IT'S EASIER TO GET RICH QUICK!

As you all know by now, this show is all about value. It's in the name, it's what the content is all about, it's mentioned in every single episode, and it's one of the most consistent theme words in my own life. At the end of every year, I contemplate on the prior year's successes and failures, lessons learned, wisdom gained, and what I want the next year to look and feel like. 

A common practice is to pick a word or words that help to set the tone for the year ahead as a way to create something of a homebase. The words are like a mantra you can say whenever you’re feeling a bit lost to help remind you of what your intentions were at the beginning of the year. Every year for at least the last twenty, one word has come up consistently and that is the word ‘value’, as in; in everything I do I want to do my best to deliver the highest level of value for the people investing in me with their time and attention, as well as their well earned dollars, and I want to help them create as much value as humanly possible. 

We talk about value on this show in some way every single episode and, so, I thought it fitting to kick off season 8 with a show exclusively about value. However, what we're talking about in this episode are the four levels of value that income and wealth are created in so that you can assess what level(s) you are currently operating in and then whether or not you want to ascend to higher levels of value in order to create more income and more wealth. 

To be clear, money and wealth are two different things, and life is not all about money, but it is all about wealth. As we’ve talked in past episodes, there are a variety of forms of wealth, most of which don’t include money. There is health wealth, time wealth, relationship wealth, spiritual wealth, impact wealth, social wealth, inner wealth, and, of course, financial wealth. The famous author, Henry David Thoreau, said, “wealth is the ability to fully experience life.”

Having lived in a Zen monastery for some period of time and having studied a variety of other belief systems, the idea that wealth comes in many forms not is not a new one. Sages, mystics, prophets, philosophers, and truth seekers have been teaching on this idea and belief for thousands of years. However, let’s not get it twisted, without financial resources it can be difficult to operate and move freely in the world. 

Money is a form of currency, and the root word of currency comes from the Latin word, ‘Currens’, which is to run or to flow. Money is a form of currency in that it is meant to travel and flow between people and businesses so that the people and the businesses can continue to move and flow. When the current stops, the people and the business stop. In my opinion and experience, life is better spent having experiences, good health, good relationships, adventures, and good social interactions, all of which can be had mostly without money, or at least without needing a lot of money. 

So, if life is not all about money, but it is all about wealth, how do we reconcile that idea so that we can have an ample amount of both to do the things we want to do and live the life we want to live? It helps to first understand the basic differences between the two. However, that in itself deserves a whole episode so, to tie the two concepts together, we can settle on the concept of time as a unifying principle. You see, most of us don’t work to make money just for money’s sake. We work to make money to buy back our time in all of those areas of wealth I mentioned earlier. 

Money helps us buy better food so that we can be healthier. Money helps us buy gym memberships. Money helps us have vacations that improve our lives and help us have more experiences. Money allows us to travel and see friends and family and have a robust and fulfilling social life. The degree to which you have the resource of money is the closely tied to the degree to which you can enjoy all of those forms of wealth. 

“But I thought you said we could do all of that without money, Blaine!” To be clear, I didn't  say you can do all that without money. I simply said that life is better spent having experiences and adventures, all of which can be had mostly without money. However, since the marriage of money and time is one of the main concepts that tie finances and wealth together, we need to talk about the 4 different levels of value one can deliver to create both money and wealth, and I’ll do my best to explain with each level of value how time is the unifying factor. 

The four levels of value, I affectionately refer to as D2C2, are doing, directing, communication, and creativity. I want to point out that the first two are activities, the second two are skillsets, and I’m pointing that out now because it’s an important factor in this whole understanding of money, wealth, and value. 

The first level of value we can offer the world is ‘doing’. As the word implies, it means the doing of something. It means our physical labor as a value offering, and the value given back is typically in the form of money. You do something physically and you get paid commensurate with the value of the doing. If you pick up sticks in someone’s yard, or maybe mow their lawn, they typically pay you for that activity and the amount paid is relative to the amount they could pay somebody else to do the same job. 

Appraisers, listen closely. Most of you are ‘doing’ on a daily basis. You’re doing something physically and you are rewarded commensurate to the value the market for that service believes your value is worth to them, not to you. I see lots of misunderstanding in industry forums where somebody is bemoaning the fact that they were getting paid $X back in 1980, and still only paid $Y today, which doesn’t even keep up with inflation. 

Sorry friends, that's not the way any of this works. That’s an entitled attitude and has no place in business, nor in the world of making money, generating wealth, and creating value. You don’t get paid just because you’re old. You don’t get paid more just because you’ve hung around for 20 or 30 years doing the same thing. You don’t give pay increases to employees just for doing the same thing year in and year out. Pay increases should come as the result of more value being offered, which is what garners the increase. 

The disconnect in this regard is that the person who feels entitled to some kind increase just for hanging around simply adds to the collective ignorance around this topic, not to mention that it totally disregards the perceived value in the eyes of the person or company’s paying for the thing. The customer gets to determine the value to them and, in return, are willing to pay a price commensurate with the degree they see that thing as valuable to them. Low value, low price. High value, high price. 

