Background
Nathan Barry (@NathanBarry) is the CEO of **ConvertKit,** an email marketing SaaS company for online creators. Before starting ConvertKit, Nathan wrote the book **Authority** on how to publish your own book.
Other Resources
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💡 If you found these notes valuable, you'll enjoy Dickie's Digest, my weekly newsletter with five epic things from the worlds of business, tech, decision-making, and productivity.
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https://dickiebush.substack.com/embed
The Four Ladders of Wealth Creation
1. Selling Time For Money
- Everyone must starting selling time for money. The goal is to move off this ladder as quickly as possible.
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💡 Skills Required: showing up consistently, being reliable, and learning new skills on the job.
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2. Starting a Service Business
- On this ladder, you are still exchanging your time for money. However, you are in charge of your schedule and what kind of work you do.
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💡 Skills Required: setting up a company, finding clients, creating proposals, pricing services, hiring employees, accounting, finance, and operations.
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3. Selling Productized Services
- Before this ladder, every sale comes from talking to a customer directly. But the key is to start generating sales without ever talking to the customer.
- Productized services take the same amount of work as selling your service, except you are paid for product delivery, not by the hour. The efficiencies gained from the systems you create are yours to keep.
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💡 Skills Required: writing sales copy, designing a sales page, processing online payments, and creating standard operating procedures.
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Examples
- A video editor charging $250 per video versus $50 per hour.
- A handyman charging $50 per visit versus $20 per hour.
4. Selling Products
- Moving from selling services to selling products unlocks leverage. You can create a product once and sell it hundreds of times with little additional cost.
- The holy grail is a recurring revenue product. These are what SaaS businesses and online membership-based communities have unlocked.
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💡 Skills Required: Customer support at scale, gathering customers at scale, supply chain management, fraud management.
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Examples
- An ebook on learning a new programming language.
- A video course on building your own productivity system.
Eight Principles to Grow Your Wealth Over Time
1. Extra time and money need to be reinvested
- For most people, extra time and money are wasted on lifestyle inflation. Instead, it should be spent on new skills or invested into your next venture.
3. Apply your existing skills in a new way to build wealth
- Leverage the skills you already have or the work you are already doing. Ask yourself: what work am I already doing that others would find valuable?
5. Use an earlier rung to fund the next one
- There is a startup cost of moving between ladders. This means the move from one ladder to the next often requires additional work on the current ladder to fund the jump.
7. Each step is easier with an audience
- Sharing your journey publicly creates a community of people who are rooting for you. To build an audience, have a goal, document your progress, and ask others for help.
2. You can skip ahead, but you still have to learn from each ladder
- If you jump a ladder, expect to progress more slowly as you learn the lessons you would have learned on the last one.
4. There's a difference between earning a higher wage and building wealth
- There is a bottleneck on how much you can earn when exchanging money for time. A raise does not make you wealthier as it does little to raise your maximum potential earnings.
6. Moving between ladders means a decrease in income
- Moving between ladders increases your earnings potential. But the immediate result will be a decrease in income. Keep the long view.
8. It takes longer than you think, but the results are incredible
- The journey from ladder to ladder can feel like an eternity. But the compounding effecting of reinvesting time and money will overwhelm even your biggest expectations.
The Three Shapes of Increasing Income
1. Stair Step
- The stair-step is how most people increase their income. They get a yearly raise or acquire an income-generating property that provides a one-time boost. This increase has a very large bottleneck on your overall wealth.
2. Linear