Yesterday I broke down Part 1 in my series on the “hierarchy of getting rich”.
Which was all about acquiring a money-making skill (a few examples I used were copywriting, media buying and sales).
Having that money-making skill is the foundation of getting rich.
And without it, you probably ain’t gettin rich.
However…
Simply being good at copywriting…
Or being good at media buying…
Is NOT enough to make you rich on it’s own.
Why?
Cause there are other factors in play.
And that’s what I’m gonna dive into today.
First things first….
You need to understand that it’s not about how much money you make…
It’s about how much money you KEEP.
And here’s what I mean by that…
I remember the first year I hit 6-figures in income, I was on cloud 9.
I thought I had it made.
I never imagined I would be making that much money.
So what did I do?
I started to spend a LOT of it.
I got a nicer apartment…
I leased a $55,000 Jeep…
And I would drop $200-$300 on shots of Ciroc for me and my friends without thinking twice.
So even though I was making good money…
My net worth wasn’t actually going up.
Cause my expenses went up significantly.
Maybe you can relate to this…
Maybe not…
But after coaching hundreds of entrepreneurs and copywriters, I can tell you this is VERY common.
Once you start making more money, there is a natural urge to spend more.
Might be on a nicer house…
Or a cooler car…
Or even sending your kids to private school.
You’ll feel the need to spend more.
Cause after all, you “made it”…
And now it’s time to enjoy the fruits of all your labor.
But like I said, this is a recipe for disaster.
If you start making a lot more money, what you really should do is try to keep your expenses the same as they are now.
At least for a year or two.
Sure you can splurge on a few things…
But you absolutely do not want your spending to go up at the same rate that your income goes up.
That’s how you wind-up making $200k a year and living paycheck to paycheck.
You don’t want that.
What you do want is to take the extra income you’re making, and invest it into things that will make you more money.
That could be index funds…
Could be real estate…
Or it could even be investing in your own skills (like getting better at copywriting or learning how to start your own business)
Your goal should be to take the money that you’re making, and turn that into MORE money.
This is very simple in principle…
But very hard to do in the real world.
Cause like I said, your natural tendency is going to be to celebrate your newfound success and start upgrading everything in your life.
But if you want to end up rich…
You have to avoid this.
You have to keep your expenses in check.
Even when I was at my peak (earning over $2 million a year) my expenses were still only $200k-$250k a year.
That’s pretty low for that kind of income.
Most people making $2 mil a year are easily spending $700k-$1 mil a year.
So by keeping my expenses in check…
I was able to invest a few hundred thousand dollars every single year…
And I have a lot more money today because of that.
So there ya go…
That’s Part 2 of the hierarchy of getting rich.
Hope this was insightful for you.
If you have any questions feel free to reply to this email and let me know.
I’ll be back tomorrow with Part 3…
Enjoy your Wednesday.
– Justin
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