Here’s the thing about this first level of value: it’s the lowest level of value and will almost always be the lowest paid on the value spectrum. The person doing the doing will almost always be paid the least out the four levels of value. Why? Because they are trading a limited resource for an unlimited one. The person doing the doing is utilizing their time and physical resources in exchange for money. Both of the resources being utilized, time and muscle, are limited. There is only so much of them available to us before we eventually have to sleep, eat, rest, and recover. There are only so many hours in the day and, once you reach either the last hour or the last ounce of physical energy, you’re done. 

Any time you try to trade a physical resource for a non-physical one like money, the amount of both must be limited to the degree that the physical resource is available. Work 2 hours, get paid for 2 hours. Work 12, paid for 12. It’s a simple equation. The problem is that the physical resource, ie. your time and your body, will eventually wear out even though the non-physical resource doesn’t. Money keeps flowing day and night regardless of how much energy you have or how tired you are. 

The second level of value is what I call ‘directing’. Directing is management of other resources. The manager, in most cases, makes more than the doers. Managers of things are typically orchestrating and overseeing some result being created by more than one person. The manager is managing the time and physical labor of the person doing the thing, that’s why they typically get paid more. Yes, they too are typically trading their time for money, but since they’re overseeing the one’s doing the thing, the result that’s created from their management is typically greater than simply the sum of their own physical effort. 

For example, you can be the one mowing the lawn and get paid $18 per hour, or you can be the one managing 5 lawn care crews and make $25 per hour because the total value from the 5 crews is a greater value than what one guy standing behind one lawn mower can create for the company. 

The important thing to understand with both the ‘doing’ level of value and the ‘directing’ level of value is that it is very difficult to create wealth at these two levels. It can be done, for sure, but it will take a lot longer than in the next two levels. The guy who mows the lawns could be very disciplined with his money and be a savvy investor who eventually ends up wealthy financially from his investments. It’s more likely, however, that the owner of the company gets there first because of that one vital component: time. The owner benefits from everyone that works for her trading their time for her dollars. She likely makes more because she’s operating in a higher level of value. 

Let me also plant this little seed in between the first two levels of value and the next two levels of value so that it has time to germinate. The seed is this: It’s easier to make a lot of money in a little bit of time than it is to make a little money over a long period of time. Almost everyone earns enough money to be rich financially, they just don’t earn it fast enough for it to make them wealthy because they’re busy trading their time for money for too long, and most people increase their lifestyle along with any increases in income, so they never really get ahead. 

If you make $25,000 per year for 40 years, you’ve earned $1,000,000. If you make $40,000 for 25 years, you’ve earned $1,000,000. If you make $100,000 for 10 years, you’ve earned $1,000,000. And if you earn $1,000,000 per year, well, you’ve earned $1,000,000. Which one of those is the best option of the four? There’s only one answer and it’s that, all things being equal, the $1,000,000 per year is the best, not necessarily because it’s the most, but because it was earned in the shortest amount of time. The speed at which the million dollars was earned creates infinitely more opportunities than trying to accumulate $1,000,000 over 40 years, 25 years, or even 10 years. 

The problem with always trading your time for dollars is that the bills have been coming in steadily over all of those years and you’re never really able to get ahead of them. As your income increases, typically, so do the bills. Not to mention, you always have to give up our time first before the income comes in. You’ve given two weeks of your time to the boss, and only then do you get paid. In the next levels of value, we’ll talk about why it’s better to put in a little bit of time, but then get paid over and over and over. 

The next level of value is what we simply call ‘communication’. At this level of value, the ones with the greatest communication skills tend to dominate their field, their industry, their business segment, and their market. This one is pretty simple: if you want to make more money in less time, learn to communicate at a high level. 

Sometimes I’ll interchange the word ‘content’ with ‘communication’ because, when it comes to this level of value, content is what we’re really talking about. I know a fair amount of really good communicators who still struggle in the ‘doing’ category because they don’t turn their communication skills into content of any kind, and they don’t believe they have anything special to say to the world. If you have decent communication skills and can apply those skills to creating content of some kind, the world is your oyster. 

Think of this level of value from the standpoint of every type of media you consume on a daily or weekly basis. The news, books, music, podcasts, tv shows, movies, plays, etcetera. All of those are forms of content, and the people who produce that content typically have more opportunities available to them than the people in the ‘doing’ and ‘directing’ categories. I can tell you from personal experience that podcasting has opened more doors financially for me than almost anything else I’ve done in my 53 years on this planet. 

When you create content, you’re potentially creating what we call an asset, and income comes from assets. You’re an asset, in a sense, because you use whatever knowledge, experience, and skills you have to earn income. The problem for most people is that they are their only income producing asset. You never want to be your only income producing asset because what if you are unable to produce one day. 

