Posted: Friday, January 18, 2008 by Teena in Labels: , , ,

Receiving a corporate salary is the biggest setback in wealth building. Sounds strange? not if you choose that as your only vehicle to obtain extreme wealth. What is a corporate salary anyway? In layman's terms, it is a fixed compensation for the services done to a company, and remunerated to a person or employee on a regular basis. Going back to my earlier statement, the reason behind it is that our salary is fixed by our employers and any raises, if there are any are being dictated by them. In other words, we won't get rich unless our employer decides that we can. Sadly, I think there is not a single employer in this period that will make their employee rich. Being an employee under a salary is stable and people like the idea of being stable. But in order to develop a millionaire-mindset, you must get away from the perception that your salary is the only means of having an income.

Being a salaried employee is not a bad thing. You can use the experience to learn and acquire new skills and have earnings to pay the monthly bills. It is just that you should not rely on your salary alone if you like to become rich because your employer will only give you a decent living, and not to become rich.

The salary on a per hour basis is higher for those in private practice like those doctors, lawyers, and all other similar high paying service professions that make a decent living. They aren’t what we consider rich by their professions alone. That is because they are still trading their precious time for money. You might ask, what's wrong with that? It is because we only have limited amount of time in the day to monetize. And another problem is when they stop working, income stops too. This further means that if they become sick or out on a vacation or get injured, all the source of income will eventually be gone to the drain and they can't trade their time for money. This will put a lot of pressure on these individuals to stay a lot busy than usual. That leads me to the point that being self-employed means you are trading time for money while being a business-owner means you are using the power of leverage.

Just what is leverage? Business-owners are the wealthiest people on this planet and most of them do not have any formal college education. A very good example is Bill Gates, the founder of Microsoft, who is worth more than 20 billion dollars as of this writing. He dropped out of Harvard University and founded his own company. Business-owners use the power of leverage. The power of leverage means that they get more from their own hour of time than the self-employed or the salaried employees. What Bill Gates did was he developed a computer operating system which he licensed out. All his efforts were gathered to create one product that is worth a lot to its buyers and he profited tremendously from it.

But this does not mean that you have to create a software to become rich like Bill Gates. In the service arena, smart service professionals start hiring others to provide the services they need and get a commission out of the profit, thereby creating value for both the service provider and the customer. That is leveraging services.

A business-owner looks for multiple streams of income. He/she is not just contented with just one profitable business to begin with. He will look for ways to connect one business with another. In the case of employees, they believe that they have security in their job, but if there will be layoffs, recession or getting fired in the process, security and all flies out of the window, all the level of security will be gone as fast as it was attained. A business-owner might lose one of his streams of income, but still has others to work off of. This is called safety in the real essence of the word—having multiple streams of income.

Risk taking. Entrepreneurs and salaried employees both have to deal with failures, so you might as well face the fears in a confronting manner because eventually it will make you grow both personally and professionally. Smart entrepreneurs are not afraid to take that risk, knowing that it will bring them one step closer to success. You must be willing to try new ideas and to step out of the box. Look for additional ways how you can make more money and not just talk about it. Just do it. That is one of the most powerful concepts that make people millionaires, that is, the ability to act at once.

Key Points. Do bear in mind these practical key points that may be of use to you:
* All of us have the same amount of time during the day and we can only sell so much of our time.
* If you exchange your time for money, the best that you can do is to earn a decent living. Nobody gets rich in this situation.
* Find more ways of leveraging what you do to get more out of your time and therefore more money will come in.
* Create passive income by way of products or software or other investments that will produce a positive cash flow to create multiple streams of income.
* Don’t wait for the perfect time because it will never happen. Act now, even if your plan is not perfect.