Spending time on the right levels can have a huge impact on your lifetime net worth

TLDR Summary

Understanding and leveraging the concept of "levels" in goal-setting and execution can significantly improve your chances of achieving your goals, whether in business or personal life. By focusing not only on daily actions but also on higher-level planning (goals, strategies, and tactics), you can ensure that your efforts are aligned and impactful.

Why Levels Are Important

Higher Levels Provide Greater Impact

Many of us spend most of our time on daily actions, while weeks, months, and years fly by. To achieve extraordinary results, focus more on higher levels (goals, strategies, tactics) as they offer greater leverage and impact on reaching your goals. To explain why, I’ll give you some examples. This is what the levels look like for most people. They spend all of their time on the actions level.

Example 1: Levels for Most People

• Goals: Get rich
• Actions: Every day I work really hard on my job. If I do well, I’ll get a promotion.

And so, most people will never be able to achieve their goals.

Example 2: Levels for an Employee

• Goals: Get rich, have a net worth of $10M.
• Strategy: Get a leadership role at a big company with a big salary.
• Tactics: Work hard and get promoted.
• Actions: Every day I work really hard on my job. If I do well, I’ll get a promotion.

However, Bryan has several things working against him that mean that he’ll never reach his goal.

1. For each level he rises in the corporate hierarchy there are fewer positions, so the chances of getting promoted are lower for each level. E.g. 10,000 employees, 5,000 middle managers, 1,000 managers, 100 high-level managers, 10 executives, 1 CEO.
2. If he stays, Bryan will end up having a typical career, increasing his salary by 2.5% per year. Assuming he’s able to save 5% of what he makes in a year, plus regular inflation and return on investment on his savings, his wealth will peak out at $1.45M when he retires 35 years later.

At least Bryan has a strategy, even if it’s not the optimal one. It’s a solid result and a lot of money for most people. But he’s way off his goal. His tactic was limited to remain with the same employer. Let’s instead say he spent more of his time on a different tactic: looking for new jobs to raise his salary and position.

• Goals: Get rich, have a net worth of $10M.
• Strategy: Get a leadership role at a big company with a big salary.
• Tactics: Work hard, but change jobs every couple of years to raise salary and position.
• Actions: Every day I work really hard on my job. If I do well, I’ll get a promotion.

He gets a new job with a 85k usd salary, keeps doing it every couple of years so that his average salary increase is 3% per year. Now his net worth is $3.2M at retirement. The point here is that he doubled his output, by spending a bit more time on a higher level.

However, Bryan has done these calculations himself and has decided that he does not want to slave away in corporate life only to have money when he’s retired. So he quits his job to become a solo entrepreneur.

Example 3: Levels for an Entrepreneur

• Goal: Get rich, have a net worth of $10M.
• Strategy: Own 100% of a marketing agency and grow it until he can sell it and retire.
• Tactic: Cold calling.
• Actions: Cold calling business owners + creating marketing content for them.

Bryan quickly onboards a couple of clients and within the first year he manages to reach his old salary. However, now he spends all of his time catering to the customers he has. And he no longer has time to find new clients. And so he’s stuck here for two more years before he realizes that something must change. He’s fallen into a typical founder trap. Trying to do everything himself. How well Bryan ends up doing with this business, depends on whether he manages to transition to spend more time on the higher levels.

Personal Experience

For the three years of running one of my businesses, my co-founders and I did the customer support ourselves on rotation. In the early days, this is great for learning. But in order to grow the business, you need to hire people to take over operations, which take place at the action level. This way, you can focus on the higher levels such as setting the goals, strategy, and tactics in order to move the business forward.

Key Takeaways

1. Prioritize Higher Levels: Spend more time on goals, strategies, and tactics for greater impact.
2. Clear Goals: Essential for effective planning and execution.
3. Strategic Time Management: Allocate time to high-leverage activities.
4. Iterative Refinement: Continuously improve your approach based on results.
5. Regular Assessment: Ensure you are on track and adjust as needed.

By understanding and applying the concept of levels, you can enhance your ability to achieve significant results in both your personal and professional life.