Where Are You In the Wealth Journey and What’s the Highest Impact Objective For You Next?



​​​​People are always asking me questions about wealth building, investing, etc. whose answers lie not in a “yes” or “no” but rather “when”.

What am I talking about?

Well building wealth is like building a house or baking a cake.

You’ve got a whole bunch of things you need to do but the order you do them in matters.
“Should I build a roof?”

“Well that depends…have you poured a foundation yet? No? Then no it’s not time to build a roof yet forget about that until later.”

Same is true in building wealth: “should I be putting money into a 401K or RRSP or equivalent?” That depends, do you have consumer debt? Yes? If so then no, pay off your consumer debt first.

There’s a couple dozen of these milestones so here we’re going to lay out for you the exact order of steps that’s optimal so you can identify where you’re at and what to do next.

The Order is Optimal not Always Essential

At Richucation what’s the objective?

To get predictable results as quickly as possible with as little effort as possible so we can enjoy more life.

We want to greatly reduce the risk of failure so you don’t spend years trying to achieve financial success, fail and never get to enjoy the fruits…if this was the case you might as well have spent the same time doing the things you love (great when what you love is entrepreneurship).

This means getting results predictably not just by luck.

Second, it doesn’t make sense to spend your whole life working for something only to achieve it at the end of life and never be able to enjoy the fruits hence we want to achieve results faster hence great technique and education.

Finally, we want to enjoy the process along the way since anything can happen in life this means minimizing the effort along the way.

With this in mind we normally seek out the essentials (those things you can’t succeed without and this leads to The Formula).

We talk about three important things to achieve this goal:

This is different from most every other training on the planet, which focuses on high level tips, tricks, strategies, etc. that don’t always work and often achieve relatively little impact.

These are designed to achieve results all the time (hence essential) and hence give predictable results for our clients.

Sequence is sometimes essential but not always.

In what we’ll describe here we have an example of this.

Could you put money into tax deferral vehicles without paying off consumer debt?

Yes, of course you could but it’s not optimal.

Remember our goal is to get results faster so you don’t have to do it this way this will simply get you faster results on average.

It’s also true that sometimes doing things differently could work out for you by getting lucky and might pay off.

The problem is luck can’t be replicated consistently in a system that works and often introduces a lot more risk.

Remember we said our goal is to get predictable results so what we’re outlining here is designed to put you in a strong position predictably as quickly as possible with minimal effort hence what will follow.

To help understand this we’re including a description not just of what to do but why to do it in this order since so many people screw this up hopefully understanding why will help you to actually stick with the plan when you’re tempted to deviate and as a result you’ll get more consistent results that work out much better in the long run.

Lesson you’ll get the best results if you don’t skip steps.

Understanding the Wealth Scales Map

To understand the sequence of building wealth we created the Wealth Scales Diagram (this should have been emailed to you but if it hasn’t been click here to have it emailed to you along with the checklist/cheat sheet for building wealth).

The wealth scales function a bit like a pendulum flowing back and forth starting on the left and moving to the right then back.

​There are four sections on this scale on the left side of the wealth scales we’ve got Income and Saving & Spending, this is where you’ll start as we’ll see and why.

On the right side is Investing and Preservation & Protection again starting on the left with investing and moving towards preservation and protection, for reasons we’ll see later.

These help to depict the two aspects of wealth: profitable cashflow (on the left) & net worth (on the right).

There’s two other parts to be aware of:

  • The stand showing the blend from focus on opportunity to risk progressing from left to right
  • The leverage point between the scales (think of the pivot point in a lever or teeter totter), which represents leverage. Leverage you’ll see starts at zero progresses upwards then goes back down to zero from left to right representing the ratios you should maintain as you progress through your wealth building journey

You can think of the progression of where to focus on the wealth scales as follows. 

You’re always trying to achieve balance, at first the left side is up so we want to add to the left side, which will cause the weight to force it down, this causes the right side to rise so we focus there, back and forth much like how we hike up a mountain at angles rather than directly.

Hopefully this is clear based on the diagram and will become more clear as we walk through the steps now.

The Logical Starting Point

When you get stated what have you got?


No income, no assets, just the need to live.

In other words, even when you’ve got nothing you’ve still got bills so your first objective is to be able to cover those expenses or you’ll be going into the hole (possibly literally and figuratively).

So, the starting place is GET INCOME. This is step one.

At this stage you’re not particularly concerned how you get it only that you have income to cover your basic needs/expenses. You don’t worry about how to reduce your expenses because if you can’t pay them anyway what difference does it make? You don’t worry about investing because you don’t have anything to invest, likewise for preservation.

So step one is to create at least a basic income we’ll talk later about boosting this income. If you don’t have any income take care of this immediately and don’t worry about anything else.

The Logical Next Step

As soon as you’ve created income your immediate question becomes what to do with it?

At this stage we’re not talking about investing or any such thing because you don’t have enough to worry about that.

The important issue here is to make sure you’re practicing smart spending (minimizing your costs) to save as much of it as possible so you’re getting ahead.

The real jump between the left side (building income) and the right side (building net worth) is getting ahead each month.

The easiest starting point here is to practice what we call Waterfall Money Management, which is the simplest 4 step money management system you’ll ever find to get you ahead each month and ensure you address the most common money management mistakes easily.

You’re going to repeat this pattern of make income, management your spending until you’re able to get ahead each other saving at least a target 10% of what you’re earning (see Waterfall Money Management for more details).

The Most Logical First Step With Your Profit Fund/Savings

As soon as you follow the Waterfall Money Management System, which is really just the natural logical way to spend sequentially so you’re always getting ahead you’re going to end up with a profit fund.

The question then becomes, “What do you do with this profit fund?”

There’s two steps at this stage to be carried out in order:

  1. Pay off consumer debt – consumer debt = any debt whose interest rate is 7% or higher
  2. Build a reserve fund of 3 months expenses – this is money you never touch it’s set aside for an absolute worst case scenario

Remember this order is very important you pay off the consumer debt first then you build the reserve fund.

Why do we pay off the consumer debt first?

By paying off debt you’re essentially building savings (in the form of available credit) while at the same time earning a risk free rate of return on your savings.

Think about it this way. You want to have access to your money in case something goes wrong, you’ve got a rainy day, etc.

On the other hand, you want to be putting your money to work for you immediately.

If you just put the money in a savings account, then it wouldn’t be working for you providing you a rate of return (the money you use to pay off debt is literally earning you a risk free after tax return equivalent to whatever the interest rate is).

On the other hand, if you took this money and invested it or something similar then if something went wrong and you needed the money you could be forced to sell at a loss, might not be able to access the money, etc.

By paying off debt you have the best of both worlds. You also show good repayment history, which helps with accessing additional credit and building one of the 4 Types of Financial Wealth.

Hint – if you follow our system here you’ll automatically build all 4 Types of Financial Wealth.

Why pay off only consumer debt vs all debt?

There’s good debt and there’s bad debt.

Good debt is debt that’s earning you a rate of return greater than the cost of the debt and therefore accelerating your financial progress.

Bad debt is debt not providing you with a rate of return and simply costing you money.

Consumer debt is bad debt and you want to get rid of it because on a risk weighted basis you probably can’t earn as high a rate of return as the debt service is costing you.

What does this mean?

Say you took $10,000 and invested it what rate of return could you reasonably expect?

The S&P 500 including dividends has averaged a little over 9%/year. for the last 100 years or so but this also has ups and downs so during any period you could do much worse.

Hence on a risk weighted basis you’re better off making another choice.

This is also before tax so once you pull taxes out you’re talking about around 7% maybe a little less.
When you pay off debt you don’t have any risk, you are truly getting that total return immediately without any chance of it going up or down, etc.

You don’t have to pay any tax on those returns either it’s after tax dollars going straight into your pocket.

And having access to a bunch of credit helps to make you nimble.

This is at 7%...many people are paying 18%-24% in consumer debt service costs, which you’ll pretty much never make on a long term risk weighted basis after tax (Warren Buffett averaged 29%/y for 13 years and you’re no Warren Buffett so this should tell you something).

This also increases your income every month by decreasing your interest expenses, which helps get you ahead (growing cashflow at this stage is important) allowing you to recycle more into savings rapidly.

Let’s Talk About This Reserve Fund

A reserve fund is simply money that sits waiting for a rainy day.

You don’t want this to be too much money because it’s latent capital doing nothing for you in terms of earning you a return.

What it is doing is providing you with a margin of safety in case something goes wrong.

What happens if you lose your job?

What happens if you get injured?

What happens if you have a sudden large unexpected expense?

If you don’t have a reserve fund you’re either screwed in this situation or you have to borrow consumer debt at high interest rates, which ends up costing you a lot more.

Long run this small cash cushion is only going to represent a very small percentage of your total holdings but for now when you’re getting started and you’re vulnerable it makes you safe and helps with your peace of mind.

At this stage we’re recommending this reserve fund equals 3 months of your total monthly expenses.

If you’re familiar with our Waterfall Money Management System you’ll know most people under estimate their monthly expenses and you’ll know how to calculate your real monthly expenses so you’re safe.

Click here to download the monthly spending sheet to get a thorough idea what you’re really spending.

As your expenses rise always top this cash fund up so you’re good to go.

Your goal should be to pretty much never touch this money. It definitely isn’t for buying gifts or splurging on yourself, paying for vacations, etc. It’s there for a worst case scenario.

