Dan Lok’s Wealth Triangle: The Three Steps to Wealth

Dan Lok is a Chinese-Canadian entrepreneur and business mentor, and one of his ideas is of the Wealth Triangle. It consists of three sequential pillars for someone to follow in their journey towards financial confidence and freedom.

Here they are:

1. High-Income Skills

Learn a skill that has the potential to make you over $10,000/month or $100,000/year. Lok’s idea is if you’re going to trade your time for money, you may as well trade your time for a high amount of money. A high income skill could be in anything, and includes copywriting, sales, consulting, and social media marketing.

This was a large reason why I chose to learn sales in a commission-only compensation structure – it would give me the motivation to up-level my skills as quickly as possible, while being rewarded handsomely for any success. I’m happy to say that I reached and ticked off this pillar on the wealth triangle after two years of learning and applying sales skills.

The ideal here is to develop more than one high-income skill and bring them together to create even more confidence in your earning power.

If you’re not already practicing a high-income skill and you’re unhappy with your financial situation, this is where Lok suggests you start.

2. Scalable Business

So what happens when you’re already earning five figures a month and you’re ready to go to the next level? Lok’s next pillar is to create a scalable business. Not all businesses apply to this – Lok recommends avoiding businesses like restaurants that create lots of overhead costs or infrastructure. Scalable businesses leverage other people, systems and technology in order to create income from other people’s work. The idea of scalable business is to create cashflow in addition to your income.

In the industry I work in, I was able to start up a team of salespeople in order to leverage their skills instead of only relying on my own sales for income. This involved plenty of training, running sales meetings, and holding progress reviews. It’s definitely more of a challenge that just being responsible for yourself, but it can be more fulfilling if you bring a team along to succeed with you. The reason why it’s scalable is that the team can grow and the more experienced sales reps can become managers who recruit more reps too. The top sales managers in the industry I work earn millions per year.

However, Lok highlights that not everyone is cut out to start a scalable business. There can be risks of losing money, or carrying debt. It can be stressful. According to Lok, creating a scalable business is not essential for building wealth, and it is possible to become a multi-millionaire just from a mixture of high-income skill and the third pillar.

Lok reminds us that as we move onto building a scalable business, it’s important to skill be working on our high-income skill and generating income that way. If you’re just starting off with a scalable business, it’s unlikely that it will be immediately making more than your six-figure income, so keep utilizing your high-income skills to have the confidence of paying yourself, no matter what happens in your business. In my case, that meant going out and making my own sales while also managing other salespeople.

3. High-Return Investments

Lok defines a high-return investment as an investment that provides at least a 10 percent annual return, year in and year out. This is the best way to build your net-worth after you have at least developed your high-income skill. One example Lok gives of a high-return investment is real estate.

As good as a 10% annual return sounds, Lok recommends thinking more strategically – would this money get a better rate of return if I invested it into myself in training a high-income skill, or if I invested it in marketing for my scalable business? In my own life, I took advantage of reinvesting my money hundreds of times over into matched betting, a high-income skill I learned in 2015. At the time, I was saving for a trip to New Zealand and within six months of starting this “high-income skill”, I had earned over £15,000 for my trip, and actually started earning more through betting than I did with my regular job at the time. If I had instead put the savings I made from my low-wage job into a 10% investment vehicle, I would have come away with a tiny amount in comparison. The matched betting provided me with 500+% return, although I did have to spend time actively betting on my laptop.

Lok says that if you master the high-income skill portion of the Wealth Triangle, and invest it wisely, you can create a million dollar net worth in seven to 15 years if you’re able to keep your expenses in check.

The biggest reminder of the Wealth Triangle is that it is supposed to be used sequentially. Lots of people think about investing and starting businesses when they haven’t even harnessed any of their earning power yet. According to Lok, if you’re earning less than $10,000/month, hitting this consistently should be the main focus if your target is wealth. Trading your time for high dollars gives you a foundation that you can then move onto the second and third pillars. Sinking all your life savings into a business idea, like we see on Dragons’ Den, is a result of these entrepreneurs skipping the first stage of building up their high-income skills. When the Dragons inevitably say no, they are emotionally and financially bankrupt.

