The Inverse Law of Income

What exactly is the inverse law of income?

The inverse law of income states that the greater the potential for long term income the less the potential for immediate income at the beginning.  What that means is this -- if your business or job has the potential for great amounts of income in the long term then it is likely you will barely make anything at all in the short term.   The reason for this is simple.  When you have the potential to make large amounts of money in some enterprise then you are capitalizing on some unrecognized need.  Therefore it is something for which people are currently not paying for at the present.   Thus you will need to establish your audience since nobody has already done it for you. 

The one fundamental law in both life and money is that they both reward risk.  When you take a risk and you make it then you always end up much better off than if you had taken the safe route. 

This concept doesn't just apply to the financial world.  It also applies to artistic pursuits.  Most artists really struggle but when they do finally make it and find their "public" they are usually well rewarded.  Once again, this is the "Inverse Law of Income" at work.  

Thus, we can see that it is important to be aware of the fact that the prospects with the largest payoff will often appear to have no prospects at all.   Sometimes this is in fact the case.  The times when such a risk does payoff are far and few between.

The key concept is to pay attention to things that might appear difficult and not to shy away from something for that reason alone.  Often it is the difficult path that is the most rewarding.  This is illustrated in a student deciding to attend Medical School or an artist deciding to devote him or herself entirely to art or even to an actor moving to Los Angeles with only a hope and a dream.   Though the path is difficult for all of these endeavors the rewards are great for those who see it through to the end. 



Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.