Boost Your Income

With your profit fund on auto-pilot for a little while until you’ve paid off your consumer debt and saved up a 3 month reserve fund it’s time to get back to boosting your income.

The best easiest way to understand how to boost your income at this stage is through The Golden Path & 6 Resources methodology.

This is the sequential process you can go through to radically increase your income fairly quickly once you get on the path.

Your goal is to grow your income to the point where you can be setting aside at least 30% of what you’re earning monthly into your profit fund.

This is going to get you ahead big time, give you options and allow you to start having your money work for you.

Accelerate Savings With Better Money Management

Obviously, we don’t just look at what we make we also look at what we KEEP.

What we keep is based on how we’re managing our money and what we’re getting for each dollar we spend.

To do this starts with making sure you’re properly measured all your expenses (download our free monthly expense tracking checklist to make sure you’re being thorough).

Make sure you’re measuring not guessing and update your numbers ideally once a month to keep on track.

One magical thing you’ll find is simply by measuring what you’re spending you’ll tend to spend more efficiently. Awareness will also help you feel more in control of your finances.

If you’d like software to help you we recommend www.mint.com as a simple free online app to make the process much easier.

When you know what you’re spending on an annualized basis start with the largest expenses and work down to see how you can reduce those expenses or get much more value from the money you’re spending.

Consider the Dream Life Ratio in this as well as applying the tools for getting better deals.

Aim to spend probably 95% of your effort on growing your income and 5% of your effort on managing your money better since you can’t cut your costs to wealth, you can only reduce expenses so much but you can grow income unlimited.

How to Start Investing

At this stage your income should be growing (constant process), your money management should be well under way and you should be saving a decent amount.

You’ve paid off your consumer debts and you’ve got a 3 months reserve fund. (This is the trigger to focus on this step, which will be really quick then you can jump back to building wealth and managing money better).

It’s now time to start investing but only at a very superficial level.

What do we mean by this?

​You don’t want to invest yourself into learning investing, which means you don’t want to do anything fancy.

Why not?

Because your return on your time by increasing your income is far greater than your return on your money by learning to invest well at this stage.

This is an EXTREMELY important point most people overlook.

A lot of people start pouring themselves into learning how to invest too early and slow down their financial progress as a result.

Let’s consider the numbers.

Say you’ve got $50,000 to invest (probably you don’t yet but let’s just say). You can easily invest this money at 5%/year after tax very close to risk free in other words generating you $2500/year in growth.

Let’s say by some magical fluke you could somehow increase your returns from 5% to 20% (possible but extremely difficult, almost no one does this consistently).

This would be an increase of $7500/year in income.

If you’re working 2000 hours per year, which is typical this would amount to a $3.50/hour raise.

How much time is it going to take you to learn to increase your investment returns by that much?

At LEAST 2000 hours AND there’s going to be massive risk you’re taking on of actually losing your initial investment. In fact most people never achieve that goal.

By contrast what if you were to take that same time and invest it into increasing your income how much could you boost your income?

If you’re following our methods you could EASILY increase your income by 3-4 times that much or more per year by following The Golden Path and our Income Supercharger Methods.

In other words the opportunity cost between what you’re making extra in investing and what you could be making extra in income is about 400%.

There will come a time when putting your energy into mastering investing is the best thing you could do but not yet, not until you’ve built up a larger nest egg.

There will come a time when putting your energy into mastering investing is the best thing you could do but not yet, not until you’ve built up a larger nest egg.

So, what can we do that’s super simple with our money at this stage?

First, it helps to realize what your realistic point is in life at this stage.

You’ve got income but not a lot.

You’ve got savings but not a lot.

If something goes bad in your life you could keep the cash.

And in the meantime extra cashflow goes a long ways towards improving your lifestyle and making your life better.

These things won’t be true in the future but they are now so our investing decisions need to reflect these realities.

Starting with the fact that you might need the cash suddenly (need to sell your investments).

This is very important because most investments go up and down and part of the ability to get a good rate of return comes from being able to choose when to sell (when they are up).

You don’t have that option if something goes wrong, you have a sudden need for the cash but maybe the economy is also down (people tend to get unemployed when the stock market is down so if you have to sell then this compounds your problems).

To address this we want a stable easily collateralizable asset.

What does this mean?

It means if something goes wrong rather than selling the investment you can borrow against it at very low interest rates and wait for the price to recover before you sell if you sell at all.

There’s basically two types of useful collateralizable assets:

  1. Your house
  2. A dividend participating whole life insurance policy

You could also in theory use a government bond but it’s not as good as either of those two.

So, what you’ll invest it will be one of those two.

There is a third option, which is if your company offers a contribution matching pension plan you might want to use it because the money they match is essentially free money and you’re not likely to get those returns elsewhere.

Usually, we recommend most people do as follows:

  1. Take half of the amount of money you were putting into building your reserve fund and purchase a properly structured dividend participating whole life insurance policy.
  2. Take the other half and start building your reserve fund up from 3 months to 6 months (Bill Gates used to like to have 12 months expenses in the bank for Microsoft) saving up to purchase a principal residence.

Why do we recommend the dividend participating whole life insurance policy?

Remember, we’re trying to get the maximum results most predictably and achieve multiple goals with single actions.

A properly structured dividend participating whole life insurance policy has a whole host of advantages:

  1. It is contractually guaranteed meaning it’s pretty much the safest investment on the planet with about as close to zero chance of loss as possible.
  2. It pays a rate of return that’s typically better than a bond and a portion of those returns are GUARANTEED meaning they won’t vary with the market.
  3. It is tax sheltered, so all the gains are tax free.
  4. It provides life insurance in case something bad happens.
  5. It is creditor protected meaning if you get sued, go bankrupt, etc. usually creditors can’t go after it.
  6. If something goes wrong you can borrow against it at some of the lowest rates possible, without having to qualify and with no requirement to pay it back (about as good as cash).
  7. You’re able to use the collateralization aspect to treat it as a savings account that reduces your costs and increases your savings every month if done properly.

That’s a lot more benefits than simply buying say bonds, which have similar safety but lower returns and not nearly the broader benefits.

Notice how this helps to achieve our “preservation and protection” goals mentioned earlier without even trying? Btw our reserve fund did essentially the same thing.

This insurance policy shouldn’t form a huge part of your portfolio long term so you’re setting the budget now while your income is low but for the most part it’s not going to increase with time, so you’ll have more and more money going into the other aspects of your portfolio as your income increases.

*Tip – the life insurance policy will receive dividends you can choose to apply against your premiums, take or use to purchase what are called Paid-Up Additions. You want to max out your Paid-Up Additions.

Supercharge Your Income

With this foundation built it’s time to supercharge your income.

You do this by separating the money you earn from the time you invest (you might have already done this but if you haven’t this is critical to getting to the next level).

You do this by:

  1. Doing deals
  2. Selling someone other people’s time
  3. Selling products or licensing rights rather than expertise

This will open you up to doing bigger deals, which is key to 10x your income and making really significant money.

This will also put you in a position to free up your time and eventually transition from making it to managing it and enjoying whatever life you like.

Your objective here is to get your income to at least 10 times the average annual income in your area or whatever area you’d like to live in.

You can check out our material on Supercharging Your Income Today.

Optimize for Tax

Up to this point in time tax hasn’t been a big deal for you but the more you make the more the tax man wants to take and the bigger expense those taxes represent of your total income.

So, as you begin supercharging your income you simultaneously want to start optimizing as much as possible for tax.

There are some investment strategies we’ll use to achieve this objective but the biggest thing you can do is start a business (also helpful for supercharging your income) allowing you to spend before tax dollars rather than after tax dollars.

See The 3 Ways to Save on Tax.

Depending on where you live there could be dozens of small individual strategies to use and the bigger you get the higher your tax bill gets the more worthwhile it will be to engage in sophisticated tax planning and have a great accountant.

For example, when your tax bill reaches close to $100k/year (sometimes earlier) it becomes worthwhile to consider international tax planning strategies.

Purchasing a Principal Residence

At some point the extra savings you’re accumulating will add up to enough to put a down payment on a principal residence.

This becomes a fantastic investment opportunity if you do it well or could be a money pit and a recipe for loss if you do it wrong.

To learn how to do it write read How to Buy a House Like a Millionaire.

Why do we want to do this vs other options?

A house helps us to achieve several goals:

  1. If done properly it increases your monthly cashflow, which at this stage makes a difference for you while you’re building your income.
  2. Your principal residence is usually creditor protected to some extent (for example homestead exemptions in many US states).
  3. You’ve got to pay rent anyway so you’re essentially locking in your monthly housing expense long term meaning you get further and further ahead each year and rents go up.
  4. It’s another collateralizable asset in case the worst happens.
  5. It’s the cheapest easiest to get money available to us helping to start the road to leverage to multiply returns.
  6. It’s the easiest way to apply The Barbell Principle (you should also be aiming to use this in your income) to maximize returns while decreasing risk.

If for whatever reason you aren’t going to be buying a principal residence or can’t do so at the standards set in How to Buy a House Like a Millionaire or once you’ve purchased the house and you’re wondering what to do with the rest of your money as it grows here’s what to do.

Remember we’re paying a lot of attention to tax savings at this stage as a major expense so per The 3 Ways to Save on Taxes you’re going to want to maximize your contributions to a tax sheltered vehicle.

