There is a principle of wealth that can make you extremely wealthy once you understand it. It’s actually made up of three pieces and called the wealth triangle.
Let’s have a look at each corner of the wealth triangle…
High-Income Skills
The first corner of the wealth triangle is about developing your high-income skills. A high-income skill is defined as a skill that has the potential to make you over $100,000 a year. In this case, you are selling your time for money. But you are selling it for good money.
Examples of (what can be) high-income skills are skilled labour, copywriting, design, coding, consulting, marketing, etc.
Developing a skill like this gives stability to your life. Because the skill is not easy to learn and once you master it you will possess something that can’t be taken away from you.
A Scalable Business
The next corner of the wealth triangle is a scalable business. This is defined as something that you can grow without a lot of infrastructure. It could be an internet-based business, service or appication.
While a high-income skill provides you with income your scalable business, if set up correctly, will provide you with cash flow. The cash flow should rise as you continue to scale.
High Return Investments
This is the last corner of the wealth triangle. Here we define a high return investment as an investment that will provide you with an annual return of at least 10 percent year in and year out. This is a big goal that requires you to take some risks. But it is a goal that everyone can achieve.
The ultimate purpose of high-return investments is to build your net worth. You should not look into high-return investments before your scalable business makes so much money that you basically don’t know what to do with the cash coming in.
Many people start investing before they have built the proper financial foundation. Let’s say they invest in real estate. Their margins may be so small that they will have to go into foreclosure if a tenant unexpectedly moves out. Then instead of learning a correct lesson from that experience, more often than not they will conclude that “real estate doesn’t work.”
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