It’s simple—the wealthy prioritize passive income because it saves time.
That’s because passive income streams don’t require constant time and effort to maintain. Once they’re up and running, they require minimal maintenance to keep earning.
Let’s consider a hypothetical example…
Sarah and Jim are coworkers and friends. Jim is content to work from 9 to 5, five days a week, in exchange for his paycheck. He trades about half of his waking hours for his income.
Sarah, however, is more ambitious. She wants a more effective way to create additional cash flow.
So, she starts a business selling crafts online. At first, it’s a lot of extra work—she creates the products, makes the listings, runs ad campaigns, and even ships the items herself. But she’s creative and motivated, and her business grows.
It doesn’t take long before she earns enough from her business to hire an employee to help with the marketing and shipping. She can focus on what she loves—making the crafts!
But that extra pair of hands increases her productivity even further. Now, she can hire another employee to actually make her crafts.
Suddenly, Sarah is almost totally uninvolved in her business beyond high level decision making. In addition to her day job, it’s become a source of income that requires minimum upkeep. And she still has time every evening for her family and opening up new passive income streams!
The takeaway? The sooner you can create viable sources of passive income, the better! It comes down to matching your effort to your reward. It’s a chance to create impressive returns over the long-term for an upfront investment of time, money, and energy.
If you’re interested in opportunities to create additional income streams, check out some of our past posts on the topic.
Side Hustle expansion
Passive Income: How It Works
Start that side hustle like a pro!
For a one-on one discussion about potential ways for you to create passive income, contact us!
Scenes like the one were common to me growing up. Somehow my parents made time to take me to the library regularly despite living in the remote parts of rural USA. I’m certain the intent was not to prompt me to be wealthy one day but just to nurture a love of reading. However, reading is a common denominator among the wealthy.
One study revealed that 85% of self-made millionaires read 2 or more books per month.¹ That’s not a coincidence. Many of us have been told that reading improves our vocabulary and grammar skills, but there’s so much more to it than that! Reading can help develop traits that can provide an excellent foundation for a prosperous life and building wealth. Here are three reasons why.
1. Reading expands your perspective
Think of it like a hack that grants you access to the wisdom of others. Instead of only drawing from your own experiences and resources, reading is an opportunity to discover fresh and challenging ideas. And the more connections you make between the ideas you read about, the more creative—and valuable—you become. Now if every elementary teacher found a way to communicate that to every struggling reader in their class, think of the motivation and impact that could have on that child’s entire life.
2. Reading can curb negative emotions
Reading is good for your brain—it can reduce stress levels and prevent age-related cognitive decline.² But it goes deeper than that. It turns out that making new connections is good for your mental health. There’s evidence that reading can help combat struggles like depression.³
Why? It’s because reading can help people process difficult situations. Reading about other characters and different perspectives can help forge new mindsets and beliefs. And the more you process through difficulties, the better equipped you become to build a prosperous life.
3. Reading builds empathy
It’s no surprise that discovering other perspectives or exploring the inner lives of characters builds empathy.3 What might be surprising, however, are empathy’s benefits.
Not only does empathy lead to a richer emotional life, but it’s been shown to be critical for creating healthy—and productive—workplaces.⁴ Understanding the emotions and feelings of others makes you a more effective leader, coworker, and person.
Notice that none of these skills are directly financial—you won’t learn them in a finance or accounting course, and probably no one would pay you to read a book per month. But, as you can see, they can be critical for expanding your perspective and growing your career.
Well if you made it to the end of this post, CONGRATULATIONS! 🎉You’re already adopting a habit of the wealthy because you read this. Keep reading for 15 to 30 minutes per day for a week on a topic that interests or excites you. (Of course we here at ECV Talks would love to be that content that you’re reading. 🥰) Then slowly expand your reading time as you feel comfortable. At the end of the month, see how you feel! You might be surprised by how much your perspective has grown or shifted..
So you want to be wealthy. You’re ambitious, you work hard, and you’re ready to discover what it takes to build wealth. You’ve come to the right place.
Over the next few weeks, this blog will explore the habits of the wealthy. You’ll discover why the wealthy incorporate certain activities and rituals into their daily routine and how you can implement them, starting TODAY.
You might be surprised by what you learn. That’s because almost none of these habits have anything directly to do with how you spend your money.
But they have everything to do with building character and improving lifestyle. That’s because the wealthy are often ordinary people who reached a critical realization early on—financial success is just one element of a rich life. The more growth you experience as an individual, the more empowered you can become to build wealth.
There are plenty of exceptions—you’ll find countless people who are both prosperous and non virtuous. This series isn’t about them, and it’s certainly not for those who want to pursue that path.
But if you’re curious to discover the habits of the wealthy, keep your eyes on this blog. You may learn something you can put into practice right now that might transform your future!
Does anything sound better than being your own boss?
Well, maybe a brand new sports car or free ice cream for life. But even a state-of-the-art fully-decked-out sports car will eventually need routine maintenance, and the taste of mint chocolate chip can get old after a while.
The same kinds of things can happen when you start your own business. There are many details to consider and seemingly endless tasks to keep organized after the initial excitement of being your own boss and keeping your own hours has faded. Circumstances are bound to arise that no one ever prepared you for!
Although this list is not exhaustive, here are 5 things to get you started when creating a business of your own:
1. Startup cost
The startup cost of your business depends heavily on the type of business you want to have. To estimate the startup cost, make a list of anything and everything you’ll need to finance in the first 6 months. Then take each expense and ask:
Is this cost fixed or variable?
Essential or optional?