In summary: Build up a high-income skill, then work on a scalable business to create cashflow, and then invest in something with high returns to expand your net worth.

When Bad Things Happen, Stop Talking in Stories and Start Talking in Facts

One of the most addictive things in human nature are stories. We love to hear them, we love to share them, we read them in books and we watch them in films.

When I was on a personal development course a few years ago, some of the participants were sharing stories of the past that they were still hung up on. Some of them were truly terrible – abusive parents, relationships from hell, or being cheated in business partnerships.

But the idea that the course leader introduced us to was this: Stop talking in stories and start talking in facts.

Whenever someone described themselves as “abused”, or “screwed over”, or being “destroyed”, or “cheated”, the course leader would interrupt the participant. “What happened, what did you say, what did he say? That’s all I want to know. I don’t want to know your story, I want to know what happened.”

So the participant would have to reword how the incident occurred in pure facts, instead of the story that they had developed over the preceding years. And they would really struggle, because the story had been ingrained for so long. When we feel wronged, we are likely to make it sound worse when we describe it to others. Instead of saying “my ex-fiancé slept with a hooker once”, we’ll say “my ex-fiancé cheated on me, betrayed me, and destroyed our relationship.” We choose strong, emotive words that make us feel victimized, wronged, and angry.

It’s not to condone the actions of others in the past, but as the Dalai Lama says: “Forgiveness is the only way to heal ourselves and be free from the past – until then, someone else will hold the keys to our happiness, and that person will be our jailor.” Until we forgive, we will still be trapped by our past.

When we start talking about our past in facts, we’ll start to loosen our attachment to our narratives that we’ve created, and be able to focus more on our present and future. Our stories will no longer be told in dramatic, entertaining fashion – but we’ll be free.

The Strength of Your Ancestors Lies Within You

Around 300,000 years ago, the first Homo Sapiens arose from their ancestors. These creatures managed to survive and propagate their species until over 7 billion of us now populate the modern world. They survived harsh winters, predators trying to hunt them down, and battled illness with no access to modern medicine or hygiene standards. They banded together to form communities where they helped one another to thrive as much as they could. They discovered fire and invented the wheel. They explored the Earth for finer places to inhabit, and domesticated animals to aid them. Later on, humanity survived World Wars, pandemics, financial meltdowns, and started working towards civil rights and a fairer society.

All the challenges that have been faced by humanity were overcome in one way or another by your ancestors – which means that the capability for fortitude, determination, kindness, morality and heroism that was displayed in the past is coded deep into your DNA.

Whatever challenges you are facing today, remember that all the challenges that your ancestors successfully overcame has culminated in bringing you into this world. Understand that their strength is within you too – that you’re genetically built for whatever challenge you’re facing. You’ve got this.

When is Quantity Better Than Quality?

Recently, an article from this blog was mentioned in a page on The Jordan Harbinger Show website. Okay, I hadn’t heard of the Jordan Harbinger Show either, but apparently it’s a popular podcast with previous guests such as Kobe Bryant, Tony Hawk, and Simon Sinek. In his latest episode, he happened to be interviewing Adam Grant, the author of a book I had mentioned in one of my blog posts. In the show notes, my blog post on imposter syndrome was one of the suggested resources.

So what am I getting at here? Well, everyday in the last few months I have been writing and posting on things I find interesting, and created a catalogue of blog posts I can peruse through at my own leisure. I’ve written 77 posts in the last 62 days, usually taking about an hour to write each day.

Why so many posts? Firstly, it’s a good way of trying to get better at writing, and being more comfortable with producing and sharing my thoughts. But also, I knew that the more blog posts I wrote, the more chance there would be that there’s something that someone out there likes. I just pelted as much shit on the wall as possible, to see what would stick.

Now I’m not saying that quality is not desirable – of course it is. But the maxim of quality at the expense of quantity doesn’t always ring true. If I just focused on making one or two of the best possible blog posts in the last couple of months instead of producing 77 daily blog posts, I have a feeling that exactly zero of my posts would’ve been mentioned in any award-winning podcasters’ websites. It’s akin to buying 77 lottery tickets instead of one, without having to pay 77x the price.

