Pasos de acción

earn exponential Income

And other seeds fell into good soil and brought forth grain, growing up and increasing and yielding thirtyfold and sixtyfold and a hundredfold.

— Mark 4:8

Henry Hungry is applying for a job.

He walks into this nice office and meets a well-dressed fellow behind the desk. Henry smiles and asks him, “Sir, is there a job here for me?”

The man says, “I’m actually looking for a general manager. You need to sign a contract for three years. Interested?”

“Hmm. Sorry for being upfront, but how much will I earn?” Henry Hungry asks.

The man says, “I’ll let you choose your salary. Do you want P30,000 a month or one centavo doubled every month?”

Henry Hungry is mildly shocked by this unorthodox offer. “Run that by me again please,” he says, getting his cell phone to calculate.

The man chuckles. “Option #1 is I pay you P30,000 a month for 36 months. Option #2 is I pay you one centavo on the first month and I double it every month for 36 months.”

Henry starts calculating. “Option #2 is interesting. If I choose that, I earn one centavo on the first month, two centavos on the second month, four centavos on the third month, eight centavos on the fourth month, 16 centavos on the fifth month, 32 centavos on the sixth month… after 12 months of working with you, I would have received a total of… sheesh, P23! Sir, I need the money badly. I choose Option #1 where I earn P30,000 flat each month. By the first year, I’d already have earned P360,000. And after three years, that would total to P1 million. I definitely choose Option #1.”

“Okay, if that’s what you want.” Then the man asks, “By the way, if you chose Option #2, do you know how much you’ll earn by the end of three years?”

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The man calculates in front of Henry Hungry. “On the first month, you receive one centavo, on the second month, you receive two centavos.…” He goes on and on, and Henry doesn’t mind him too much. He’s too focused on the P1 million he’ll be earning in three years. He feels pretty good about himself.

Finally, the man looks up and shows Henry Hungry the calculator. “In 36 month, you would have earned P680 Million. You exchanged that for one million. I’m sorry, my friend, I can’t take you as my general manager. Your decision-making skills are terrible.”

Let me give you the figures…

Months option # option #

1 P30,000 1 centavo 2 P30,000 2 centavos 3 P30,000 4 centavos 4 P30,000 8 centavos 5 P30,000 16 centavos 6 P30,000 32 centavos 7 P30,000 64 centavos 8 P30,000 P1.28 9 P30,000 P2.56 10 P30,000 P5.12 11 P30,000 P10.24 12 P30,000 P20.48 13 P30,000 P40.96 14 P30,000 P81.92 15 P30,000 P163.84 16 P30,000 P327.68 17 P30,000 P655.36 18 P30,000 P1,310.72 19 P30,000 P2,621.44 20 P30,000 P5,242.88 21 P30,000 P10,485.76 22 P30,000 P20,971.52 23 P30,000 P41,943.04 24 P30,000 P83,886.08 25 P30,000 P167,772.16 26 P30,000 P335,544.32 27 P30,000 P671,088.64 28 P30,000 P1,342,177.28 29 P30,000 P2,684,354.56 30 P30,000 P5,368,709.12 31 P30,000 P10,737,418.24 32 P30,000 P21,474,836.48 33 P30,000 P42,949,672.96 34 P30,000 P85,899,345.92 35 P30,000 P171,798, 691.84 36 P30,000 P343,597,383.68

Total P million+ P80 million+

Obviously, I’m using this as an analogy.

There are only two types of income in this world: Linear and

Exponential.

In my fictional story above, Option #1 is Linear and Option #2 is

Exponential.

Linear income is like a piece of bread. You eat it and it’s gone. After that, you have to look for another piece of bread.

Exponential income is like a seed. You can’t eat it at first, but if you plant it and wait for a while, you can eat as much fruit as you want to. You have an infinite source of fruit if you keep on planting some of the seeds.

Many Filipinos today have only one income stream—their jobs— and jobs are linear income.

Some Filipinos are self-employed and run small businesses. Sadly, like Maria in my example in the last chapter, these businesses are linear income, too. (For example, doctors and dentists may have their own clinics, but they still earn linear income. unless they work, they don’t earn. They’ve not been able to create passive income.)

What is exponential income?

That’s what a regular employee earns when he invests in mutual funds and stocks. (So you see, everyone can earn exponential income, even employees.)

That’s what a networker earns when she builds a downline organization.

That’s what an infropreneur earns when he sells an e-book or when he earns from Google ads from his website.

That’s what a sales manager earns from his salesmen.

That’s what a distributor earns when he distributes his goods to various stores.

That’s what a store owner earns when she branches out, hires other store managers, or sells franchises of her store.

That’s what a real estate investor earns when she buys profitable rental property.

That’s what an author earns when she earns a royalty for every book that’s sold.

That’s what a singer earns when she earns a royalty for every album sold.

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That’s what an inventor earns when he invents a widget and enters into a deal with a company to sell it.

That’s what a dentist earns when he hires other dentists and opens new clinics.

Exponential income—also called passive income—means earning for a very long time from work you did only once at the very start.

Hey, income is income. Earn linear income when you can!

But invest your linear income so you can earn exponential income. Because if you want to become wealthy, you need to find a way to earn exponential income.

Earn exponential income. Truly Rich Principle:

Invest your linear income so you can earn exponential income.