For some reason over the past few weeks, this concept has popped up in my life in strange ways. After speaking with the $500 Millionaire, he has been able to shine some light on why it is such a big mistake for people to be interested in the top line, instead of the bottom line. In other words, people are focusing on Results without taking into consideration the effort it was needed to get the end result. There is no such thing as a free lunch and costs/risk is something that can drastically change the value of a result. You need to be careful not to make this common mistake.
The $500 Millionaire was giving a speech to about 50 people in a small room discussing how to turn a hobby into a business. It was amazing that the one thing these participants had trouble understanding is when you are evaluating a business, the top line (Revenue) means very little but the bottom line (Profit) means everything.
For those of you who are not in business, the top line is the number you will hear about most company’s performance. This is their total revenue, meaning how much money they bring in. This number can be extremely deceiving because this number does not take into account how much it costs to generate that amount. The bottom line is the profit of the company. This is the number that shows how much the company actually earned after costs. Take the following two companies as examples. You pick which company you would rather own. One that generates $1,000,000 and profits $100,000 or a company that generates $500,000 but profits $200,000.
So how does this work in life? Well, it is just like we said before, the bottom line is all that matters. The Results are all that matter but in order for the results to mean anything, you will need to know what the cost was to get those results. What Sacrifices (costs) are you willing to make to get that result.
When you look at a venture or a challenge you are looking to take part of, remember that you need to analysis it as if you were investing in a business. If you see that top line looks great you need to take a second to focus the bottom line. So your end all goal might be to make $1M but there are some sacrifices you have to make, for some, the $1M is worth those sacrifices For others it is not. The top line $1M is still the same in both cases but the true cost might be different and would make the profit of achieving that goal more or less attractive to some people.
The $500 Millionaire never feels the “Grass is Greener” until he does his research, You might see someone who has reached great wealth but what was the cost to achieve that level of wealth? Did he ruin a relationship? Did he work 100 hours a week to get there? You might see someone who has achieved something that you think you want but you have no idea if you are willing to do what it takes to get there. Are the costs it takes to achieve that goal worth it to you?
The $500 Millionaire has been blessed with the ability and willingness to pay ANY costs that doesn’t cross his morals to achieve a goal he feels is worth it. Some costs are higher than others but over all, he just finds a way to pay the costs. Once you find out what the costs are to achieve what you want (which sometimes you do not know until you start doing it) you need to make a personal decision if you are willing to do what it takes. This is the reason why the “grass is always greener” when you just focus on the top line. It is easy to see the results but you must also look for the costs.You need to focus on Profit.
Just so the message is clear, the $500 Millionaire is trying to share here. There are costs to everything and like you have heard before, there is no free lunch. When evaluating what you want to do, you need to know the costs before you get involved. The difference between successful people and unsuccessful people is how they react to the costs. Successful people are willing to pay any price for their dream. They usually evaluate it and then shrug their shoulders and say, “lets get started.” Success does not come easy, there are some large costs to achieve success but if you are strong enough and willing to do what is necessary, you will eventually reach the positive profit, which is the true result and unlike a business, usually the more a goal cost you, the better your feel about your end result.