Have you ever wondered why rich people become richer? And why do those who work profusely day and night make a living just enough to get by?
Dan Lok, a famous and successful entrepreneur and global educator, shared a personal strategy from his 15+ years of financial business experience. This strategy is what he called “Wealth Triangle Strategy.
Let’s talk about the three main concepts of the Wealth Triangle Strategy, and discover why entrepreneurs swear by these concepts as well.
Wealth Triangle Strategy
The Wealth Triangle Strategy consists of three main concepts namely (1) High-Income Skill, (2) Scalable Business, and (3) High-Return Investments.
High Income Skill
The initial piece of the Wealth Triangle that allows you to exchange your time and skills for a huge sum of money. You can get paid at least $10,000 (or even higher) for your extraordinary skills that not everyone can manifest.
The best examples of these are copywriting, email marketing, graphic designing, video editing, and many more to mention!
The skill set you possess enables you to enjoy all kinds of freedom and fulfillment without having to endure office superiors or bothersome workmates. You can work anywhere, anytime, and sustain a reliable source of income unlike regular jobs that pays you a fixed price.
In fact, it is even valuable during an economic downturn when it seems like everyone has been laid off from work while you don’t get affected as much.
Scalable Business
You can leverage your high-income skill by opening a business, and scaling it. When we say to ‘scale a business’, it is a characteristic that allows your business to cope up with a sudden change, expand workloads, and increase the demand and resources.
This second piece of the Wealth Triangle is something that wouldn’t impose much effort in finding the right infrastructure, paying too many employees, and spending time in signing a long lease.
Think of it just like an e-commerce store. You don’t necessarily have to pay for rental fees, construction work, and even hiring a lot of people. Yet, you’re earning the same amount of revenue or probably even higher considering the time we’re in.
This can guarantee you a regular cash flow with or without your presence.
High-Return Investment
The final piece of the Wealth Triangle is the High-Return Investment which is an asset that can help you generate at least a 10% growth minimum.
In other words, this is most beneficial to build your net worth not income. When we say net worth, it goes on with an equation
Assets – Liabilities = Net Worth
But the key is to make your money work for you, not the other way around.
How Should You Apply the Wealth Triangle Strategy?
It’s simple as starting in the first piece – applying the high-income skill, and definitely not skipping it. If you thought about putting up your own business without any savings to pay for the capital, and no experience in the field that you’re going to chase after, then how would you think it’ll work out?
It simply won’t. Because it’s either you’re going to get immersed in debt or you don’t start the business at all. In the end, you cannot find the path of financial success.
This is why it’s important to learn and master a skill, and earn premium income that would suffice your expenses, and keep your savings loaded. Even if you had the best idea in the world yet you’re inexperienced, and have one to help you, it’s going to leave you in an empty spot.
On the other hand, once you find out what type of ‘high-income skill’ you’re most effective at, take time to earn and save in order to leverage the skill in your business.
Take for example the role of a social media manager. You’re handling all the advertising and marketing promotions of a certain page or an e-commerce store. You know how to drive traffic, and especially engage with the customers.
Now, you thought of something creative, something that helps you make more money in the long run. Since you do know how digital marketing works because of your skill, then be assertive that you can apply these skills for your own good.
Not only have you earned a certain amount of money to start your own business, but you were able to make use of your skill to effectively apply it in your business. Two birds in one stone it is!
Once you’re earning from your high-income skill, and generating revenue from scaling your business, now is the time to think about where to spend, invest, and grow a large sum of money.
Real-estate investment sounds good, and so does investing in corporal stocks and shares.
However, isn’t it beneficial to think of something that would generate you a high-percentage of revenue just like focusing on Marketing? Invest in marketing, and get at least 2000% of return of investment (ROI) instead.
It’s a matter of personal choice
The funny thing is, you can start off working using your high-income skill, skip scaling a business, and go after investing immediately.
If you’re earning around six-figure money from your current commission-based project or work, then there’s no need to divide the time in opening up your own business just to make the same amount of money. You’ll be surprised with how much more you can make when you focus entirely in two pieces of the Wealth Strategy Puzzle. Yet, it’s all on you.
The key lies in the first step, and moving forward based on your own capability, experience, and decision. The principle that Dan Lok used is “Income is King”. The whole strategy is designed to accelerate your wealth building process, not making it hard for you to make a living.
What about you? What are your thoughts in this?
