Wealth Creation – How To Create Wealth Using Financial Intelligence
When it comes to creating wealth it seems everyone is looking for an easy way out. Well, I am here to tell you that there simply is not one. There is no such thing as money for nothing, however, ways we can work smarter, as opposed to harder do exist. I first came across the term financial intelligence, during the stock market boom of the 1980's, when people were making vast sums of money relatively easily and in a short space of time.
These people were trading property as if it was some sort of hot commodity, like an Ipod is today. They had basically struck upon a certain formula which allowed them to leverage the power of supply and demand and create wealth like never before. Honestly, it was like selling shovels to gold miners and being the only shovel seller in town. Hence the term financial intelligence
Nowadays, if you want to create wealth you do need to be a little savvy in terms of being able to spot a lucrative venture. It seems the art of this revolves around finding business systems which have very low overheads and high profits. It is an age old formula, used first by the original currency inventors of the world, but it never ceases to amaze me the amount of people who miss it and cannot recognize it, even when it is staring them in the face.
The Internet is one such example, which, if you are savvy enough, offers the business person a huge opportunity to manufacture and deliver a product at virtually no cost. Therefore the markup in profits becomes immeasurable. The example which follows show why. Take this hypothetical scenario.
I don't calculate any hourly rate for myself, but I then go and spend three days, say from Monday to Wednesday, 16 hours each day writing, an ebook on how to strip down a BMW model 320i car engine. I then spend another day editing, packaging (sourcing and supplying graphics) and supplying references, getting copyright and disclaimers written up, and submitting my book to the various Internet book stores for sale. The book sells for $20.00 and I collect 25% commission ( $5.00) per sale. I sell 100 copies world wide in the first week, 200 copies the 2nd week and 300 copies the 3rd week. After this I stop counting. The formula is something like this.
5 days @ 16 hours each = 80 hours
production cost = nil
profit week 1 = $500.00
profit week 2 = $1000.00
profit week 3 = $1500.00
Total profit = $3000.00 – for something I have done once, and once only, even if it did take 80 hours to do
Divide by 80 hours = $37.50 per hour paid profit
And it grows exponentially, as sales pick up. Now, past a certain point, because there was no measurable cost factor involved, I cannot accurately measure profits in terms of a percentage. This is financial intelligence at work.
It only becomes an unworkable model when we start to put ourselves on a measurable hourly rate. It is then that, as the saying goes, time is money. But this is an illusion. I say this because, how does one go about working out what volume of time equates to a specific volume of money?
Using the example of eBook production and sales above, for example, what if, 12 months from the date of the first sale, profit from that BMW book is at $25,000.00. Do I then go and say I took 80 hours to get the book out, therefore I am now worth $25,000 divided by $80 = $312.50 per hour.
What if I have written another 10 books by then?. Each one has started to sell. How do I keep track of and figure my hourly rate?
I don't, and I can not, unless I want to get hooked into the 'time is money ' illusion. I am far better off to recognize financial intelligence when I see it, arrest the urge to measure my worth by how much money I can make per hour, and just relax and go with the flow, and enjoy doing what I do. Life is too short, for me at least, to be doing otherwise. When it comes to how to create wealth, I think financial intelligence is possibly the best resource and perspective I can have. This is what lends itself to the creation of simple and effective business systems. It is what goes into answering the never ending search to create wealth easier and faster than ever before
Do you want to learn more about how to succeed in becoming wealthy ways to make money?
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Keith Roberts has been working in the field of wealth creation for nearly ten years and has written 7 books
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