These include for example 401K and Roth IRA in the US, RRSP & TFSA in Canada, and equivalents in other parts of the world.

As with before especially if you’ve got an employer contribution matching program for a pension plan or stock purchase plan seriously look at that as a way to boost your returns.

What do you do with the money inside these vehicles?

At this stage you’re still not quite ready to delve into learning investing so you’re going to do as follows:

  1. Dollar cost average to minimize timing risk.
  2. Invest into either a low fee index of the S&P 500 (or comparable) or diversify between asset classes and rebalance your portfolio annually in a model similar to Ray Dalio’s All Weather Portfolio suggestion).

Don’t try to beat the market at this stage. Don’t look at what your holdings are doing, get back to making money so you’ve got more money to invest.

On average very few money managers can beat the general market so chances are you’ll do pretty well overall with this method.

Also, note that if you’ve been following this method you’ve already got a basic diversified portfolio offering you some shelter from ups and downs:

  • Cash reserve fund
  • Dividend participating whole life insurance
  • Real estate (principal residence)
  • Stocks, bonds, commodities (low allocation on the later since they aren’t productive)

This is a very solid foundation and you’re ready for anything so you can really start learning and cranking going forward.

Paper to Protect

This is the stage where it makes a lot of sense to preserve and protect by creating a will, a living will and taking out any additional insurance.

You’ve now got enough assets that there’s something to lose.

It’s not worth engaging in significant asset protection at this stage or diversifying globally, etc. that’s in the future for when you’re rich but it is worth having some solid protection.

This might also include a prenup if you’re getting married.

Diversifying Your Income

By this point your income should be pretty high and as a result the risk of losing the income is comparable to or greater than the benefits of growing it.

As a result you want to make sure you’re diversifying your income.

This is in a sense a way you can improve your saving & spending in an abstract sense while at the same time increasing your income.

You do this by having multiple streams, multiple customers, multiple products, multiple projects, etc.

You might also look at insurance if relevant at this stage.

Time to Learn to Invest

You’ll notice the weight of your journey has moved from an early heavy focus on building income to now more and more focus placed on investing.

When your savings have added up to around 10 times the average annual income it starts to make sense to learn investing.

It also makes sense to diversify yourself by sequentially buying investment real estate if you can find the right deals and buying paper assets (stocks, bonds, commodities) as well as possible investing in private loans and private companies.

What you really need to do here is understand how investing works and cultivate an investing edge.

This will take time and effort and a whole lot of learning but can pay off big time.

Scaling Up Investments

Once you’ve learned to gain a consistent investing edge it’s time to ramp up the leverage.

An investing edge means achieving better than market returns by enough that you can pay an investor better than market returns and still make a margin.

All of the biggest money comes from this leverage rather than from the direct profit margins.

You can learn how to scale up through Grow Impact.

Protecting Yourself from Leverage

If you’re going to take on investors and leverage it adds a lot to your risk so you need to learn to protect yourself.

This includes corporate structures, trusts, agreements, insurance, and best practices.

Becoming Rich

The cycle at this point can take you to pretty much whatever level you’d like in terms of financial success since the biggest financial success comes from reaching the point where you can apply scale and then repeating bigger and bigger.

There’s of course a lot of challenges and learning you’ll encounter and hence our various trainings offered here.

As you reach this point it becomes important to diversify internationally between regions, currencies, industries, and of course protect yourself from serious legal and systemic threats.

Toning Down the Leverage

When you’ve reached whatever point you’re happy with you want to slowly begin throttling down the leverage as leverage adds risk.

This might include selling some properties with leverage and paying off the rest.

It might involve investing without margin, placing assets into more stable assets, etc.

And of course if you want to pass on assets you’re able to consider foundations or other strategies depending on your goals.

Your options are nearly limitless.

The Golden Path & The 6 Resources

Golden Path

Have you ever wanted to 10x your income?

When I owned a recruiting company I used to have people who would come to me and jokingly say “can you get me a job that pays $300k/yr?”

There was a big gap in their thinking preventing them from getting there because the truth is almost anyone can make that kind of money.

When I was in high school I made $50/hr. when my friends made $5/hr. Today when I actually bill out hourly it’s typically at $1000+/hr. I don’t do it often but being able to do so affords me an incredible amount of freedom.

At my peak I’ve made $25,200 for a day of work.

I’m going to show you high level how this works and at the end when you continue on with us you’ll explore the little nuances to make the jump possible for yourself.

Imagine waking up a year from now…

Last evening was amazing relaxing, laughing, having a good time with friends …

You’re refreshed and to start a day working on a project you really enjoy with people you enjoy and respect the work is energizing to you…

And today you’re making $1000/hr.

You’re working a partial day, 6 hours and then spending the rest of the day taking care of yourself working on your personal goals and hobbies and being with friends or family.

You’re making enough in a day to pay for a vacation each and every day allowing you to work from anywhere on your own schedule to pick and choose who you work with and what projects you work on…

It took you time and discipline to get here but it was worth it…

Breaking the Time Money Myth

There’s an old expression that says “time is money” but it’s only partially true and where it’s not true it gets millions of people into trouble.

Years ago my uncle an investment banker corrected it by saying, “time is only worth money if you’ve got someone willing to pay you for it”.

Adding to it, your time is only worth what someone is willing to pay you for it.

Unfortunately, most people aim to increase their income primarily by working more.

This is a valid method but doesn’t scale very far because we’ve only got 24 hours in a day and can only reasonably work around 70-80 hours per week, which even then tends to be hard on our lifestyle and our families.

What’s far more important is increasing how much you make per unit of time or separating the two altogether.

The question is how do you do that consistently?

And how do you avoid the ceilings most people encounter keeping their income low?

The first most useful answer, the one we’ll explore here today is what we at Richucation call The Golden Path.

Keep in mind Richucation is all about stripping concepts down to their most basic forms so they are easy to understand and apply and so we know they work every time they aren’t based on some trend or technology that might change in the future.

The Golden Path is the universal path everyone walks in increasing their income or more importantly multiplying the value of their time.

The great news is this is something you can do fairly quickly.

I was able to go from relatively minimal earnings to my first experience making $10,000 in a day within 2 years.

You won’t do that every day but even once in a while is a great start.

Knowing what I know now I could do it quicker and I’m going to show you how to do the same.

The Two Resources Myth Keeping People Broke

It was an icy winter when I was at my most broke I literally had nothing, not a penny in my account or my change jar, all spent, no income I could count on just a mound of debt and I was mostly tapped out in that regard.

Pacing back and forth in the house where I rented a room a mentor shared thoughts with me so many of which didn’t apply in this low situation.

It was at this moment I wish I’d understood how useless a very common expression in the world of financial development is:

“Poor people trade their time for money, rich people trade their money for time”.

Why is this so useless?

Because whether true or not it offers no path to get from not having money to having it.

Here’s why you’re trapped…

Initially your time isn’t worth much so if you sell it you’ll probably barely get by (we can reasonably state your time is only worth about minimum wage in and of itself, maybe slightly higher if you can sell it abroad).

For easy numbers let’s say your time was worth $15/hr. tops.

In order to buy your time back you have to be able to hire someone else to do something for you that you would normally do.

But if it costs you as much to hire them as you’d make in the time saved you aren’t net ahead. In fact you’re behind because it takes time and energy to hire and manage that person.

The solution is to increase the value of your time so you’ve got a differential to work with but how?

The 6 Resources

Years later I discovered the paradigm of the 6 resources and have learned it’s so universal in its application that it affects all aspects of business, wealth building, and creating an incredible life.

It is one of the most fundamental principles in Richucation.

The idea is essentially this.

Most people view a very binary (meaning two) relationship between time and money.

They view the resources as time and money.

But this is incomplete.

There are actually 6 resources you have available to you.

All those years ago talking with the mentor I said “we trade what we have for what we don’t have”.

At the time I had time and I didn’t have money.

This is true, but there’s a procession of trades you should make to magnify what you get at the other end.

Have you ever heard of the paperclip game (I believe it’s originally a game Mormons used to do during their missionary training called Bigger and Better)?

It’s the very famous story of the man who traded a paperclip for a house seemingly impossible right?

But the point is he didn’t just trade a paperclip for a house no one would have done that.

Instead following the name of the Mormon game he traded the paperclip for something that was “bigger & better”.

At first this might have simply been a little bigger and better say a pencil.

It’s easy enough to see how someone might casually trade a pencil for a paperclip after all you don’t care much for the pencil since its value is low.

But now he could trade the pencil for something bigger and better and so on.

Over a series of trades, he eventually worked his way up to a house.

In the Mormon game as I’ve heard it people start with a basic item and go door to door asking for trades to grow what they’ve got eventually coming back at the end of the day to compare and see who ended up with the largest win.

This sometimes results in people coming back with TVs, bicycles, etc. in only a few hours.

In a sense it really exemplifies the phrase “one man’s trash is another man’s treasure”.

What I learned is there are 6 resources always present in our lives and by trading not directly time for money but rather trading in a specific order starting with your time you can progressively build to very large amounts of money.

This sequence (remembering what we’ve discovered in Richucation is one of the most common cornerstones missing in people’s financial and business progression is an understanding of the correct sequence, which is why we spend so much time teaching about it to accelerate your learning) is what we call The Golden Path.

The First Trade to Increase the Value of Your Time

There are 6 resources or types of resources and we know two are time and money.

