It is amazing how many people, young and old, know nothing about it.
How many people do you know can say they have all that? I’m sure none of them can say that yet. When we were young, many of us dreamt of those times when our money or our business would work for us and we would just sit down
and relax.
As time goes by, most people get used to being paid according to what they earned. This stereotype is formed by jobs with hourly rates. There is a fixed rate. When you work for one hour, you get that rate. If you have worked 10 hours a day, you get 10 times that rate. If you worked well, your boss may pay you a bonus.
This income is called linear. Linear income may be compared with a spade. As soon as we stop digging, we find ourselves in a pit of debt that no one, except us, is going to pay. So we have to run around in circles to stay afloat.
Your market rate depends on how valuable you are as an employee. With additional work experience and a reference letter you may ask for a raise. With a degree you can earn not $5 an hour, but, say, $30. But this is still linear income.
Those who exchange time for money face two obvious problems. The first becomes particularly noticeable at the time
of hardships and bad luck. Health conditions, age and competition from more experienced or younger people may make a person lose his linear income in just one day.
The problem with linear income is that it is unprotected. As soon as you have no time, health or energy or if the employer's goals change, you will no longer be needed.
The second problem is less obvious, but more serious. People who choose linear income cannot reach their personal and financial goals. The employer decides everything for his staff – when, where and how. The employer also manages his employees and affects their lives to achieve his own goals.
Having chosen the other income model, i.e. residual income, people make their own decisions on what to do.
Residual income is like a conveyer belt, which works for us even without our direct participation. Ask any wealthy person what he thinks of linear income. You’ll hear something like this “Linear income is the hardest way to become rich."
In the next lesson, we'll talk about how you can start a business that will provide you with an additional source of income, just as we have done. It is founded on a simple system, which makes it possible for anyone to have their own business. It isn't based on pressuring customers to buy, and best of all, it doesn't take much time to set up.
