Building Financial Freedom: 4 Paths to Wealth

Building Financial Freedom

I attended a one day seminar workshop with Brendan Nichols over the weekend. The seminar was all about building financial freedom. I have also just finished my 2nd reading of The Iceberg Effect written by my mentor, Dean Holland. The book ultimately boils down to showing a way for building financial freedom.

Success Mindset for Wealth

Brendan Nichols is an Australian who has been teaching wealth management for a long time – 30 years long. His focus is very much on getting the right mindset for becoming wealthy (i.e., building financial freedom) rather than teaching the (secret ninja) strategies for building wealth.

What struck me were the common threads between what he was teaching and what Dean Holland writes in The Iceberg Effect. Chapter 2 of The Iceberg Effect is all about Success Starts Within. One of Dean’s favourite quotes is

Your past or present does not have to define your future

The message is clear. Your future is in your hands. All you have to do is choose to make it happen. Yes, you do have to break past the fixed mindsets and the fear of failure and the fear of not fitting in and that sort of stuff. At the heart of this journey you have to do 3 things

1. Stop laying blame – you made choices too
2. Stop justifying your actions – it’s OK to make bad choices as long as you learn from them
3. Take Responsibility.

Guess what Brendan wrote on the flip chart in the first 5 minutes. He started at the bottom of the page and wrote Lay Blame and above that he wrote Justify and then he wrote at the top of the page Take Responsibility

That is the heading of the last section in the chapter on Success Starts Within. I will use a quote

Blaming only attracts more drama and negativity – things you do not want in your life. Instead, take full responsibility for your current condition, and understand that you can change in an instant once you make the decision to do so

Brendan posted a quote which fits right here.

The principles will be revealed upon the decision.

Now that feels like a bit back to front. His message is that once you have a very clear picture of the decision (he calls it the positive outcome you want to achieve) the hows will become obvious. Now that flies in the face of what we are always being pitched – we are all being sold the principles (the hows), maybe long before we are clear on the decision (i.e., the positive outcome).

Dean writes about this in a different way – he gets us to focus on the WHY – and then he pushes us to put a number on it. That then defines for him the Positive Outcome and he dedicates a chapter to framing that a little more precisely, like where you want to live, how you want to live, and the like. He pushed me to write mine over 12 months ago  – Numbers for A Dream Lifestyle.

Pareto Principle Applied

Now this brings me to the 2nd area of massive commonality. Brendan focused directly after on the Pareto Principle – you know it, the 80/20 thing.  Now we all know this holds true in many parts of life. Let’s focus in on the principle relating to effort (rather than outcomes – like 20% of people have 80% of the wealth). Example, 80% of productivity is done by 20%. What many of us do not grasp is there are 80/20’s within the 80/20’s.

Think about 1,000 customers:

• 20% account for 80% of sales (200 people) = the normal 80/20 and then below that
• 50% of sales come from 8 people
• 4% of people buy 64% (30 people)
• 1% of people buy 50% (8 people)
• 0.09% buy 30% (1 person)

Chapter 5 of the Iceberg Effect is all about the core areas of focus. Dean had for years believed that the more he did the more success he would have. After reading Perry Marshall’s 80/20 Sales and Marketing, he discovered 80/20 and worked out his 80/20s. He found that a lot of what he was doing was wasteful effort => The lesson was to focus in on the core things that are going to contribute. Brendan simplifies this down to splitting out busy time from income time using Pareto again. 1% of emails, calls, texts, meetings will contribute 50% of your income. Focus is simple – focus on the 1% or the 5% that contribute to making money.

Dean writes – what are the income-producing activities that you should focus your time on? In this, he then makes the transition from the decision to the principles – i.e., how to do it? I have shared the picture before from Dean – focus on those 4 things. It’s in the book.

How to Become Rich

Now it is time to step back a little. How does one become wealthy? Let’s cut to the chase and use the word Rich. Brendan’s model is all about building passive income streams. He laid out just 4 feasible paths. No matter what the get rich quick schemes like to tell you there are only 4 paths open.

1. Start when you are young (say 25 to 35) and save (hard) in a tax efficient way and invest (for the long haul)
2. If you are already earning a solid income as an executive, save half and invest (i.e., cut spending right back)
3. Invest in real estate (for capital growth and rental income)
4. Build a business

What does this tell us?

• Get rich quick schemes work only one way – it is a business that the promoter is building.
• Trading and investing schemes carry too much capital risk if you want to build a meaningful passive income (unless you already have the capital).
• If you are already in your 40s and have not been saving hard – maybe too late
• If you are not a well paid corporate executive, the window for building an investment portfolio big enough has probably slipped you by.
• That leaves just two avenues – one requires access to capital (real estate) and the other less so.

Affiliate Marketing as a Business

And this is where The Iceberg Effect comes into play. Affiliate Marketing was a good way to build a business a short 3 to 5 years ago. The bad news is not many people actually succeed. There are two drivers for this:

1. The basic economics have deteriorated as competition has grown (product prices dropped, commission rates dropped, costs to acquire customers gone up)
2.  Affiliates are not getting a slice of all the commissions with business owners holding on to the back end commissions (the iceberg effect)

Now there is a way out of this – sell products

• Build your own products and your own sales system
• OR
• Partner with someone who will give you access to their products and their sales system.

And that is what The Iceberg Effect is all about. You can choose which path to follow in building your own business or finding a partner. Now this does not mean that you  cannot do both. There could well come a time when you will know enough that your positive outcome will come from building your own product business.

I have read The Iceberg Effect twice now. It is easy to gloss over the stuff one already knows. For the first time reader, the book is packed with helpful ideas which I had already come across.  To someone starting out it will feel like gold dust. What I really liked is it is clear that Dean Holland has spent a lot of time studying what works from his mentors and his reading. I can tell because there is so much overlap with what Brendan Nichols was teaching – and Brendan has been involved in this industry for 30 years alongside the likes of Robert Kiyosaki who he trained with.

It comes down to finding the right success mindset for building financial freedom top start. Then apply the Pareto principle to focus your daily effort on building your path to wealth. Affiliate marketing can be that path if you understand and work The Iceberg Effect.

The Iceberg Effect Now Launched

I had some fun this week and made a short teaser video using Vidnami (was Content Samurai). Watch it here.

The Iceberg Effect has now been launched. The book is free. We will just ask you to pay a small charge for shipping and handling. Click the image and pop in your email address to get on the early bird list.

 

Resources

Content Samurai (now called Vidnami) is a tool for creating videos from slide packs. It includes a large library of free to use video clips and images and also music. There are AI based voice effects but I prefer to do my own voice overs – they work better. They are running a Black Friday special. There is a free trial period – you will not be disappointed. Try it here

Perry Marshall’s 80/20 Sales and Marketing available from Amazon

Remove Background from Image I used an online tool to remove the background from the image of me holding the book. It is called Remove.bg It works really well and is a lot easier than using Photoshop. Free for personal evaluation use. Not an affiliate link.