The basic paradigm is you have time you want to get money but you want larger amounts of money so you’re able to get ahead and buy yourself freedom.

Everything we’ll discuss can easily be understood by the concept of “storing time”.

What does this mean?

Well no one is actually paying for your time or at least very rarely, they are paying for what they get from your time.

For example, if someone hired you to dig a hole they might pay you per hour but really they are paying for a hole.

Once you realize this if you could give them a hole much faster you could in theory still charge the same amount and make more per hour.

If you’re troubleshooting someone’s computer what they are really paying for is for you to make the computer work.

Let’s put it into a different context.

We all have the same amount of time, 24 hours in a day. This is the ultimate scarcity.

No matter how abundant we become in other areas of life we can only be in one place at one time doing one thing. How we spend our time is literally our life.

At least in theory any of us could do more or less anything given a sufficient period of time.

You could dig the hole.

You could figure out how to troubleshoot your own computer.

You could build your own house.

You could design your own car.

The problem is it would take you massive amounts of time so we as a society have advanced by relying on each other.

If I wanted to design my own car I’d have to learn a lot of different things and these could collectively take me a lifetime.

So, when I pay someone for a car what I’m really doing is buying myself that time savings so I can use it for something else.

Generally speaking the longer it would take me to learn to do it myself the more valuable it is and consequently the higher the amount I should expect to pay for it (there’s a few other variables but this is a starting point).

This brings us to the first trade – expertise.

When we learn something we invest our time once but once we’ve learned it we can reuse the learning over and over again thereby saving someone else time again and again.

Imagine if you took a week to learn to do something and once you’ve learned to do it you do what’s necessary in an hour.

If someone pays you to do that thing for them they are basically buying a week of extra life by not having to learn it themselves.

The thing is you invested that week of learning but you can do this for dozens or hundreds of people making the learning well worthwhile.

In a sense every time you hire yourself out you’re saving a week.

Learning = stored reusable time!

You want to increase the value of your time and thereby boost your income?

Don’t trade your time for money trade your time for expertise, then sell the expertise since expertise is much more valuable than time on its own.

When I do international corporate structuring for our clients to learn this would take them months, perhaps up to a year or two and in their businesses they are making hundreds of thousands of dollars per month so it’s not worth the loss in income elsewhere to go learn.

Because it saves them a lot of time and because their time is worth a lot it’s worth it to pay a lot to my company.

When you pay Richucation for lessons, advisory, etc. you’re capable of figuring it out on your own but it would take a tremendous amount of time since we’ve worked at this for 10+ years and can provide you with the answers in minutes.

What we’re doing is saving you massive amounts of time, so you can live more of the life you desire.

To recap.

You have time (the 1st resource) and want money (the 6th resource).

Don’t trade money directly for time except for just enough to cover your basic expenses, which is required while you’re getting started. Instead focus on investing your time into valuable specialized expertise (the 2nd resource).

This explains exactly why people go to colleges and universities to increase their income. They are investing a few years in order to make more per year every year afterwards.

The gap is most people don’t focus on really valuable learning and slow down their learning after college or university.

The Fastest Investment to Boost the Value of Your Time & How I Made $25,200 In A Day

We’ve established the fundamental premise that your objective is to find ways to trade your time now that will save you or others as much time as possible in the future.

One of the first things you can trade your time for is expertise.

The other is perhaps even more powerful…

If we need to get something done what are our options?

We can do it ourselves or we can get someone else to do it.

If it’s something we need to learn to do then we’ve got to find someone who has the expertise (or sometimes other resources) necessary to get it done.

As anyone who has hired someone before knows hiring the wrong person can be more costly than hiring no one at all.

In other words it’s not just about finding someone who has the resources (time, expertise, money, etc.) to get it done but making sure they are the RIGHT person.

This can be incredibly time consuming and the time is a major opportunity cost.

This gives us insights into the next trade or resource.

Instead of trading your time for money invest your time into building relationships!

When you’ve got relationships you know what value those people have to offer in the world and what others are setting out to accomplish, need or desire.

By having access to two sets of relationships you can get paid simply by making a connection.

This is probably the easiest way to make a large amount of money fast.

This is both how I made $10,000 in a day for the first time and how I made $25,200 in a day for the first time.

I had access to someone who had the expertise (in the second situation) or resource (in the first situation) someone else was looking for and connected them. I was paid a fee based on them moving forward together.

Of course the quality of the relationships matters. How much you know them, how much they like and trust you.

It’s also more valuable to have relationships with people who have greater expertise or more resources such as money or relationships of their own.

Please note relationships go beyond contacts and even beyond connections since you’ve got to know these people so you have an understanding of what they have to offer and what they desire as well as possessing influence with them.

Bottom line, if you’re working on building your income invest at least a portion of your time into developing new strategic relationships then trade those for money rather than trading time directly for money.

Obviously, the recommendations and hand offs need to be good so there’s an entire process to building the network and then benefiting from it in a way that builds rather than risking your reputation, which brings us to our next resource.

Doubling Your Income With Delegation

Note, at this stage you could start growing your income further and buying some of your time back by hiring others to do minimum wage or low dollar tasks for you because with your expertise and relationships your time is now worth more than unskilled time.

When you are the one earning your income (we’ll get away from this eventually but for now this is where we’re at) your income is calculated pretty easily:

Rate per unit of work multiplied by volume of work

For example if you’re getting paid $50/hr (rate per unit of work) and working 40 hours (volume of work) you earn $2000.

You can sometimes increase your volume of work by changing how you charge from hourly (limited) to by job then get really good at completing jobs quicker.

However, you’ll still have a limitation on your time.

If the average person has say 60 hours per week they can work they are capped.

They can increase this by hiring someone to do activities such as:

  • Grocery shopping & errands
  • Cooking
  • Cleaning
  • Etc.

In my own house I will hire a chef to prepare meals, hire someone to do my yard work, have my assistant run errands for me.

Not only does this free up mental space it also frees up my time.

I sincerely believe everyone should do this to better the world.

We live in a world where it’s harder and harder for low skill people to find work and if you could be doing something more valuable you’re not only denying the world your talents by being occupied with these low value activities but you’re also depriving someone else who could do those tasks but couldn’t do the more sophisticated tasks you’re doing. It’s a win – win for you, them, and society.

Make the most of your higher income by spending less time on low value tasks either to spend more time on higher value tasks or to get more out of life by living and pouring energy into your hobbies, passions, relationships, etc.

As your time becomes more valuable you’ll have more and more opportunities to do this so let’s get back to boosting the value of your time.

Compound Time Without Investing Time

The powerful thing about this next resource is expertise and relationships both involved investing time.

This next resource doesn’t require you to invest time.

This also happens to be where your income really starts to grow dramatically.

Remember we said before there was a sequence?

The sequence thus far is trade your time for expertise and relationships. Those are your two immediate action steps.

Now it’s time to focus less on trading relationships and expertise for money and instead leverage them against one another to build something more valuable to grow your income AND start buying your time back.

This next resource is reputation/celebrity

This is where other people are spreading the word about you and what you’ve got to offer.

It saves you time because you don’t need to sell yourself so much, people will come to you and they will come ready to hire you.

It increases your income because with a great relationship and more demand than you can handle you’re able to charge premium prices.

Reputation comes from those you have relationships with knowing you’re the expert and then magnifying your message and your identity in the public.

Granted, although we said it doesn’t require time (you can develop it organically by being a genuinely helpful expert) you can magnify it by investing time, money, expertise and relationships into marketing & PR.

This is the stage where you’re really able to make big money if you haven’t already.

More importantly this is where you can make that big money CONSISTENTLY!

Guard your reputation zealously over time it will pay you massive dividends.

It might be tempting at times to compromise your reputation short term maybe to make an extra buck or save a bit of time or whatever. Don’t give in to the temptation.

Fostering a great reputation is worth every bit of what it costs.

The Final Resource Will Bring You Freedom

This last resource you can start building even before you get reputation but with reputation you’re really able to supercharge it.

To understand how it’s valuable consider the path of an ordinary person.

They are making minimum wage, their time isn’t worth much so they decide to pursue expertise in the form of a trade, they become a welder.

As a welder they’re able to earn about 3 times as much as they did without the expertise so it was a great investment of their time.

They build relationships to help them get jobs faster so they have less time off and maybe even do some deals on the side.

But their career path, like most, is limited they are at a ceiling on their hourly wage so how do they increase it?

They go buy a truck and a welding rig and become a contractor.

With this new equipment they’re able to charge 3 times as much as they did as a normal welder.

True, they have some added expenses in the form of the truck and the rig but these are more than made up for by the extra income so in real terms they might be making double what they were before.

This equipment is what we call “assets” because you can pay for them once and then reuse them over and over again.

Assets come in all different shapes, sizes and qualities. Not all assets are equal in fact we have an entire training on assets and ownership, which is the cornerstone of wealth.

Assets (the final resource) multiply your income and buy you freedom.

This is true because assets can work when you don’t.

You can use assets to multiply the value of other people’s time not just your own and by having them work you can profit without having to work yourself.

Assets might include computers or software, equipment or land, systems or lists, etc.

If you think about Selena Gomez she’s a huge celebrity who can obviously get paid a fair amount simply for her celebrity (it’s her celebrity not her singing that make her a lot). But she also has the largest Instagram following in the world and as a result can get paid HALF A MILLION DOLLARS per post!

The Instagram following is an asset.

