How to Work at Home With the Asset Building Approach

by WorkFromHome on October 10, 2011

There is a fundamental difference between two specific types of work. One type of work looks to make money by personally performing a service or selling a product to others. A second type of work looks to build entities that make money without personal intervention. These entities are known as assets, and you can tell that something is an asset if it takes in more money than is used to maintain it. Assets allow you to be paid without a certain proportion of work being done. If you want to be successful in the work from home environment, then you’re going to have to build and develop assets over time. In what follows, we’re going to show you some different ways that you can create and manage assets.

A Basic Website Example

Suppose that you have a niche website that drives users with search engine optimization. For the sake of discussion, let’s say that it costs an average of $15 per month for the hosting and domain registration and that it makes an average of $3 per day from advertising. This website is an asset because it makes more money than is used to maintain it. Even if there was a cost of $500 to build the website, within a year you would still have a profit of a few hundred dollars. Moreover, in the second year, the website would continue to make money. In this basic example of an asset that was developed by someone working at home, we can clearly see the concept of how some initial work can pay off over the long run.

The Two Types of Work in Action

What if the person who owned the website above sold it immediately after creating it for $800? He or she would have made $300 right away while passing up on the opportunity to make more money in the long run. Seeing this trade off between the short run and the long run is the key to understanding why building assets is so important if you work from home. When you work in a way that you’re directly selling your products and services, you’re stuck in the short term because you won’t be paid repeatedly for your efforts. However, if you focus all of your time and attention on building assets, you won’t have enough money in the short term to pay your bills and survive. If you want to be a true success story of someone working from home, then you’ve got to find a balance between the two types of work.

The Self-Perpetuated Growth of Assets

It will take some initial sacrifice to get an asset started. Whether this sacrifice is in terms of dollars or hours of work is up to you. Once your asset is up and running and making a small profit for itself, then it’s up to you to manage its growth. A great way to promote the growth of an asset is to reinvest its profits. Using the website example discussed earlier, you could take most of the profits from the website and use it to have more content written for the purposes of expansion. This expansion will lead to an increased earning rate, which means you can invest back in the asset at a faster rate. Reinvesting like this in an asset has a sort of snowball effect where the asset has self-perpetuated growth. The ultimate job working at home in terms of income would be just managing the growth of your own assets all of the time.

Physical Work and Building Assets

If you work from home by providing a physical service, you can still build assets and look to your future, but it has to be done slightly differently than our website example. Instead, you should look to hire employees or to otherwise outsource some of your work. This is a basic example of brokering services. Once you have employees or a hiring process that you can rely on, your business itself becomes an asset. If you by yourself can get 40 hours of your service finished each week and take 100 percent of the profit, then you can make twice the amount of money by having three employees do 120 hours of work each and take only two-thirds of the profit. No matter what your industry or business model consists of, taking the approach of building assets will bring you success when working at home.

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