want to make money? understand the multiplying effect

How much money do you want to make every
year? If you haven’t seriously asked yourself
that, you should. Why wouldn’t you? It’s a
very easy question to answer. And until you’ve
really thought about it, it’s impossible to
determine how you’re going to get there.
When I was in my early twenties, my father
sat me down and asked me that same
question, point blank. The advice he gave me
after fundamentally changed the way I
thought about work and led me to my current
career.
I told him I wanted to make $100,000 a year.
At the time, I thought that was a lot of
money. You’ll work for about another 30 years,
he told me. So how much money would I make
in my lifetime? I did the math: $3 million.

He asked, was I happy with that amount? If I
wasn’t, what was I going to do about it?
My father was a smart man. Three million
didn’t seem like a lot of money over 30 years,
given taxes and living expenses. The math
didn’t add up: Life is short, and it didn’t
seem like enough for a lifetime of work. When
I looked at the last paycheck I had received, I
wasn’t happy.
My father told me the only way to create
wealth was to find a business opportunity
that had a multiplying effect and that didn’t
require my presence. It took me some time to
figure out what that meant. The latter part
was easy enough. He explained, “A doctor can
only help so many people in a day and in a
year. A lawyer can only try so many cases.” To
create great wealth, I needed to find
something that didn’t require my hands or my
presence. Fair enough.
The second was trickier: What did having a
multiplying effect mean? He told me that I
needed to piggyback on or create something
that would be used over and over again -- that
people never stopped needing. In other
words, he explained to me the idea of
collecting a royalty. That made sense to me.
And it’s what spurred me to start licensing
my ideas.

Today, there are many examples of businesses
that share these qualities. App developers, for
one. Franchises are another. And of course,
there are countless examples of more
traditional methods, like the stock market,
bonds and real estate.
For me, the concept of the multiplying effect
was tremendously attractive. Some people
derive pleasure and contentment from being
masters of their craft, from working day in and
day out with their hands. That’s not me. I
wanted to make money and I wanted to be
able to do new things, to constantly challenge
myself in new ways.
How much money do you want to make? How
are you going to make it? Finding my
multiplying effect -- writing a book, offering a
course and licensing my ideas -- has allowed
me to live where I want, have people working
for me elsewhere and be my own boss. It is
incredibly freeing. It works for me.
I’m not saying it’s for everyone. But I want
you to critically ask yourself how much you
want to make. And do the math.