Phone bill about two G’s flat
📪 The Optimal Agent Newsletter #034
“Super Nintendo, Sega Genesis
When I was dead broke, man, I couldn't picture this
50-inch screen, money-green leather sofa
Got two rides, a limousine with a chauffeur
Phone bill about two G's flat
No need to worry, my accountant handles that.”
— Christopher Wallace (aka Notorious B.I.G.)
Take Action:
Identify your current stage of income generation and develop a plan to move higher.
(Biggie’s career was a Stage 2 + 3 combo….)
Why It Matters:
There are four stages of income generation, each granting more Agency than the last. By understanding what they are, where you stand, and where you’d like to be, you can formulate a plan for progress.
Ask Yourself:
Which stages do you occupy? What actions can you take to advance to higher stages?
Stage 1: Income for time. Non-scalable. This is where most people begin (and end). You are paid per hour, per week, and so on - your income explicitly tied to units of time. You can generate wealth this way, but it’s likely to take decades of effort.
Stage 2: Income for personal output. Semi-scalable. Now you’re being paid for what you accomplish. Sales made, records sold, touchdowns scored. This stage can generate considerable wealth if your pay package is well-negotiated or you’re self-employed — benefitting from uncapped (rather than capped) upside.
Stage 3: Income for others’ output. Fully scalable. Now we enter the land of theoretically infinite income — you’re being paid for the total output of a system, limited only by your ability to build a better system. This path to wealth rarely happens in a traditional employee position; you’ll need to own the business.
Stage 4: Income from assets. Now you’re making money with money, receiving income in the form of rents, dividends, interest, and capital gains — little to no work required. Once this income equals your expenses, work is elective (and you’re free to become a rap superstar).
Explore More:
Listen: O.A. Podcast Episode #34, where Patrick and I discuss the speedy route to Agency — and the need to make a few (very hard) choices if you’d like to go quickly.
Read: Building Scalable Business Models from MIT Sloan Management Review (free account required)
Watch: What is Systems Thinking? from MIT xPRO
