In today’s episode I answer Patric’s question on how to get out of the Rat Race and apply the 80/20 rule.
To me, the phrase “getting out of the rat race” represents the desire and drive within most of us to live our passions and achieve financial freedom
Unfortunately, Most people are prepped and conditioned for the first eighteen or so years of their lives to compete in the rat race, and then the subsequent four years or so they go to college to increase their knowledge and skills to become expert rat-race-aholics to get a so-called edge on the competition.
Instead of trying to win the rat race, what if you could consider exiting the rat race altogether. Besides, unless you’re a surf rat, river rat or mall rat who wants to hang out with a bunch of rats anyway?
So, how do we stop the insanity and get out of the rat race?
- First it takes a complete shift of your perspective from “exchanging time for dollars or you working for your dollars” to “having your dollars and money work for you.” In other words… see to it that your money works at least as hard as you do. Each spare dollar you have must produce a return therefore working for you! This is the secret to wealth and exactly what set me free with 80% of my results coming from 20% or less of my efforts over time
One other thing I can’t stress enough in the 80/20 rule is build strategic partnerships and the right relationships, nothing will yield you more wealth than having the right mentors, relationships and strategic partners
- If you are in a job or position where you can’t produce more dollars because of an income ceiling, try to reduce your monthly expenses to actual necessities. Notice, I didn’t say reduce your debt, I said reduce your expenses. There’s a difference, and it is important to keep your debt to income levels in control as well.
- Then choose a cash flow vehicle. There are several types of passive income. The most lucrative of all is long term real estate holdings, then royalties, and licensing agreements, patents and things of that nature to create your passive income, and then implement it. Even if it’s just $100 a month of passive income to start, get started. This is where many people “think” they know how to get out of the rat race but never get out. They dismiss the small amounts of cash flow from passive sources as not a big enough step, so they never take that first step. And because they never take that first step, they never get out. They all too often dismiss the rules of compounding.
I want to make a quick distinction out there right now. There are a lot of other advisors in the podcast world and elsewhere claiming to the path to passive income! The reality is passive income is a taxable distinction from the Govt and is not an internet sales program or business formula, that is called ordinary income and is subject to a whole different set of taxable consequences than long term real estate or royalties known as passive income.
I only mention this for awareness and want people to understand the true meaning of passive income.
With all my intention, I wish you the best of sustainable success!
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Until next time, Cheers!
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