How Do You Measure Your Wealth?

Don't forget about discretionary time.

The way I see it, we can divide wealth into three levels:

  1. Income (which you can not live without)
  2. Assets (which compound and store your income)
  3. Time (which can be invested and enjoyed)

True wealth is discretionary time. It's finite - you can always make another dollar, but you can’t make another minute.

But many consultants forget about it and get caught in the time trap.

Let's say your consulting practice generates a $25,000/month income stream - great by most standards. You’re working hard, around 45 hours a week. And you decide you want more - for your family, for your personal goals, or whatever other reason.

The problem here is simple: even if you wanted to double your income to $50,000/month, you cannot work 90 hours a week.

If you are an experienced consultant, it's fair to assume you won't be able to justify charging twice as much for your expertise in a short window of time. So your bottleneck is time.

Increasing your workload means choosing to play a short-sighted and unsustainable game. True wealth means the opposite: increasing your income and assets while increasing your discretionary time. Making more while working less.

The only way you can increase your income without sacrificing your time is by applying leverage to your work. This can be in the form of:

  • Labor: Hiring employees and contractors to serve and satisfy demand.
  • Capital: Acquire other businesses or assets that will generate more income.
  • Digital Products: Package your expertise into products with no marginal cost of replication (books, blogs, videos, podcasts, self-paced online courses).

Each one of them has its pros and cons, which I might explore in future posts. The only thing you should be aware of is that working harder won't cut it. You need leverage.

With the proper systems and strategy, you can disconnect your time from your income. Once you understand that, all you need is to partner with someone who knows and understands how to do it.

Subscribe to Boutique Consulting Club

Don’t miss out on the latest issues. Sign up now to get access to the library of members-only issues.
jamie@example.com
Subscribe