When you’ve got a reputation rather than being paid directly you can be paid partially in the form of an asset such as ownership in a company.

This multiplies your income because as the value of the company grows or pays dividends over and over it changes what you were getting paid from a fixed amount to a compounded multiple of that amount.

You don’t need to be paid in an asset either you can take the money you earn and invest it in assets, which then pay you returns and buy your freedom back.

You can further hire others to work those assets to multiply your income without having to put in time the way authors do when they write a book once and then others sell it for them.

Completing the Path

At this stage you’ve built a great income now what?

Now you can use the income to pay for the expertise of others so you don’t have to learn as much yourself buying your time back.

You can pay others for their relationships saving you time in building them yourself.

You can hire others for their reputation to build bigger and better projects.

Now you’ve reached the stage where time is money for you, where you make money work instead of you working and you’re truly able to buy your freedom.

Wealth Scales Map

The 5 Stages of Business that Will Make Your Business Grow Bigger, Faster, Easier



Perhaps the first most important lesson to learn in growing a company is businesses grow through stages and what you need to do in one stage isn’t the same as the next stage.

“What got you here won’t get you there”

When you know these stages you learn to ignore the stages you’re not at yet, which brings clarity, focus, and consequently much faster results.

When you know these stages you can quickly jump from one to the next without getting stuck because you know what’s next and when to make the switch from one to another.

This all allows you to predictably grow businesses bigger faster with less resistance and more confidence.

Like everything in Richucation these are natural stages all businesses grow through them if they get big and successful whether they’ve labeled them or not.

As we progress you’ll see the very straight forward logic.

This analysis is part of the process we use to rapidly assess where clients are at and help them to identify what to do right now to get rapid results.

Ready to get started?

Stage 1 – Ideation & Validation

In order to start a new business what’s the first thing you need?

You need an idea of course.

Now, not all ideas are foundations for a solid business so specifically this idea needs to be an opportunity.

Your goal at the Ideation phase is therefore to identify possible opportunities.

What are opportunities?

Opportunities are cases of unmet or under met demand within the market.

In other words, there is something out there people want but are having a tough time meeting those desires or have a lot of frustrations with how they are meeting them.

Once you get going as an entrepreneur you’ll discover there are millions of opportunities like this but before you start finding an idea seems hard.

Probably you’ll come up with many ideas especially over your entrepreneurial career.

The mistake many people make and I made over and over was to attempt to skip the second part of this stage – validation.

Your idea will get validated one way or another the question is just much time, energy, and money you’ll spend validating it?

Great entrepreneurs learn to validate their ideas very quickly and inexpensively, which involves not starting a business, hiring people, etc. until they’ve proven the demand.

Often we fall in love with our idea but others don’t think it’s so great.

The worst example of this was probably Webvan where a company spent $380 million dollars building out a business concept only to discover people didn’t want it.

Don’t be like Webvan!

The ideal way to validate is to pre-sell your idea before you’ve built it then co-create it with your customers.

Failing this you want to build the absolute minimum required (what we call a Minimum Viable Product) to sell something and try selling it.

If it can’t be sold then the idea is no good. If it’s easy to sell this is a good sign of a good idea and you’re ready for stage 2.

As much as possible avoid spending money in Stage 1 or at least spend as little as possible, definitely don’t hire people, don’t form a company, don’t create partnership agreements, etc. that all comes later once you know you’ve got demand.

You also don’t raise any capital in this stage unless it’s crowd funding as a form of validation.

Stage 2 – Delivery & Establishment

Just because there’s demand doesn’t mean you’ve got a viable business.

You’ve now got to prove you can deliver on this demand in three important ways:

  1. Profitably – if you can’t make money at it you’re screwed
  2. Consistently – if you can only deliver intermittently you can’t build a business on that
  3. Scalably – is it dependent on you and your special skills and relationships or can it grow beyond you?

You immediate task is to prove you can do those things again as quickly and inexpensively as possible.

Why is it so important to be inexpensive at this stage?

There’s a concept called runway, think of a plane trying to take off. It needs a certain amount of space to get into the air. If it runs out of space before it takes off it crashes and burns.

Same concept for your business.

Because you aren’t making money you’ve got a very limited amount of money and you’re going to have a lot of learning to do. You’re not just how much runway it will take but if you take too much you’ll crash and burn.

By spending less you’re effectively extending your runway, which is very important to consistent business success.

Here you’ll practice fulfilling on customer orders at a very small scale not with the intention of making money or having a great business only proving those three things we mentioned before.

Here you still won’t get fancy about setting up a company with a website, an office, business cards, etc. You’ll go as simple as possible to prove the business is viable.

Once you’ve proven those things you’re ready to establish the company.

This is where you form the company, you create the partnership agreements, you open bank accounts, etc.

However, note you’re still wanting to keep your spending low. If you can get away with no office do it. If you can avoid printing business cards do it. Don’t spend money on expensive branding etc. super simple, cheap and fast is the name of the game because you still haven’t taken off.

When you’re in position to deliver consistently, profitably, and scalably with an actual company structure it’s time to move to stage 3.

Usually if you can you avoid raising capital at this stage but you might raise some equity financing here, no debt ideally.

Stage 3 – Monetization & Systemization

This is the first stage where you’ll start to make profit.

This is the stage where when it’s complete you’ve got a viable business.

Your objective now is to get customers.

Many new and naive entrepreneurs think their idea is good but underestimate how hard it is to get people to reach into their pocket, take their hard earned money out and give it to you. This is the stage where you’ll figure out how to crack the code.

Your objective at this stage is to build a Profitable Sales & Marketing Machine, which means you’re able to spend $1000 to get more than $1000 back preferably $2000+ back.

This is the number one most important inflection point for most entrepreneurs usually because for most it’s the hardest.

If you’ve done the first two well they will make this step easier but it’s likely still tough.

When you succeed though this paves the way for massive entrepreneurial success few ever realize.

This is where all the skills of Profitable Marketing show themselves as the most important skills for the small business owner.

You know you’ve succeeded at this stage when you can spend money to make more money in return than what you originally put in.

This means sales aren’t dependent on you but on a structure you’ve built outside yourself and that structure is profitable.

When you reach this point you can put a lot of energy into systemizing to crystalize what works.

Notice you didn’t invest heavily (you might have minor systems in place) in systemization until this point why?

Because at this stage you’re going to start throwing volume at your systems stress testing them and how you did things at low volume is likely to change at higher volume so you didn’t want to invest too much time into something you were going to change anyway.

Now you’ll need them to grow though so get them in there.

You’ll almost certainly have at least a few employees at this stage in fact usually you should have your first employees or partners in Stage 2 but only a small team.

In Stage 3 you’ve essentially got two divisions working on the two core problems in business: supply problems and demand problems; but it shouldn’t be a large team and not overly complex.

This is also the optimal stage to raise equity financing (maybe debt once you’ve cracked the monetization code but usually not).

The reason is it’s easier to get money now, the cost of the money will be lower and you’ve got a clear path to use it to help you grow fast.

Stage 4 – Optimize & Scale

This is the stage where you make all the profit, where you can get rich.

Up till this point in time most of the profit coming in was consumed acquiring customers.

This is where you’ve got the customers and you’re leveraging them to create real ongoing profit.

Whereas the primary skill in Stage 3 was marketing the primary skills in Stage 5 are management and strategy (Leverage Team & Grow Impact).

Your first objective is to optimize everything you’ve built up to this point in time so it runs like a highly efficient well oiled machine.

This process of optimization will never stop but here it’s a big focus.

Why do you optimize before you scale?

Because otherwise you’re scaling an inefficiency and those inefficiencies are going to get in the way of you scaling.

This is where you put proper branding into place.

You’ll definitely be hiring and training great people here as well as getting rid of any bad apples.

Your team is about to grow A LOT in fact one of the biggest gaps we see in businesses who nail Stage 3 is they get stuck because they don’t understand how to systemize and build a team. They are dependent on themselves or key people rather than on processes. At this stage you need process oriented thinking.

When the foundation is raised with boosted profit margins, efficiency, etc. it’s time to scale.

Scale is all about taking what you’ve got that works:

  • Products/Services
  • Customers/Markets
  • Systems/Technology

And figuring out how else to use it so the value grows.

For example, you’ve got existing customers what more can you sell them?

You’ve got products and services what new markets and market segments can you introduce them to? This might include franchising.

You’ve got technology or systems that work where else can you utilize them?

This is a phase of aggressive reinvestment of substantial internal profits.

This is the stage where you’ll really be looking to debt financing to grow because there’s no real reason to raise equity, which will cost you a lot more long term when things are working so well unless for some reason you can’t tap the debt markets.

Franchising would be an example of tapping equity without giving up a share of your company.

This is the longest and most significant stage of most businesses. Most even very big companies never fully transition to stage 5.

You know you’re ready for Stage 5 when profits are adding up faster than you’re able to allocate them internally.

Stage 5 – Protect and Compound

The big focus here is realizing you’ve got a great money machine and you need to protect it.

Here the risk of loss of what you’ve got is greater than the benefit of finding something new.

As a result, a huge focus at this stage is risk mitigation and risk management to protect against threats, which might come after your core cashflow machine.

These are going to include litigation, competition, serious systemic risks, over-extending, etc.

After ensuring you’re protecting what you’ve got you need to start looking outside for places to deploy capital.

In this phase you’ve mostly gone from seeking investment to being the investor (though you might still utilize debt markets to boost returns).

