The Magic Model That Produces Wealth

June 7, 2025

I bet you’ve heard about the chocolate and the carrot. You need the carrot, but the carrot is not at all appealing. You want the chocolate because, well, it’s chocolate isn’t it. And chocolate makes the world a better place. So someone wants you to have something you need but don’t want so they first offer something you want but don’t need. They entice you to eat the carrot by covering it in rich creamy chocolate that melts in your mouth. Can you tell I had chocolate ice cream today?

The Easy Button

In the title “The Magic Model That Produces Wealth”, the magic model is the chocolate. Because everyone wants a “magic” wealth producing business model. They want the easy button. If I had lead with a title like “You Need Recurring Revenue To Create Wealth” your boring meter might have been sending you on your way right past this edition of the newsletter.

But that second title is the carrot. It includes things like real estate investments (the best carrot in my opinion), monthly subscription models, maintenance agreements, coaching packages and service contracts to name a few. These are not necessarily easy but they can produce an amazing recurring revenue stream that builds wealth, beefs up your business operations, and gives you a sense of safety and confidence in your business.

The Benefit

One of the most valuable benefits of recurring revenue is options. Knowing that money is coming into your account every month gives you all kinds of options. For example, the option to invest that money and get even more recurring monthly revenue. Buy more real estate, invest in expanding your business, buy equipment that will earn more revenue. Recurring revenue is like a flywheel that keeps gaining momentum as you feed it with more cash flowing investments.

One off sales of single items, or single services without recurring monthly revenue leaves you relying on referrals and more sales. Those types of sales leave you constantly having to find new customers in increasing numbers for your business to grow. It’s the hamster wheel effect.

Think about all the ways you can generate some recurring revenue. Even if you do not own a business you can still add recurring revenue to your life.

1. Do you sell a product or service that your customers buy periodically? (car wash, AC service, computer maintenance, and maintenance on just about anything). You can turn any periodic recurring purchase into a service contract, or a subscription model that will generate a reliable monthly recurring income.

2. Many one time purchase items can be converted into a subscription model. A popular example of that is software. Software as a Service (SaaS) has become a huge industry because of convenience for the buyer/user and the reliable monthly income for the provider. It’s easier to pay a smaller monthly fee than to pay a single large price up front. In this case the carrot is the expensive software you need and the chocolate is the low monthly payment.

3. Don’t own a business? You can buy something that businesses need to operate and lease it to them. It could be real estate (businesses need a place to operate from and the owners also need a place to live), billboards, vehicles, equipment, even airplanes.

The point is find something you can provide that customers will pay for on a monthly basis. Once you start looking you will probably find at least one, even if you think you don’t have “that kind of business”. It's worth taking a look. Wouldn't you like to be able to breathe easier?

Special thanks to all our new and continuing subscribers! I hope the articles give you good ideas for your business and your life. Enjoy!

That's it for this time. See you next week!

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