In a world where financial success is often equated with personal success, understanding the principles of making money is vital. This article is based on a video by Codie Sanchez, where she shares 13 money-making lessons that have led her to multi-millions. These lessons are not about inspiration or motivation but are practical insights into the world of finance, investment, and entrepreneurship.
5 Key Takeaways
- Passive Income Fallacy: Real passive income doesn’t exist. It’s about investment income and horizontal income, where you work on multiple areas to generate revenue.
- Speak the Language of Money: Understanding financial terms and the language of finance can lead to wealth.
- Right Relationships Over Money: Building relationships that make others money can lead to greater financial success.
- Live Poor to Be Wealthy: Many stay poor to look wealthy, but the real path to wealth is living modestly and investing wisely.
- Leverage Expertise, Time, or Money: You don’t need all three; pick one leg of the “get rich tripod” to stand on.
The Fallacy of Passive Income
The idea of passive income is a 21st-century fallacy. Real passive income doesn’t exist. What does exist is investment income and horizontal income. Horizontal income means having multiple streams of income, such as a rental property or a small business, that require some time but not all your time.
Speaking the Financial Language
Understanding financial terms is crucial. Terms like EBITDA, ROI, and cash-on-cash return can take people from rich to out of the loop. Learning these terms can be the key to unlocking real wealth.
Relationships and Leverage
The right relationships can be better leverage than money. Building relationships that focus on making others money can lead to your financial success. It’s about putting people before profit and reaping the rewards later.
Living Poor to Be Wealthy
There’s a difference between looking rich and being rich. Those who flaunt wealth often have little in the bank. The real path to wealth is living modestly, investing wisely, and focusing on long-term goals rather than short-term appearances.
Leverage Expertise, Time, or Money
You don’t need all three to make money. If you have money, you can leverage it. If you have expertise, you can teach others. If you have time, you can use your sweat equity. Understanding which leg of the “get rich tripod” you stand on is vital.
Painkillers vs. Vitamins
Selling a need (painkiller) is more profitable than selling a desire (vitamin). If you can solve immediate pain, people are willing to pay more for it. In business, it’s about selling the pain, not the potential.
The Desire for Freedom
People often confuse the desire to be rich with the desire to be free. Financial freedom can be achieved through earning a lot or aggressive savings and intelligent investing. It’s about choosing the path that aligns with your goals.
The Safety of Entrepreneurship
Having a job is often seen as safer than starting a company, but this is a misconception. Small businesses often grow steadily, while big corporations can cut employees during down markets. Entrepreneurship can be a safer path.
The Importance of Negotiation
Mastering negotiation is key to getting rich. Whether it’s negotiating your salary, getting discounts, or structuring deals, understanding how to negotiate effectively leads to a bigger bank account.
- Understanding Money: Money requires attention, understanding, and continuous learning.
- Building Relationships: Focusing on people and building relationships can lead to financial success.
- The Power of Consistency: Time, focus, and consistency can lead to outsized returns.
- The Importance of Surroundings: Surrounding yourself with people who have achieved your dreams makes those dreams more attainable.
- The Art of Negotiation: Negotiation is a universal truth in making money, and mastering it is essential.
The lessons shared by Codie Sanchez are not just about making money but understanding the principles, ethics, and strategies behind financial success. These insights challenge traditional thinking and provide a roadmap for anyone looking to understand the complex world of finance, investment, and entrepreneurship. Whether it’s debunking the myth of passive income, understanding the importance of relationships, or mastering the art of negotiation, these lessons are a guide to financial freedom and success.