It’s pretty much an easy way to see WHY a person (or organization) has a certain amount of wealth.

Simply look at a person or organization and ask: Who do they serve?

Look at what they do for other people and how many people they serve. Almost immediately it becomes apparent.

It breaks down like this:
Serve few + not valuable work = Little money
Serve few + valuable work = Good money
Serve few + very valuable work = Lots of money

Serve lots + not valuable work = Little money
Serve lots + valuable work = Good money
Serve lots + very valuable work = Lots of money

If you’re a numbers person you can make into a simple mathematic function:
People Served = a
Value of Service = b
Success = c

a X b = c

If you want ‘c‘ to be higher, you just have to increase ‘a‘ or ‘b‘ (or both).

Perhaps it’s easiest to demonstrate with real life examples:

The guy making your burger at McDonald’s:
Makes little money.
He performs a job almost any person can quickly learn. If he cannot show up, someone can easily replace him. Serves one organization and doesn’t serve much.

Cardiac Surgeon:
Makes good money.
Goes through over a decade of grueling medical training to be prepared for any circumstance that arises in their specialty. They serve relatively few people in the grand scheme of things, but they serve those individuals A LOT (he can either save you or kill you). Can he be replaced? Yes. However there are relatively few cardiac surgeons in the general population, so it’s very difficult. This means if someone is particularly “good” amongst their peers they could make quite sizable sums of money for their premium service. Serves few but serves them a lot.

Elton John:
Makes lots of money.
Provides a small amount of service (entertaining them is still serving them) to a large amount of people. Has a unique style, voice and persona that’s nearly impossible to duplicate. Serves a little but serves a lot of people.

Google:
Makes lots of money.
Here’s a fun one. Google serves A LOT of people (billions) and provides them a lot of service. Almost everything they offer is free, and it’s almost always a few grades better than competing services that charge money. They provide lots of service to lots of people. It’s no wonder they will make lots of money.

• So who do you serve?
• How much value are you providing them?

I bet your answers will clearly reflect your income. For fun, take a look at everyone around you and calculate their incomes using this method. Pretty cool huh?

Since you know this, you can now improve your own outcome (c) by improving one or both of those areas.

a X b = c

I found this out long time ago in college when every holiday season my Spending Account (explanation of accounts here) would get stretched very thin.

Solution: Spending Account #2

In addition to my other accounts, I created another spending account for myself which would cover only gifts, vacations and general holiday spending. I initially used to just put $20/week (aka $100/month) in this account through automatic transfer. That means during the holidays I had an additional $1,000+ to spend on gifts and going out for the holidays. That extra cash is mighty helpful during these months when spending goes through the roof.

Now I put about 10% of all my income in this account. It pays for vacations and everything without having to worry where I’ll pull that money from.

If I randomly see a great gift at the mall or someone, I can usually buy it without much price consideration thanks to the previous 10 months of savings in the Spending Account #2. Same with hopping on a plane for vacation…the Spending Account #2 takes care of it.

If this season you’re struggling to find where all that extra spending money is going to come from, I’d HIGHLY suggest creating a Spending Account #2 for yourself to make the next holiday season much less monetarily stressful and more enjoyable.