Wealth Creation – How to Create Wealth Using Financial Intelligence

When it comes to creating wealth it seems everyone is looking for an easy way out. Well, I am here to tell you that there simply is not one. There is no such thing as money for nothing, however, ways we can work smarter, as opposed to harder do exist. I first came across the term financial intelligence, during the stock market boom of the 1980’s, when people were making vast sums of money relatively easily and in a short space of time.

These people were trading property as if it was some sort of hot commodity, like an Ipod is today. They had basically struck upon a certain formula which allowed them to leverage the power of supply and demand and create wealth like never before. Honestly, it was like selling shovels to gold miners and being the only shovel seller in town. Hence the term financial intelligence.

Nowadays, if you want to create wealth you do need to be a little savvy in terms of being able to spot a lucrative venture. It seems the art of this revolves around finding business systems which have very low overheads and high profits. It is an age old formula, used first by the original currency inventors of the world, but it never ceases to amaze me the amount of people who miss it and cannot recognize it, even when it is staring them in the face.

The Internet is one such example, which, if you are savvy enough, offers the business person a huge opportunity to manufacture and deliver a product at virtually no cost. Therefore the markup in profits becomes immeasurable. The example which follows show why. Take this hypothetical scenario.

The hourly rate is not calculated, but a person then goes and spends three days, say from Monday to Wednesday, 16 hours each day writing, an eBook on how to strip down a BMW model 320i car engine. They then spend another day editing, packaging (sourcing and supplying graphics) and supplying references, getting copyright and disclaimers written up, and submitting their book to the various Internet book stores for sale. The book sells for $20.00 and they collect 25% commission ( $5.00) per sale. they sell 100 copies world wide in the first week, 200 copies the 2nd week and 300 copies the 3rd week. After this they stop counting. The formula is something like this.

5 days @ 16 hours each = 80 hours

production cost = nil

profit week 1 = $500.00

profit week 2 = $1000.00

profit week 3 = $1500.00

Total profit = $3000.00 – for something I have done once, and once only, even if it did take 80 hours to do

Divide by 80 hours = $37.50 per hour paid profit.

And it grows exponentially, as sales pick up. Now, past a certain point, because there was no measurable cost factor involved, they cannot accurately measure profits in terms of a percentage. This is financial intelligence at work.

It only becomes an unworkable model when we start to put ourselves on a measurable hourly rate. It is then that, as the saying goes, time is money. But this is an illusion. I say this because, how does one go about working out what volume of time equates to a specific volume of money?

Using the example of eBook production and sales above, for example, what if, 12 months from the date of the first sale, profit from that BMW book is at $25,000.00. Does the person then go and say they took 80 hours to get the book out, therefore they are now worth $25,000 divided by $80 = $312.50 per hour.

What if they have written another 10 books by then?. Each one has started to sell. How do they keep track of and figure their hourly rate?

They don’t, and can not, unless they want to get hooked into the ‘time is money ‘ illusion. The person is far better off to recognize financial intelligence when they see it, arrest the urge to measure their worth by how much money they can make per hour, and just relax and go with the flow, and enjoy doing what they do. Life is too short, for them at least, to be doing otherwise. When it comes to how to create wealth, I think financial intelligence is possibly the best resource and perspective one can have. This is what lends itself to the creation of simple and effective business systems. It is what goes into answering the never ending search to create wealth easier and faster than ever before.