Warren Buffett likes to buy Stage 5 businesses and your job is now to become Warren Buffett.

Whereas the main skillsets in Stage 4 were management and strategy your primary skillset in Stage 5 is capital allocation.

Assets, growing assets, and ownership are everything here. (The skills of Multiply Ownership).

In a sense you’ve moved from CEO to Chairman.

With a huge war chest, you’re looking to mergers and acquisitions as well as other investments potentially outside your normal line of business.

This is for example what Google recognized in creating the Alphabet parent company to fund other investments.

This is the highest level of business.

You may never want to go here and certainly you don’t have to.

While it’s great to buy businesses in Stage 3 it’s great to sell them at Stage 4 and many people do.

If you choose to hang on and build a lasting empire this is where Stage 5 and Stage 5 skills come in.


These are obviously the high level skills and stages of building a company.

In practice each has deep core pieces and understandings to transition through, which is why Richucation exists to support and accelerate you in going through this process.

If you’re interested in the next step for you and how to accelerate your business growth contact us.

Simple 4 Step System of Money Management Will Leave You Feeling Relaxed and in Control


Proper money management will make or break your financial success. Most people have no idea where their money is going and could probably be saving at least 30% without giving up any benefit of the dollars they are making.

I was shocked a few years ago when I gave a talk on the Essentials of Becoming Rich and in the feedback forms the most commonly appreciated area was on money management.

Apparently most people realize they could be doing a lot better in this area but it’s cumbersome to keep track of and optimize and gets pushed to the back burner.

We’re going to walk through the Richucation system of money management to show you how to make this really easy.

It addresses the most common problems and fits within a larger structure of getting amazing deals.

We call this Waterfall Money Management because you can think of it like water flowing down a waterfall. This speaks to THE SEQUENCE, which we notice continually is the gap people have.

Don’t worry it’s super easy and you’ll end up way ahead by following these 4 simple steps in order.

Background – This Will Magnify All the Rest

You could in theory simply start following the 4 steps of money management and adjust as you go but if you want to get the best results there’s a foundation you’ll want to do.

The foundation of all money management is measurement.

Quite simply you’re going to measure everything that goes out and everything that comes in.

This is quite simple the key is being thorough.

When we talk with most people and look at their estimates they almost inevitably miss expenses, which is a HUGE problem in small business, can prevent you from getting loans and hurts you in making the most of your money.

Two things tend to get into people’s way:

  1. They tend to under estimate how much they are spending – for example when it comes to food people routinely tell me $450/mo. is high but this is only $5/meal 3 meals per day 30 days per month and if you eat out at all you know $5/meal isn’t much at all. The solution is to measure rather than guess.
  2. They tend not to account for non-recurring expenses – for example the repairs to you car, the purchase of a new computer or furniture, emergency medical care, etc.

The way to do this most easily is make a list of everything you use in your life or business from clothing to food to furniture to electronics to vacations to gifts and everything in between. If you’ve got pets or kids make sure you account for them, etc.

Now figure out how often you pay for this and how much.

Finally, break this down into an annual and monthly figure.

For example, if I need to buy a new bed every 10 years and it costs me $2400 then this is $240/yr or $20/mo.

If I’m spending $300/mo. on groceries this is $3600/yr.

The goal here is to end up with a monthly amount you’re spending for everything in your life.

Note, this isn’t a budget, this is simply a measure of what you’re spending on average per month in total.

Of course you’re not spending this amount every month but some months you’ll spend more so we want to be aware of the average.

When in doubt estimate high or round up. Better to have too much than too little.

Revisit this list periodically to make sure it’s still accurate and adjust accordingly after all our lives change.

From here we can continue to the management of the money as it comes in.

Step 1 – Profit First

The first biggest change you can make in your financial management is to spend what remains after saving instead of saving what remains after spending.

This is super simple and super powerful psychologically. I cannot describe how much different this has made in the lives of people all over the world with just this tiny change.

It’s very straight forward.

Pick a percentage, any percentage is fine I recommend at least 10% and to target 30% anymore usually is excessive and take it right off the top of whatever you earn.

You earn $5000 this month? Take that percentage out and put it in a separate account or someplace you can’t touch it.

This becomes your investment fund. We discuss what to do with this depending on what stage you’re at in the Wealth Scales Map.

The reason this works so well is because just as work expands to fill the time spending expands to take up money.

There’s some strange psychological magic where if we have a constrained money supply we spend less. If we give ourselves more we spend more.

By taking a fixed percentage out for our profit fund right off the top we automatically get ahead every month.

To recap every dollar you bring in from any source take a fixed percentage set by you in advance (ideally start with a minimum 10% and as you get your income up and expenses down aim for 30%) out and put it in a profit fund which you’ll use for investing (growing your income) and nothing else.

You never touch this money it is for growing your wealth and your dreams long term. It’s what makes sure you’ve got an amazing life for the rest of your life.

Think of this as money accumulating in a beautiful lake at the top of the waterfall.

Step 2 – What No One Talks About & Where Everyone Goes Wrong

You’ve now got the majority of your money and it’s time to spend right?

No, not quite yet.

Here is where most people go wrong.

Most people spend on their short term needs without budgeting for their long term expenses so this is what we’ll do next.

Remember how you identified all your non-recurring expenses previously and broke it down into a monthly amount?

Take that amount of your total after removing the profit.

For example, let’s say you’re bringing in $5000/mo. and have a profit fund of 10% or $500/mo. This means you’ve got $4500/mo left.

Say all your long-term expenses like:

  • Car purchase
  • Non-monthly maintenance
  • Vacations
  • Gifts
  • Annual memberships
  • Possibly taxes
  • Etc.

Add up to $1000/mo.

Take out $1000/mo and put it in your long-term spending account.

This is an account you only touch for those long term non-recurring expenses you budgeted for.

Again, it’s very simple.

People go over their budget, get into debt, etc. because they haven’t planned for these non-recurring expenses. So long as you’ve accurately calculated them (if you haven’t then you can adjust as you go along revisiting that original list) with this system you’ll always be good.

You’ve now got two accounts your profit account used only for investing (your priority because this is essentially investing in you, your future, your dreams, etc.) and your long term spending account used only for those non-recurring expenses you previously measured.

To recap you do this every month withdrawing the money right off the top after withdrawing the amount for your profit fund and before you pay for anything else.

Step 3 – Take Care of Your Needs

You’ve now removed everything you need both to your profit fund and to your long term spending fund.

What’s left?

Pay for your necessities.

Note, there’s nothing specific that’s a necessity vs not it’s all based on what’s important to you.

Maybe this includes interests, hobbies, dining, rent, etc.

The important point is you’re free to spend on these things because you know you’re getting ahead each month and you know you’ve already taken care of your long term spending.

You do want to ensure you pay for the things you need to vs simple pleasures or well of course you won’t have money for those simple pleasures, which is why we specifically mention your needs here.

This being said this section is easy if you’ve nailed the first three.

Finally – Have Fun!

Whatever is left after paying for your needs form your slush fund.

You can do whatever you want with this money.

Ideally, everything from the start till this point is built around serving your values vs being compelled into serving the values of someone else.

This system is as natural as water flowing down a cliff, hence calling it Waterfall Money Management.

If you think about it this is exactly what you do but organized into an organic sequence to make sure you’re taking care of yourself.

Measure what is coming in and going out. Break it down into monthly and yearly costs (this is important as you expand into reducing those costs, which we find most people can reduce their costs by 30% without suffering any in terms of their quality of life – you can explore how in Get Deals training).

Set aside your profit fund, the beautiful lake forming at the top of the mountain feeding your future.

What’s left starts flowing down in spending but you make sure to take out your long term spending first so it’s covered and you never end up short.

Then you spend what’s remaining on your needs.

If you’ve got anything left you spend it freely however you’d like on random unbudgeted pleasures.

Because this system works on percentages (you can explore more about how to save money in other trainings so you’ve got a lot more to save, grow, and invest into your values) it scales perfectly as you grow you don’t need a new system you’ll always be well served with this method.


This is a foundation point to build on.

From here you can start applying principles like the Dream Life Ratio, The 3 Ways to Save on Taxes, The 3 Dimensions of Value & Cost Halo, the 5 Ways to Get Great Deals, etc. all found in our Get Deals training.

In my experience both in my own life and businesses ranging from my spa to events company to wholesale company, etc. as well as working with many other people and their companies we’ve found usually you’re able to reduce your costs or increase your value by at least 30%.

Do the math how much are you spending now?

Imagine if you were saving 30% of that.

What kind of a difference would this make?

All without taking on any risk and achieved quite quickly and easily.

Remember you could either go make more (hard) or simply keep more of what you’ve already made.

Ultimately you should go both but one is certainly an easier place to start.

If you’d like assistance reach out to us for the next steps.

Wealth Formula Booklet

The Wealth Formula

Real Example – How to create a $20k/mo. income

Decisive Analysis Video

Follow along step by step as I show you with a real example how to Hit Your Business Growth Goals Every Time!


To receive the Fill-in-the-Blanks Action Plan described, please enter your name and email to download it now to follow along step by step on your own revenue goals.

Revenue Growth Action Plan

Did You hit your business ​& Income goals last Year?

If you did bravo!

I know for many years I would fail at it consistently and I work with clients all over the world who do as well.

The great news?

There's a process to do something about this and start hitting your goals predictably or at least get much closer.

