IPA – you heard it before.
Some people immediately think about beer and some people think in business terms and about Income Producing Activities. Me? I like both 😉
But better than IPA is the FPA! Anyone know what that means?
Well, if you’re building your own business, especially online, you should!
You see, most people who start any type of business do this because they want to create more freedom! Not only money, but they want to be their own boss and control their own time!
Just ask anyone who’s ever started a business before “Why did you start your own business? What was the REAL reason behind it?”.
Of course some people see a need in the market or they are passionate about what they do because it’s THEIRS and they are not wasting their time building someone else’s business.
But, really…..if you dig deep enough, most entrepreneurs are looking to create freedom!
And I bet, most people are actually dreaming about freedom! Even people who are stuck in their mindset “money is not important to me” I bet would admit that they would like more freedom! Right?
And this brings me back to the IPA vs FPA!
You see, in business everyone is so focused on IPA – Income Producing Activities and while this is great to make more money, it doesn’t necessarily meet your end goal to create more freedom!
Why, because freedom is created by something else than just “making money”!
There are two ingredients you must have to create freedom, no matter what type of business you run. How do we know this?
Well, just look at all the business-owners out there who suddenly became slaves to their own treadmill. They actually created “a job” for themselves that pays less per hour than working for someone else would.
The intention was to get more freedom, but most business-owners I know have actually less freedom after they started their own business. If they have a lot of money, they never have time. And if they have a lot of time, they never have money!
So why is it like this? Well, it’s because most people don’t understand and thus don’t focus on the FPA!
So what is the FPA? Yep, you probably guessed it by now. We’re talking about Freedom Producing Activities!
You see, in order to create freedom these two principles must be applied!
- Residual Income (Recurring commissions, cashflow)
Let’s look at residual income:
You actually wouldn’t need that big of a residual income to have a lot of freedom if your lifestyle needs weren’t that big.
I remember when I first started out in online biz I wanted € 3000 a month and thought that this would be freedom – if it was residual! Now, if I had to work every day to create 3000 a month, it would not mean freedom to me. But if I was able to earn 3000 euro every single month WITHOUT working for it, then I would have freedom. Because this money would pay all my bills and I could live and travel wherever I wanted.
So, the point is – Residual income is the only income that can produce a lot of free time.
Did you even know that 3000 euro a month would be equivalent to having 3 000 000 euro in the bank at 1% yearly interest? 😮
So you see, if you used let’s say 90 days to create an online business that paid you 3000 euro every single month in residual income, the value of it is FAR MORE than most people even comprehend.
Would you agree that building a business using existing tools online for 90 days is easier than finding a way to make 3 000 000 euros? Yeah, thought so.
Even if it took you a year or even 5, I hope that you now understand the value of residual income and how it must be applied if you want to create more free time!
I could be speaking about residual income for days here, but I’m not going to do that right now as it’s impossible to teach everything in a simple blog post.
So let’s move to the next principle which is leverage:
Leverage is where you can create “more time” or “more money” without YOU doing the work. It is also crucial for scalability in any business.
For example, many business-owners have people working for them. This is leverage on other people’s efforts. A famous saying is “It’s better to earn 1% from 100 people’s efforts than 100% from your own”.
But you can also use money for leverage. You invest money and you can make money from your money without spending your time.
But leverage is also crucial in order to create scalabililty in your business.
Why would you want to scale? Well, you learned that residual income creates a lot of free time. But if you’re going to do everything yourself, you might not be able to scale to the level of income (and free time) that you want.
Leverage will help you get to where you want FASTER!
Leverage will help you get MORE of what you want which in our case is FREEDOM!
And this is actually the reason why so many business owners are stuck! They haven’t even thought about this! They keep grinding it away every day and don’t even realize that the focus they have never ever will give them more freedom because they are not fucused on FPA – Freedom Producing Activities!
So what are FPA’s? Well, any activity that will give you more freedom over time.
For instance, I would rather work 1h today and earn 10 euro a month for the rest of my life from that hour than immediately get 100 euros for that hour of work.
Even though 100€ an hour is quite good if you think in terms of “normal” salary. But why would I choose 10€ over 100€? Because after 10 months I would net profit 10 € every single month from there on.
So if I spent 10h more, instead of making 1000€ I would now have 100€ a month. Now I leverage my time to create more value because at some point, even with a great hourly wage, you would need to sleep, eat and do other stuff.
But if I kept on going every single day I would in time set myself up with a lifestyle that most people dream about, but not many are willing to do.
It’s actually not that hard to do, but most people are so programmed by society, friends, family and school that they would rather choose an hourly wage and be stuck in the ratrace their entire life.
If you want freedom, you must apply the principles of residual income and leverage!
I hope this was valuable and if you know a business owner, in traditional business or online that needs to read this please go ahead and share it with them! 🙂