My sister has amassed over 40k followers on her Instagram page about books from almost-daily posting and engagement with her followers. Of course, the quality of the posts are good too, but the fact that she has posted over 1200 times probably helps.

Entrepreneur Gary Vaynerchuk recently suggested that Netflix may put traditional movie theatres out of business because of the sheer quantity of movies and shows they are making. He highlights that quantity in creative fields no longer needs to be demonized in the Internet-age, and the unfortunate thing about quality is that it’s subjective. The shit that sticks with one person may not with another. What Vaynerchuk is mainly getting at though, is that you’re now more likely to find a Golden Globe-winner like The Queen’s Gambit in Netflix’s 71 movies coming out this year, than in Sony’s 13 movies scheduled for release.

In what ways can quantity trump quality in your life? I’d love to know in your comments!

Are You Ignorant of Others’ Ignorance?

Imagine someone whose beliefs oppose your own: who they will vote for in the next election, whether Brexit should have happened, whether we should have a universal basic income, whether prostitution and drugs should be legal, whether pineapple belongs on pizza etc.

We think: “Wow! What a bigoted, unpleasant, intolerant person! How could they even possibly think that they’re right!?”

But when we respond like this, we are likely to become bigoted, unpleasant, and intolerant of their bigotness, unpleasantness, and intolerance. And in turn, when we voice our strong opinions across, they could become intolerant of our intolerance to their intolerance. And the cycle gets vicious and continues on. And then we start hating each other.

So how do we break the cycle?

As difficult as it may sound, it’s to lead with compassion and seek understanding. In The Seven Habits of Highly Effective People, Stephen Covey’s fifth habit is ‘Seek to Understand, Then to Be Understood’. We see the world not as it is, but as we are – meaning that everyone sees a different picture of reality. A combination of the way that people were brought up and their environment creates a worldview that leads to different beliefs and opinions.

If we lead with curiosity instead of competition – if we begin to understand how their beliefs and opinions formed – it could make a little more sense why they would think that way, and also show the arbitrariness of their beliefs – there’s every chance that if we had the same environment as them, that we would believe most of the things they did too.

As tough as it is to accept, it’s much more conducive – as a default – to see that there’s a deeper reason that people think a certain way, instead of just labelling them as stupid, uneducated or ignorant. It would be a shame for us to be so ignorant of their ignorance.

Specialization and Evolution: Life Through the Lens of Pokémon

In the world of Pokémon, there’s a species named Ditto. It stands at a foot high, and is a pinkish blob of cells, ready to transform into any physical object or Pokémon it sees. It levels up fast, and can breed with any other Pokémon to produce eggs of the other species. But no serious Pokémon trainer wants a Ditto. When Ditto transforms into another Pokémon, it’s not as strong as the real thing, and it always transforms back to the normal-type blob of cells after a while. Ditto has so much potential but never ends up reaching it.

Serious Pokémon trainers would rather have a diverse team of different types. Ash Ketchum, the main character in the Pokémon TV series, had Pikachu, a chubby, loyal rodent that could electrocute enemies, the fully-evolved Dragonite, and the ghost-type Pokémon Gengar. Although they all had weaknesses, their specialization and strengths outweighed them.

In the discipline of biology, stem cells are the category of cells that have pure potential and can differentiate into any other type of specialized cell – a red blood cell, gut epithelial cell, or even a brain neuron. But if the stem cells never differentiate, the specialized cells cannot grow and develop and you’re just left with a Ditto-esque bundle of cells.

On more of a macro-scale, the same is true in human beings. Childhood is where we are introduced to as many new experiences as possible, and as we grow into adults our identity begins to harden and our potential decreases. In Pokémon, a Charmander evolves into a Charmeleon at level 16, and then into the fully-formed beast Charizard at level 36. Ditto never evolves. Evolving is a scary, unknown process, and once evolution occurs you can’t go back. That’s what induces the fear in us as humans, because we’re scared of making the wrong decisions in life. We’re in a generation petrified of commitment in relationships and in our careers.