I'm going to show you step by step how to reach your financial goals this year if you're willing to follow along.

​The question is what are your income goals?

​Are those goals ​worth committing to putting in the work​ to you?

What difference would it make in your life to earn as much​ as much profit as you're targeting?

You know how it's been... Year after year, setting some goal filled with high hopes and ​then the next year comes and the same goal is there over again.

You know what? It's frustrating and disappointing and humiliating to the point where some people tell me they don't set goals since they won't hit them anyway.

What a sad way to live. What are we here for if not to aim for something amazing in our lives?

But it's not enough just to aim high, life is here to be lived!


It’s not enough to aim high, life is here to be lived so let’s achieve it!

So, why do we fail and what can we do to actually live the life we dream of?

If you ask people why they fail they’ll list some common answers:

  • Didn’t act
  • Got distracted
  • Don’t know how
  • Lack of self confidence
  • Etc.

We’ve got a principle at Richucation the answer usually lies “a level deeper”. ALL of the value is in depth and by going a level deeper we start to get answers.

In other words, I know you didn’t act my question is “why didn’t you act and what can you do about it?”

A few years ago, I started to crack the code and not only become much more successful but also help others do the same.

There’s a process I’m going to teach you. I’m going to expose to you the obstacles that get in the way and what to do about them.

What it’s going to give you is more than just a blueprint to hit your goals it’s going to give you a system of thinking you can apply to magnify success in all areas of your life.

It started from a year end review. Each year I’d review my goals and progress from the previous year to see how I did and what I could do better aiming to be really honest with myself and then set the next year goals.

My initial step was to go from setting goals to making a plan.

Did you know research shows if you simply think of an action item you’ll take towards a goal you are 56% more likely to act?


Research shows you’re 56% more likely to act if you’ve thought of an action step towards the goal.

This wasn’t a magic bullet though and I didn’t hit the goals though I made slightly more progress.

The real progress came when I started to consider what got in the way.

I didn’t act - why not?

I got distracted - how come?

I tried affirmations for a while, vision boards and all that other nonsense... it doesn’t work. 

More importantly, let me ask you this. Have you ever had something you wanted with a burning desire and you actually achieved it?

Did you have to affirm to yourself each day that you were doing it or create a vision board?

Of course not!

The desire was deep inside of you. If you need a vision board or something like it to remind you of your goals they probably aren’t very real goals for you.

So, start by getting honest about what you actually want. 


Start by getting honest about what you actually want.

For example, for me I learned I didn’t actually care to be a billionaire. This might sound obvious or vain or something, but about ten years ago this was an ego goal for me and year after year I failed at it while achieving other things.

Now, I’m not going to tell you some nonsense about, “if the why is strong enough you’ll figure out how” and, “you’ve got to get clear on your why”.

I’ve been around a lot of seminars and books and courses on this stuff and I’ve NEVER seen that stuff actually work. People go through these processes to uncover their why and end up in the same place they did the previous year.

Then again there are simple things where they don’t have a burning why that they do accomplish.

Think about it, every year you do dozens of things and you accomplish a lot without vision boards, without some fancy why process, etc. And yet tons of things you tried to apply these fluffy techniques to, didn’t materialize. What gives?

I realized there are two types of goals and we achieve them in completely different manners. The first type, most people have a pretty easy time with, it’s the second where we get stuck.

Type 1 Goals – Essentially To-Dos

The first type of goal is where you’ve already got everything you need in order to get it done you just have to do it.

These are relatively straight forward you make a list you commit a bit of time and you do it.

For me these were things like hiking up a mountain near where I lived or getting a new computer.

Chances are you don’t need help with these goals. If you do here’s a simple process:

  1. Make a list of what these things are.
  2. Get someone to do them with you.
  3. Set a time/space/resources to do it so it’s booked and committed.
  4. Go do it.

If you’re struggling chances are it’s a type 2 goal.

Type 2 Goals & the Law of Procession

Type 2 goals are goals where you DON’T have everything you need to accomplish them.

In other words it’s not as simple as “go do it”.

This is why people get stuck on the action piece and this is where I’m going to show you exactly how to hit your financial/business goals and the principle applies to others as well.

Let’s say my goal is to run 100 m in 10 seconds. I probably won’t accomplish it. Why not?

Because it’s not a matter of going and running 100 m. If my goal was, “run 100 m” it would be easy. I go outside, I’d do it, I’d check it off I’d be done.

The problem is I don’t have the physical conditioning or even the knowledge of how to physically condition myself to hit this lofty target.

In other words Type 2 goals are goals where it’s not a direct A to B relationship you’ve got to do A to B to C to D to E to F or any number of other steps.

Here’s the key…you often don’t know what B, C, D, etc. are.


One of the top reasons people get stuck is they don’t know what to do or how to do it.

People let not knowing stop them rather than programming themselves to get curious and find out how.

Anything is possible if you break it into small enough pieces

The solution is to figure out how to break it into small pieces each of which can become a simple to-do style Type 1 goal.

In other words, you want to achieve your big complex goals? Simple, figure out the small doable next step and make it your new goal.

Don’t worry I’m going to show you how to do this for any financial goal.

There’s two other reasons you’ll run into obstacles to hitting your goals and we’re going to cover them in a moment as well.

First, let’s dive into the Financial Goal Achievement Framework showing you exactly how to get from where you are to $20,000/mo. or whatever other target you’ve got (the principle is the same for $100k/mo or $1 million/mo).

The Framework of EVERY Financial Goal

If you haven’t done so already now would be a great time to download the Free Worksheet we’ve created for you so you can follow along with your own goals here:

Revenue Growth Action Plan

There’s a basic formula to achieving any financial goal we’re going to use to take your complex goal and turn it into simple to do action steps.

The basic thing to start by realizing is all bigger financial goals are made of individual transactions.


A transaction is any case where you do something for someone in exchange for money.

This might be providing a consulting session, doing a plumbing job, selling them a phone or clothing, etc.

Each transaction has a certain value associated with it. For a simple example I'm going to use the numbers of a client we went through recently on a $20k/mo. goal.

In his case he’s got a small business helping gyms and personal trainers and he put them into a program he runs where they pay him $500/mo.

Action Step -  For yourself figure out what your average dollar transaction is

This might be the value of a customer per month if they engage with you on an ongoing basis or it might literally be the average amount someone spends with you when they visit your store or website, etc.

Take your total goal and divide by whatever this number is. For example, in our client’s case the number is $20,000 divide by $500 = 40 transactions required to hit his target goal.

In other words, your new goal isn’t to make $20,000 it’s to do 40 transactions…much more actionable but we’re still not there yet because the question is, “how do you do these transactions?”

If you’d like to learn some ways to charge more and otherwise raise your average dollar transaction so you don’t need to do so many transactions click here.

The next question is what is your conversion rate on your sales activity to successfully get one transaction?

This might sound like gibberish so let’s make it clear. Say people call you to inquire about working with you. What percentage of those who call (or meet with you, or walk into your store, or visit your website or attend your seminar, etc.) actually buy?

For example, in the case of this client if he did calls with 5 people 1 of them on average would become a client.

This is a number you’ll need to measure in your own business. If you aren’t measuring right now you should be but for now you can guess. Be aware your guess is almost always optimistic so I’d suggest cutting whatever you guess it is at least in half.

Action Step – measure and record your sales conversion rate

If you’d like to improve your sales activities so you get a higher conversion rate and don’t need to do as much sales click here.

Take your number of transactions and divide it by your conversion rate this will tell you how many sales activities (again a sales activity might be number of people who call inquiring about your service, visitors to your website, sales appointments you do) you need to do to hit your goal.

We call each of these people you’re interacting with for a sales process “leads” or “prospects”.

Not only does this tell you how much sales activity you need to do it also tells you how many leads you need to get through the process we call “lead generation”. Lead generation is also sometimes called “prospecting”.


Lead generation is just a fancy term for getting someone to express interest in your product or service.

In the case of our client 40 transactions divided by an approximately 20% conversion rate (1 in 5) equals 200 leads he needs to have sales conversations with.

His new goal is therefore to have 200 sales conversations with prospects. It doesn’t end here though because in his case this is where he would really get stuck.

How do you get those 200 leads?


You get leads by distributing a message to an audience

Once again, you’ll have a certain % of the people who receive the message who will actually be interested in what you have to offer so we need to figure out what that % is and work backward to determine the audience size.

Action Step – measure your lead conversion % and record it

Once again your conversion rate is probably lower than you think it is and this is ok, the idea is to get accurate numbers to figure out what’s needed to hit your goals.

If you’d like to learn how to improve your lead generation so a higher % of your audience become interested in your product or service click here.

This lead conversion % will tell you how many people you need to distribute your message to, we call this your list size.

In other words to get x number of leads, which with the right sales activity will result in a certain number of transactions you need to distribute your message to a certain number of people.

Action Step – record the number of people you need to distribute your message to (list size)

Very often the gap we see in working with clients is they aren't distributing their message to enough NEW people.

If you’d like to learn how to get a HUGE list of TARGETED prospects so you can generate a flood of interested buyers click here.

This is the final piece of figuring out the overall actions.

You should now have the following numbers:

  • Goal expressed in dollars per period (usually month or year)
  • # of transactions required for the goal
  • # of leads necessary for this number of transactions
  • # of people on the distribution list necessary to get this number of leads

We’ll now get into the real meat of making this happen.