When it comes to the ‘doing’ level of value, which is what the majority of the world lives in, the whole thing is set up on the premise that you’re going to be able to consistently and productively do the ‘doing’ in whatever you do for about 50-60 years or so. Well, what if you can’t or don’t want to? If your only income producing asset for your whole life is you, you have to really hope that nothing ever gets in the way or prevents you from being able to do the ‘doing’. However, if you have other assets that can do the ‘doing’ for you, then you are moving to the levels of value that wealth creation lives in. 

Of course, income producing assets come in all shapes and sizes. You can buy income producing assets and never have to create a stitch of content, ever. That’s where you trade your time in the doing or the directing levels of value for dollars, but then you trade your dollars for other assets that can produce income for you while you sleep. I’m all for this method, by the way, because it’s the most common and the most accessible to the average individual. 

Creating content isn’t easy. Then again, neither is owning and managing a bunch of rental properties. Almost everything that could be considered an asset that produces income for you is likely going to take some work. It’s really up to you to decide what kind of effort you want to put into something that produces income for you over and over and over. 

The other category of assets we’re talking about in this level, however, are assets created from your communication skills. Books, videos, podcasts, music, classes, coaching, and the list goes on. You deploy your communication skills to create something that lives forever and it becomes an asset for you that delivers additional value back to you in some form. The value it delivers back to you can be in the form of actual income, it can be in the form of notoriety and authority, it can be in the form of opening up doors that would otherwise not be open to you, and so on. 

When it comes to income producing assets, the rules are pretty simple: you can either buy them or you can create them. When it comes to this level of value we’re referring to as ‘communication’ or content, you create your income and opportunity producing assets based on your wisdom, knowledge, experience, viewpoint, and ability to communicate that in some way. Those who can communicate well in some form or fashion typically earn more than those who can’t communicate well. Those who can communicate well, and also know how to create content around their area of knowledge and that content helps other people solve some kind of problem, typically earn more than someone in the doing and directing categories. 

The last level of value we’re talking about in this episode is referred to as creativity. The third level of value is communication, the fourth level is creativity. In essence, the ones who come up with the best ideas tend to create the most income and also the most wealth. No need to spend a bunch of time and words on this level of value. It’s quite simple: the most creative people tend to earn the most income and generate the most wealth, especially if they have the ability to communicate well.  

If you need examples for this category to give it some context, just think of some of the most successful companies you know and then see what names come to your mind. If I say Facebook, most will think Mark Zuckerberg; if I say Apple, you’ll think of Steve Jobs; if I say Microsoft: Bill Gates; if I say Harry Potter, you think J.K. Rowling, and so on. In some of those examples, the ones remembered aren’t even the ones who created what we know today as those companies or products, or at least not the sole creators, but they were definitely the most creative of the founders and are subsequently known for Facebook, Apple, and Microsoft. 

Four levels of value that income and wealth are created in: doing the work, directing the work, communication skills and content, and the final level of value being creativity and imagination. Know that you don’t have to exist in only one level of value. My income, for example, emanates from the doing, the directing, the communication, and the creativity levels. The goal is to get to the point where you’re doing less doing of the actual work, less directing of others to do the work, and spend more time in the upper levels of value and wealth creation, which are the communication and creativity levels. 

Just know that having an understanding of the four levels is the first step. The second step is to chart a path to the next level and then take action. If you’re the doer of the thing, see what a path might look like to move to the directing level, or even jump to the communication and/or creativity levels. If you’re at the directing level and want more, you can either move up the directing ladder and direct at higher levels, or you can start working on moving into the communication level.

The main point in sharing this with all of you is simply to give you another perspective on income and wealth, to get you thinking about where you are now relative to where you may want to go and grow, and to plant the seed, once again, of the power that can come when you increase your ability to communicate through content and creativity. 

Don’t get me wrong, there is nothing wrong with the doing and directing levels of value. I’ve lived and worked in the doing and directing levels for many years and have derived tremendous pleasure and growth from all of those experiences. To this day, I really miss the experience of working with my hands that being in the mechanical contracting business afforded me. Some of my greatest growth experiences and fondest memories still come from using my hands and body installing furnaces, air conditioning systems, and boiler systems for several years with my family’s company. 

When you learn to take a raw piece of sheet metal and turn it into something useful that nobody would ever know it wasn’t created in a factory, you understand the power of creating something with your hands and there are very few other things that can take the place of that knowledge, ability, and experience. But, here’s the point as it relates to this show: although I miss working with my hands and learning new things in that arena, no matter how skilled I got, I would always reach a ceiling when it comes to income and wealth because I was my only asset. If I called in sick, I didn’t earn any money. If, one day, I can’t cut and shape the sheet metal any longer, my ability to earn in that industry is capped. 

I worked with guys who were in their 50’s and 60’s still tearing out old furnaces and working with their hands to install new ones that I still have a lot of respect for. Somebody has to do that work. I just realized that I didn’t want to have to rely on my hands and body to be my sole source of income that late into my life. Nothing wrong with working hard. The idea, however, is to put yourself in a position where you get to choose what you do each day and not have a ceiling on what you earn or how you earn it.

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