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I’ve been cogitating on the various strategies of earning money. You see, I always consider myself self-employed, even if I am an employee for someone else. One’s income can be easily determined by multiplying the number of customers one has by the average profits from each customer.
If you are employed by someone else, then you have just one customer and the calculation is easy. If you’re an author, entertainer, or sports figure, then you have potentially millions of customer.
The more customers you have, the more secure your financial future. If I run a company and I have ONLY one customer, then my business is at risk. Should I loose that one customer, I am out of business. Now if my skill set is needed by many people, then I might be able to easily find a new customer.
But if I sell to 1,000 customers and I loose one, it is not a big hit to my bottom line. I would have to loose many customers, before I would see a serious lose of income.
There is another consideration – time. If I am a sports figure, I am limited by how many hours I can put in and how much I can charge per hour. In the case of someone like a Tiger Woods, his hourly rate is pretty good. Former President Bill Clinton now makes speeches for hire. I hear he gets $100,000 a pop. If he can give three speeches a week, then he can collect about $15 million a year.
Entertainers can do better because they can leverage their time. By making recordings and selling them, they can create a passive income that can surpass what they could do in live concerts.
I don’t have any great thoughts here; I’m just thinking out loud on how best to become rich. I haven’t quite mastered that yet.