Gap Analysis of the Framework

The above exercise was hopefully pretty easy for you if you’ve got questions please send us an email and ask your question.

On it’s own the high level plan isn’t enough though. We need to dive into specifics to figure out where you might get stuck and build around it.

The first common gap is skills.

Note the difference between skills and knowledge, between knowing what (like you’ve read about it) and knowing how (having actually done it).

There is no more important skill than learning to learn and since you need to learn to predictably change your life you benefit a lot from learning to learn better and faster.

If you’d like to learn to learn much faster and easier click here.

Do you know how to fulfill on those transactions? We’ll get more into how this becomes complex as you grow and what to do about it.  If you'd like to find ways to increase what each customer is worth so you need less transactions click here.

Do you know how to successfully complete the sales activity? If you could use improvement on how to communicate with prospects to get them to buy click here.

Do you know how to communicate a message to cold prospects to turn them into leads? If you could use improvement in your lead generation communication click here.

Do you know how to identify and build the list of enough people to hit your goals? If you could use help in identifying and building the list of the ideal target customers click here.

If you lack skills in any of these areas you need to identify it so you can make developing one skills one of your new goals to reach the big goal. Good news is you only have to learn once so each time this will get easier.

Action Step – record any areas where you could use improvement in your skills to reach your goal

Next, let’s break down from the bottom up each of the things you’ll need to take action on each step of the process:

  1. Building the list – do you have the list? If not then getting it needs to become one of your new goals – note this comes after learning how to get the list in case this was a gap.
  2. Message & content to communicate to the list – how are you going to communicate with them and what’s going to be communicated how? This might include bullet points of a script, images, documents, written information, recordings, etc. If you don’t have this creating it needs to be one of your new goals – again this comes after learning how to create it if you don’t know how.
  3. Process & content for sales communication – what and how are you going to communicate with prospects during the sales/conversion process? This might be a website, it might be a sales process, it will definitely include an offer and a process of being able to accept their payment. Do you have all these things? If you don’t then these need to be your new goal – as always these come after learning how to do these things in case learning is a gap.

At this stage you should have a list of any of your gaps in materials to reach your goal and also a list of skills gaps.

Let’s dive briefly into how to address those skills gaps because not knowing how to address them could be an issue.

Addressing Skills Gaps

Richucation is largely designed to help you with this so in most areas contacting us is a simple starting point.

Beyond contacting us you should have some action items to address those skills gaps as follows:

  1. Identify someone who has done it successfully, so you can copy and possibly learn from them.
  2. Identify some resource​ (might be a person, book, video, course, article, etc.) to help you learn and overcome this challenge – naturally Google, Youtube & Amazon are great resources here.

​Richucation​ tip – when you don’t know get in the habit of asking people, “who would know?” They might not know but eventually asking enough people will lead you there.

What if you try something and it doesn’t work? Simple, you cycle back to the learning to figure out how to overcome this challenge. Learning should take place through a combination of: asking/copying, trying, thinking about how to do it better in a nice cycle.

Resource Gaps

At this stage you’re getting close to the end (not so hard right), you’ll soon have converted a Type 2 goal you weren’t likely to achieve into a Type 1 goal you can easily achieve.

But first we need to address one more gap that could get in your way.

You’ve now got a list of things to do, which should be prioritized in order as follows:

  1. Things to learn along with action items you can take to start learning them.
  2. Materials to get to fulfill on the list, lead generation, and sales to make it happen along with action items to get them.
  3. Actual transaction, sales, and lead generation activities required to hit the goal.

Note you should be starting at #1 and progressing to #3. Most people skip #1 & #2 and go straight to #3 and get stuck because they can’t achieve what they want to achieve, which is demotivating and they slow down or quit, get distracted and forget about the goal for the next several months maybe till the end of the year.

In order to ensure you actually do these things though we need to make sure you’re able to do so.

If you’ve got the skills why might you not be able to do them?

A lack of resources.

This comes to one of the most important breakthroughs I had in going from simply setting goals to actually achieving them…identifying the price and resolving in advance to pay it.

I’ve often had employees who are shocked and demoralized when something doesn’t work or takes a long time, etc.

I’ve discovered something powerful though. This is only a problem if you don’t expect it. If you go into it in advance with the attitude that, “this will take many long hours spent over several months” or “this is going to cost me $5000 in learning costs” then it’s no big deal when the learning curves and challenges come up.

Similar here.

You need to identify what you’ll need in order to do all these things: the learning, the content & process building, and the actual activities to hit the goal.

The best way I’ve found to do this is to look at each activity and determine where it fits on a per unit basis with what we call in Richucation The 6 Resources.

Briefly, the 6 resources are:

  1. Time
  2. Money
  3. Expertise
  4. Relationships
  5. Reputation
  6. Assets

In this case we can clarify a few points:

First, Time also needs to account for timeframe. What is timeframe? This is the period over which something happens.

  • For example, you might have 40 hours of work to do but this doesn’t mean it will get done in 2 days it will probably take at least 5 days because you only work 8 hours per day. In fact probably with all the other things to do it will take at least 2 weeks. 
  • So you need to account not just for the 40 hours (time) but also the 2 weeks (timeframe) depending on people’s schedules and when things come back.

Second, expertise is always expressed in terms of someone’s time since it takes time to utilize expertise.

Third, assets can include: space, equipment, infrastructure, etc. These also need to be expressed in terms of units of time since you can only occupy space for certain periods of time without interfering with the space others need. Likewise, for equipment and sometimes infrastructure.

The resources are the “price” you’ll pay to hit your goal.

For example, returning to our client and their ability to fulfill on those 40 transactions they require a little under an hour per week per client/transaction so for easy numbers let’s say fulfilling on 40 transactions requires 150 hours per month.

You could also describe this in terms of expertise since it’s not a purely mechanical task.

Next, he needs approximately 1 hour per sales call, which as you recall was 200 calls so this is 200 more hours in a month bringing the total time to 350 hours.

Then the lead generation activity requires spending money on advertising as well as some time spent monitoring the ads.

His small business is relatively simple but for other businesses this could be much more complex. For example, another client provides oilfield services where pumps, fluids, trucks, fuel, hotels, wages, etc. are all required to deliver to clients.

Bottom line, go through your list of activities and for each activity figure out all the resources necessary to complete this volume of activities. If you’re unsure then estimate high. Budget for these in advance in terms of time, money, space, etc. and be willing to pay them, later you’ll be able to optimize by trying to get those numbers down.

  • A note on money – this might include the ability to pay wages, pay for inventory, rent, equipment, supplies, etc.
  • For example, in my one company we imported products from China and we needed to be able to have enough in inventory to sell to customers but also have enough on order for it to arrive by the time inventories ran low. This meant we needed large amounts of cash to cover the inventory between the time of ordering and selling. 
  • Some of our clients have to pay their bills before they get paid by their clients so they need money to cover the cashflow gaps. Be sure you account for these.
    If you’d like to learn about how to raise money click here.

Take the totals and compare to your actual resources available:

  • People
  • Time
  • Space
  • Equipment
  • Infrastructure
  • Relationships
  • Money
  • Etc.

Identify any gaps between what you have and what you’ll need.

In many cases what you’ll see is your goal as you’ve projected it is unreasonable because you don’t have the resources to deliver on the goal in terms of time, etc. This is actually GREAT news because you’ve identified the gap and now can work around it.

How do you deal with resource gaps?

The same way you deal with expertise gaps. Addressing them become your new goal, which you record as action items within your plan.

What are the action items?

Resource gaps are pretty much always addressed in three ways:

  1. Develop better expertise so you require less resources
  2. Develop and reach out to relationships to help you address these – this might include employees, partners, investors, financiers, friends, and community
  3. Start small and accumulate resources you can use to buy more resources so you gradually build up what you need – this will take longer and you might not hit your goal but at least you’ve got clarity in how to get there

That’s it now you’re ready for the final step in making this all come together.

Schedule of Action

If you’ve followed along properly you should now have a list of action items with associated resources attached to each of them including actions to develop expertise and to overcome any resource gaps, which of course also take resources.

These actions are essentially to-dos or Type 1 Goals.

Using this information your task is now to go through and schedule these activities. At Richucation we say, “what gets scheduled gets done” so pull out your calendar and start blocking off when resources are assigned.

This might include the calendar for your staff members as you delegate to them (hopefully you scheduled time for management if this is the case as it’s very important, or recruiting if you need to add people to your team to hit your goals).

If you’d like specific proven strategies to find and recruit the best people to your team click here.

Finally, make sure you schedule reviews into this process and resolve to pay the price (time) to review and correct.

Leverage relationships to work with you on this and hold you accountable. Set consequences for yourself to that person if you don’t follow through to keep yourself on task and reward yourself when you do well.

That’s it!

You’ve now gone from a goal to a plan.

You’ve overcome the challenges of not knowing so you don’t get stuck.

You’ve accepted in advance what it will cost and resolved to pay the price along with figuring out what you’ve got, what you need and the actions to get it.

You’ve scheduled the actual activities to get them done.

Now it’s up to you.

If you haven’t done so already I encourage you to download our free worksheet to go through this process on your own either by printing it or on your computer. Not only can you fill it out it includes instructions to help you.

If you enjoyed this article please share it with your friends and people you know who would benefit on Facebook, by email, etc.

Reach out to us if you might be interested in going to the next level in your business.