There is much more to life than making money. But it's safe to say that earning more money can significantly change the course of your life--especially if it's $1 million or more.
If you're wondering how to become a millionaire (and who isn't?), the answer is that most of them are self-made men and women. It's certainly possible to break $1 million mark working at a corporate job, but as most employees can tell you, you often have little say in who gets promoted ahead of you. Not to mention that a big corporate payoff usually takes decades of work. You won't find many millionaires under 35 at Fortune 500 companies.
[See 10 Ways to Start Earning Extra Money Now.]
Entrepreneurs, on the other hand, can take control of their circumstances and create opportunities for earning more money. And they can do it much faster than their corporate counterparts. How can you do the same?
In his best-selling book The Millionaire Fastlane, author MJ DeMarco lays out five paths to earning large amounts of money relatively quickly. Those five are: rental systems, software systems, content systems, distribution systems, and human resource systems. Let's examine all five so that you can choose the best money-making path for your life.
1. Rental Systems. These are money-generating activities that allow you to earn money from others renting your assets. The classic example is real estate. If you rent out a home, apartment, or commercial real estate, your clients will pay you rent each month regardless of how you spend your time. You own the asset, so you reap the rewards.
However, there are many other ways to rent your assets outside of real estate. Artists can license their photos, music, or artistic work. Inventors can patent a process or invention and license it to corporations to use. Owning the rights to a desirable asset and renting it out to others is a great way to boost your wealth.
[See The Worst States for Millionaires.]
2. Software Systems. Software systems generate money with code, and nowadays they usually do it over the Internet. This could be anything from a piece of financial software to an iPhone application--or anything in between.
The primary benefit of software systems is that they scale automatically. Anyone with an Internet connection can access your asset, which is very powerful. Once created, these assets can be scaled and sold to millions of people with very few employees. There are many Internet millionaires because costs are so low and the scale is so large.
3. Content Systems. Content systems are just a fancy way of saying, "I sell information." Selling information could mean you run a newspaper or a magazine. It could also mean that you're an author or a blogger.
Content systems turn people into millionaires when they are replicated many times. You can pair content with the Internet and sell information to millions of blog readers. You can pair content with distribution and sell books to millions of readers. No matter how you do it, content can make you rich if you get it in front of enough people. The best part? All it takes is one brilliant piece of content.
[See From Side Gig to Full-Time Entrepreneur in 10 Steps.]
4. Distribution Systems. Distribution systems are ways of delivering products and services to the masses. Some people want to create the product (think software systems) or information (think content systems), and others want to get it out to the world. That second group is where distribution systems fit in.
Amazon is a giant distributor of goods. They sell almost anything under the sun. Do they make it? Not usually, but they can get it to you. And that makes them very powerful--and wealthy.
Other examples of distribution systems include franchises, restaurant chains, and the iTunes App Store. If you can figure out a way to get good and services into the hands of buyers, then you should have no problem becoming a millionaire.
[See 5 Ways to Leave Your Job.]
5. Human Resource Systems. A human resource system just means, "I have employees running my company for me."
This one is tough because humans need to be managed. Employees need to be told what to do and how to do it. Good employees can build your business, but as a manager you always need to be there in some capacity. It's probably best to master one of the other four systems and then hire people only when truly necessary.
Regardless of the path you choose, these systems are your best bet if you want to become a self-made millionaire.
James Clear is the founder of PassivePanda.com, a website that teaches you how to earn more money, time, and freedom. Join Passive Panda's free newsletter for fresh ideas on earning more money.
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