four simple ways to get started.
1. Invest in Yourself
The most exciting way, and potentially the most rewarding in the long term, is to create a leveraged business. I believe somewhere — deep down — everyone has an entrepreneurial spirit to some degree.
You may not necessarily envision a perfect 10-year plan to expand into the global marketplace, but you have hobbies, interests, and skills that people value. Like the rest of us, you consume heavily around those areas. It’s also likely that you have experienced insight into what you deem valuable and where the market (you and others like you) is currently under-served.
Those interests and skills can be leveraged to build a part-time business that serves others and adds to your portfolio and potential wealth.
The point: Don’t strictly depend on others to take care of your financial needs. America is the land of opportunity; it’s not supposed to be the land of social security. Build on your dreams, and fall in love with the responsibility that comes with seeing them to fruition.
By taking that leap, you’re creating a third way to make money. You now have you at work, your money at work, and other people at work for you. You can take on the role of employer, or “solopreneur,” with independent distributors and affiliate networks. You can utilize your hard work to enjoy its benefits.
As J. Paul Getty noted, “I’d rather have 1% of the effort of 100 men than 100% of my own effort.” Depending on your business idea and experience level, a home-based business is an excellent starting point since your initial overhead is low. It’s also a low-risk opportunity to capitalize on small businesses tax advantages.
2. Research Small Business Tax Advantages
By opening yourself up to a new set of tax laws you can offset your earnings, depreciate certain assets and ultimately keep more of your profits. That profit can, in turn, be reinvested in the business or into whatever secondary investments you have in your portfolio. Through independent research or with the aid of a CPA, you should make it a priority to educate yourself about which laws can enable you to be a successful business entity.
3. Live Within Your Means
Perhaps the most commonsense idea, but also the hardest to realize, is living within your means. The American public spends, on average, 11% over what we earn.
With a goal of building long-term wealth, it’s imperative that you use your income and time wisely in the present. Spending above your means is a form of addiction. You should invest in yourself and pursue your ambitions.
At times, that will require making potentially risky financial moves.
4. Learn from Mistakes
It’s important that you learn from mistakes. If you have a setback in your personal or business life, it’s an opportunity to change your thinking so you can move forward with vigor.
This requires that you let go of guilt, shame, and any other negative emotions you’ve associated with taking risks. You must deal with the consequences of the past, but don’t become fixated on “What if?”
Set new goals, create new plans, and set up a larger buffer for the rainy days are bound to come. Become more focused and flexible by learning from mistakes.
Ultimately, you have the potential to generate your own income and invest in yourself through diligent and intelligent decision-making. Take the chance.
Too many people spend their days making others wealthy while they themselves are unfulfilled. The entrepreneurial mind seizes the opportunity to build, grow, and plan for the future. With great focus and flexibility, you can enjoy the pursuit of greatness.
It’s where real fulfillment comes from in the end.
Chris J. Snook has spent over 12 years as an author, entrepreneur, and venture catalyst and has spent the last 5 years in the investment community incubating media startups as the Managing Partner of TLEC Ventures. He co-authored the international best-selling books, Wealth Matters and “Burnout: How to Transform Frustration to Fortune.”