But in the end, we get to choose. So what are you going to choose to be? A full-fledged, powerful and respected Charizard; or the archetypal Peter Pan-style Ditto?

“Those who do not choose a direction are lost. It is far better to become something than to remain anything but become nothing.”

Jordan Peterson, Beyond Order

Seek Discomfort

We all know how uncomfortable it is when you jump into a shower only to be shocked that the water is freezing cold. Or in school when the teacher announces that it’s your turn to do a speech in front of your class. Or when the doctor tells you that you have to stop eating so much junk because it’s destroying your health.

So how can we avoid the pain and struggle that these things bring? By choosing the pain and the struggle. Choose to finish your shower with a cold blast, volunteer to speak about something you’re passionate about to your class or your family, and eat healthy foods even though junk food is available to you everywhere.

Josh Waitzkin, the author of The Art of Learning, has taught his son Jack that rainy days are beautiful, and they play together outside whenever there’s a storm. I did the same thing with a friend recently – the forecast for our walk was looking grim, but we chose to do it anyway, and although we came back wet and muddy, it was fun. “It’s not as bad when you go out in the rain voluntarily,” my friend remarked.

Choosing to go against your nature for comfort allows you to prepare your body and mind for the times when you may have to deal with challenges and stresses. I remember a few years ago during a Spartan race where I thought I was going to die because I was walking down a freezing cold river and it felt so painful. Only a few years later and after doing cold shower finishes almost every day, I was relatively unperturbed when swimming in a cold-water swimming hole in Nova Scotia, or taking a quick December dip in the Lake District with friends. The cold stress was so much easier to bear because my mind and body were ready, and sufficiently trained for it.

When Is It Okay to Break the Rules?

The purpose of having rules is to keep order in the entropic nature of a world always threatening to revert to chaos. Rules are generally written in a spirit of benevolence, and they usually represent a given set of virtues in order to aim for a higher good.

But there can come a point where the rules themselves end up undermining the very spirit and virtue the rule was made to exemplify in the first place. The rules of football were made in the spirit of fair play, but now it can be argued that the referees’ implementation of the rules is so pedantic and rigid that the ethos of the game is being lost.

Rule-breakers have also stood up against repressive laws in the name of morality. Rosa Parks inspired the civil rights movement in the US when she refused to give up her seat to a white man on a crowded bus in Montgomery, Alabama in 1955. She was tired of giving in to the demands of a system that was so demonstrably unfair, that she resorted to disobedience.

Jordan Peterson, in his book Beyond Order, recommends to follow the rules first and understand the spirit in which the rule was originally made. It is only then that we can ethically break the rule – by managing to combine the necessity to conform to the rules humbly as others do, but to use judgement and a guiding conscience to do what is right, even when the rules suggest otherwise.

Here’s a rule: Follow the rules, but shoulder the responsibility to make an exception to serve a higher good.

Outsourcing Our Sanity: The Hidden Role of Social Groups

Here’s an alternative way to see the value in having social groups:

We feel a responsibility to live by our values and behave properly in front of our friends, because they’ll call us out if we start acting selfishly or out of alignment with how they expect us to behave.

By being in contact and in the presence of our friends, we are effectively outsourcing the problem of our sanity. In essence, it isn’t that we are relying purely on ourselves to remain mentally healthy, we are actually unknowingly being reminded how to think, act and speak by those around us.

We can use this force to help us to become the best people we can possibly become, and as a result be a good influence on our own friends in return.

Contrast this with not having a solid social structure in your life. It’s much easier to come off the rails if no-one is there to see it happen. With good habits slowly unravelling and bad habits overgrowing like weeds, we begin to slip in life. Waking up early with a solid work and exercise routine metamorphoses into waking up on the couch at 3 A.M. covered in Cheetos dust with Netflix asking whether we’re still there. And because nobody can see that, there’s nobody to help pull us up, to keep us accountable.

If you’re a person lacking that social structure, make it an aim to start connecting it together again – despite the crippling anxiety it can so often induce. If you’re worried that one of your friends or family lacks a reliable social structure, take the responsibility to check in on them to see how they’re doing and what they’ve been up to. It might just help more than you know.