Equity Versus Income In Your Home Business

Here’s a great insight from Michael Masterson in the EarlyToRise.com ezine #1584

Though the specific case is a copywriter… this applies to anyone with a day job.

Your home business is the “equity” business Masterson speaks of. It’s the business that keeps on chugging even if you’re out hunting for sea shells on the beach. It’s the website that keeps getting adsense clicks even if you’re hiking in the woods. It’s the McDonald’s franchise that employs $7 per hour teenagers whose work empowers the $2 million dollar franchise while the franchise owner is playing golf.

Now bear in mind that these examples of an equity business that let’s the proprietor play while others work don’t mean the owner never works. They just mean that the owner has more control over their leisure and ability to delegate work.

Equity is in the “Business” end of the Rich Dad scheme if that helps.

Your “day job” is the equivalent of the copywriting… it’s income today, but if you ever stop punching the clock, it’s over.

Income is in the “employee” or “self-employed person” part of Rich Dad’s schem of things.

Dear Michael Masterson: “Should I aggressively pursue more copywriting gigs while I get my ‘equity’ business up and running?”

“I’m currently devouring Automatic Wealth . I can’t read it fast enough. I’ve worked before, had a business before, and am starting another Internet-based business right now.

“Various copywriting jobs have come my way (without any self-promotional efforts on my part) and I’m wondering whether I should aggressively pursue more copywriting gigs now, while I get my Net business – my ‘equity’ business – up and running. On the other hand, I’m concerned that if I pursue more copywriting work, I won’t be able to put as much time into my Net business and it won’t grow as quickly.

“Advice please!”

Anna J.
Sydney, Australia

Dear Anna,

Your worry is well founded. Accepting more copywriting work now will increase your income, but it will also make it harder for you to put your equity business in place.

I can’t tell you exactly what to do, but the following observations should point you in the right direction:

You can do a lot by scheduling. Allocate 40 hours a week to copywriting and 20 to your equity business. If you manage your time according to the ETR scheduling system, you should be able to accomplish this.

You will probably find that the business-building work will be more challenging because it’s new to you. If so, schedule it at the beginning of the day, when you are fresh and able to focus. Twenty hours a week is four hours per weekday, or less than three if you work seven days. Start your workday at 7 a.m. By 10 or 11, you can take a half-hour exercise break and then get to your copywriting.

If you are offered more copywriting jobs than you can handle in 40 hours, don’t accept them. Keep your copywriting workweek to 40. But do start increasing the amount you charge per job. That way, you will weed out your weaker (poorer paying) clients and, at the same time, increase your cash flow.

You can’t accomplish a major goal like starting a business unless you break it down into manageable pieces and accomplish them one at a time. So break down that goal into monthly, weekly, and daily tasks and put them on your schedule.

Our challenge is to sustain income while building equity.