One-time or recurring?
Once you’ve determined the frequency and necessity of each cost for the first 6 months, add it all together. Then you’ll have a ballpark idea of what your startup costs might be.
(Hint: Don’t forget to add a line item for those unplanned, miscellaneous expenses!)
“Find a need, and fill it” is general advice for starting a successful business. But if the need is apparent, how many other businesses will be going after the same space to fill? And how do you create a business that can compete? After all, keeping your doors open and your business frequented is priority #1.
The simplest and most effective solution? Be great at what you do. Take the time to learn your business and the need you’re trying to fill – inside and out. Take a step back and think like a customer. Try to imagine how your competitors are failing at meeting customers’ needs. What can you do to solve those issues? Overcoming these hurdles can’t guarantee that your doors will stay open, but your knowledge, talent, and work ethic can set you apart from competitors from the start. This is what builds life-long relationships with customers – the kind of customers that will follow you wherever your business goes.
(Hint: The cost of your product or service should not be the main differentiator from your competition.)
3. Customer acquisition
The key to acquiring customers goes back to the need you’re trying to fill by running your business. If the demand for your product is high, customer acquisition may be easier. And there are always methods to bring in more. First and foremost, be aware of your brand and what your business offers. This will make identifying your target audience more accurate. Then market to them with a varied strategy on multiple fronts: content, email, and social media; search engine optimization; effective copywriting; and the use of analytics.
(Hint: The amount of money you spend on marketing – e.g., Google & Facebook ads – is not as important as who you are targeting.)
4. Building product inventory
This step points directly back to your startup cost. At the beginning, do as much research as you can, then stock your literal (or virtual) shelves with a bit of everything feasible you think your target audience may want or need. Track which products (or services) customers are gravitating towards – what items in your inventory disappear the most quickly? What services in your repertoire are the most requested? After a few weeks or months you’ll have real data to analyse. Then always keep the bestsellers on hand, followed closely by seasonal offerings. And don’t forget to consider making a couple of out-of-the-ordinary offerings available, just in case. Don’t underestimate the power of trying new things from time to time; you never know what could turn into a success!
(Hint: Try to let go of what your favorite items or services might be, if customers are not biting.)
5. Compliance with legal standards
Depending on what type of business you’re in, there may be standards and regulations that you must adhere to. For example, hiring employees falls under the jurisdiction of the Department of Labor and Federal Employment Laws. There are also State Labor Laws to consider.
(Hint: Be absolutely sure to do your research on the legal matters that can arise when beginning your own business. Not many judges are very accepting of “But, Your Honor, I didn’t know that was illegal!”)
Starting your own business is not an impossible task, especially when you’re prepared.
One other vital thing that makes starting your business easier is having a plan and a mentor. Register for our FREE master class happening Wednesday, August 12th at 9 PM EST to get access to both!
But that doesn’t stop “budget” from being an intimidating word to many people. Some folks may think it means scrimping on everything and never going out for a night on the town. It doesn’t! Budgeting simply means that you know where your money is going and you have a way to track it.
The aim with budgeting is to be aware of your spending, plan for your expenses¹, and make sure you have enough saved to pursue your goals.
Without a budget, it can be easy for expenses to climb beyond your ability to pay for them. You break out the plastic and before you know it you’ve spent fifty bucks on drinks and appetizers with the gang after work. These habits might leave you with a lot of accumulated debt. Plus, without a budget, you may not be saving for a rainy day, vacation, or your retirement. A budget allows you to enact a strategy to help pursue your goals. But what if you’ve never had a budget? Where should you start? Here’s a quick step-by-step guide on how to get your budgeting habit off the ground!
1. Track your expenses every day
Start by tracking your expenses. Write down everything you buy, including memberships, online streaming services, and subscriptions. It’s not complicated to do with popular mobile and web applications. You can also buy a small notebook to keep track of each purchase. Even if it’s a small pack of gum from the gas station or a quick coffee at the corner shop, jot it down. Even tiny expenses add up to sizable amounts if not tracked. Keep track of the big stuff too, like your rent and bill payments.
2. Add up expenses every week and develop categories
Once you’ve collected enough data, it’s time to figure out where exactly your paycheck is going. Start with adding up your expenses every week. How much are you spending? What are you spending money on? As you add your spending up, start developing categories. The goal is to organize all your expenses so you can see what you’re spending money on. For example, if you eat out a few times per week, group those expenses under a category called “Eating Out”. Get as general or as specific as you wish. Maybe throwing all your food purchases into one bucket is all you need, or you may want to break it down by location – grocery store, big box store, restaurants, etc.
3. Create a monthly list of expenses
Once you’ve recorded your expenses for a full month, it’s time to create a monthly list. Now you might also have more clarity on how you want to set up your categories. Next, total each category for the month.
4. Adjust your spending as necessary
Compare your total expenses with your income. There are two possible outcomes. You may be spending within your income or spending outside your income. If you’re spending within your income, create a category for savings if you don’t have one. It’s a good idea to create a separate savings category for large future purchases too, like a home or a vacation. If you find you’re spending too much, you may need to cut back spending in some categories. The beauty of a budget is that once you see how much you’re spending, and on what, you’ll be able to strategize where you need to cut back.
5. Keep going
Once you develop the habit of budgeting, it should become part of your routine. You can look forward to working on your savings and developing a retirement strategy, but don’t forget to budget in a little fun too!
¹Jeremy Vohwinkle, “Make a Personal Budget in 6 Steps: A Step-by-Step Guide to Make a Budget,” The Balance (March 6, 2020).