There is a great story in Robert Kiyosaki’s “Cashflow Quadrant” (a must read book) that goes like this:
A village in Africa needed water, so they gave 2 people, Bill and Ed, the contract to supply it, reasoning that the competition would keep prices reasonable and the service good. Bill immediately ran out, bought to buckets, and started making the trek to and from the lake, which was a mile away. He started making money immediately, which was great, especially as Ed disappeared from the village. The downside was that he had to get up before everybody else to make sure that the village had the water, and his work was very tiring, as he spent his whole day carrying buckets of water.
Several months later, Ed returned with a construction crew, and built a stainless steel pipe from the lake to the village. Once it was ready, he announced that he would charge 75% less for his water than Bill, that his water would be cleaner than Bill’s, because it would be covered the whole way, and that it would run 24/7, unlike Bill’s, because Bill didn’t work on weekends.
When Bill saw everybody run to the new faucet at the end of Ed’s pipeline, he dropped his prices by 75%, bought covers for his buckets, and employed his sons to work night and weekend shifts. Once his sons had left for college (and inexplicably never returned), he had to hire more workers to cover their costs, and spent his days dealing with accounting and labor issues.
Ed saw the success of his pipeline in this village, and went on to build them in several other villages as well, earning only pennies on every bucket delivered, but delivering millions of buckets a day. He oversees his business from a beach in Hawaii, as the water flows whether he is working or not. The End.
The moral of the story is obvious: don’t spend your days working for money when you could be designing systems to have money flowing to, and working for, you.
The problem, of course, is that we all need money now. We need to pay the rent, put food on the table, and gas in the car. It takes time to develop financial plans, find investors, and put a deal together. So what are we supposed to do if we don’t have the capital to live off while we create and build this business, whatever it may be?
The answer is that we have to be building the pipeline while hauling buckets, as hard as that may be. What that translates to is building some kind of business (outside of our artistic career) that will eventually support us in our artistic endevours, while working the jobs that many of us pursue to survive. Yes, this means that you will be working a little bit harder now, but one of the secrets of wealthy people is that they do work now that will pay them next month and next year, as opposed to only next week.
So what to do? The place to start is financial education. Learn about businesses, about investing, about tax structure and so on. Take the time to plan your financial progress, instead of being driven by it. Dedicate a few hours a week to this process, and then, once you have made a decision as to what you are going to pursue, focus that same time on that. By doing this you will ensure that you will have, in the longer run, the time and energy to truly pursue the things that matter most. If you choose not to do it, chances are that, in fifteen, twenty, twenty-five years, you will still be hauling the same buckets you are today.
What ideas do you have about other business? What things could you be building in your spare time that could bring in steady - and even job replacing - income down the road. Please leave your ideas here, as I would love the chance to brainstorm with you.
