Frameworks - The Ladders of Wealth Creation

Read time: 4 minutes

Welcome to The Ascend Archives Friday Edition where I share insights from the brightest minds in business and life and how I'm applying them to my life.

For the past two days, I’ve been at the Austin Entrepreneurial Summit. A guy worth $300M spoke about living intentionally, a 29 year-old explained how he built a 7-figure business in 4 years, and a gal with 5M+ followers across social media encouraged us to rethink our business strategy by using our skill set to ask for equity in businesses vs just making a sale.

All of their presentations had one common thread: frameworks.

Each one of them took different areas and problems in their life and created a model around how to solve them. Whether it’s building a business, investing money, working on a relationship with a spouse, or improving their health, the most successful people design and follow a framework based on how they see the world.

It made me question, what are my frameworks and where are my frameworks leading me.

Up until now, I’ve been following other people’s frameworks. The one that taught me how to get into a great college, how to land a 6-figure consulting job, and even how to quit my job. And there’s nothing wrong with following other people’s frameworks. Why play life on hard mode and recreate the wheel when so many successful and smart people have already walked the path? In a room full of 250 people with dozens of multi-millionaires, one of my mentors (organizer of the event) Matt King proudly stated that he believed he was the best person in the room at R&D: Ripping off & Duplicating. 

Most of the frameworks I heard over the past few days haven’t been anything life altering that will win a Nobel prize. It’s doing some R&D from others but then adding their own twist or applying the concepts to a new industry or area of life. It’s framing it up so that the concepts make sense to them and maybe they will resonate with others.

I’m excited to start crafting my own frameworks, testing them and sharing them with others for feedback. But for today I’d like to share a quick framework on the Ladders of Wealth Creation from Nathan Barry that resonated with me.

Nathan is the founder of ConvertKit, a platform that helps creators monetize their brands mainly through email marketing.

The Ladders of Wealth Creation

1. Time for Money

This is how most people earn a living. They are either working an hourly or salaried job. Their skill set consists of showing up, performing a set of tasks, and maintaining a baseline quality of work.

As the person improves their skills or becomes specialized, they have the potential to earn more and more. Some people stay on this ladder for their entire careers, working their way up to become an executive at a company. Depending on the skill set and industry, the earning potential and job security can be very high.

However, people trading time for money will always have to report to someone else.

2. Your Own Service Business

Some folks decide they don’t want to report to anyone else.

They want to start their own business. On this ladder, they start to learn skills like:

• Setting up a company

• Drafting proposals

• Crafting an offer

• Hiring and managing employees

• Dealing with accounting and finances

It requires gaining a lot of new skills, but also maintaining the old ones. You need to still be reliable and proficient to deliver on everything you set out to do.

3. Productized Services

The next ladder is learning how to sell without ever talking to the customer. Previously you are taking each customer out for coffee or hopping on a video call to convince them to buy your services.

You can only talk to so many people in one week.

The way to scale is by removing the sales bottleneck. You can do that by creating a set offering. Instead of selling website design for $100 per hour, a web designer can charge $2,000 for designing a 5-page website. This offer can be sold directly from a sales page. Depending how fast they can complete the 5-page website, their “hourly rate” could go up or down.

There is a lot more potential to create teams and systems to improve the quality and increase the output of your services.

4. Selling Products

The final ladder removes not only the manual work from the selling process but also from delivering the product.

A product takes a lot of work upfront to create, but then the fulfillment side requires much less effort than delivering a service. If I continue this path of writing, instead of writing newsletters and social media posts for clients, I can write a book or create a course teaching people how to launch and scale their own newsletter. The 3-6 months of effort up front could lead to a recurring income source for years.

Many entrepreneurs seek this ladder because it frees up their time. The sales machine is automated and making them money in the background while they move on to their next project.

Curious about moving up the ladder?

Here are some great questions from Nathan to ask yourself if you’re thinking about moving up the wealth creation ladder:

• What rung am I on in my journey to build wealth?

• Which ladder is this new idea on?

• How far is it from the rung and ladder I am on currently?

• What new skills would I need to close the gap between where I am now and where I want to go?

• How long will it take to acquire those skills and get initial traction?

• Do I have the runway (both in time and financial security) to make that jump without putting my finances in danger?

If you want to learn more, check out the full essay here.

Thank you for reading! As always please reply and let me know what resonated, what didn’t, or what you question. I love chatting about this stuff!

Cheers,

Andrew