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Rental Systems
A
rental system
is a form of a product system where the product is not
bought but rented. The legacy occurs because both the product and its use
through duration create income. Notably, the expiration of time becomes your
ally. Some examples:
Rental real estate (residential, commercial, Airbnb property)
Rental services (cars, party tents, heavy equipment, bounce houses)
Parking garages
Licensing (rental of intellectual or brand property)
Human-Resource Systems
A
human-resource system
is a product (or service) system that requires
people, or employees, for operation. It could be many people, as in the case of a
restaurateur, or just you, as in a consultant. Delivering the product to the
customer is contingent on someone’s time. For example, if you design websites,
your product can’t be created without someone’s time investment, either yours
or your employee’s.
Human-resource systems usually subordinate another system. For example,
if you're considering a restaurant concept, it's technically a product system, but
in practice, it's requires human resources to succeed. Since human-resources
systems entail multiple tiers of execution beyond just the product, they are the
most difficult to execute. Some examples are:
Restaurants (either chains or franchises)
Service businesses (consulting, accounting, copywriting, web development,
SEO)
Retail brick-and-mortar storefronts (fashion boutique, bookstore, hardware
store)
Just to give you an idea how these systems work in an
UNSCRIPTED
life,
here is a complete list of the legacy systems currently working for me:
Digital Product Systems: eBooks, MP3 audiobooks (product sales)
Software Systems: forum (advertising/sponsor revenue, monthly
membership revenue)
Product Systems: physical books, audiobooks (product sales)
Rental Systems: foreign-rights licenses (royalties on international
translations)
Rental Systems: rental real estate (monthly rent)
Money Systems: interest, dividends (monthly/quarterly payments)
All of these legacy systems work for me like little worker bees who never stop
buzzing.
Unfortunately, in the
SCRIPTED
realm and in business, we’re taught to
operate under a zero-legacy mindset. Work directly correlates with income. If
you don’t work—fix the faucet, open the store, or finish the project—you don’t
make money. When you take the vacation, so does your income. Such businesses
aren’t different from a job. Instead of employer ownership, your business owns
you. In fact, many employed, corporate sales reps who sell products with a
residual component are more disconnected from time than many business
owners. The consumption of time is indifferent to whomever eats it—sixty hours
spent at a job or a business are still sixty hours gone. If income disappears
because you disappear, you’re in a bad marriage.
LEGACY STRUCTURES: HOW TO SELL WITHOUT SELLING
Another component of legacy value creation is
legacy structures
.
Legacy
structures are other perpetual systems that support, promote, or market your LVS,
also 24/7 and separate from your time.
For example, as I write this paragraph, I have hundreds of legacy structures
working for me infinitely in time. Floating around the Internet are dozens of
podcast interviews that I’ve done, each
unlinked
from my time, and each sells
books.
Back in 2011, I did a Smart Passive Income Podcast with the well-known
Internet marketer and blogger Pat Flynn. The interview consumed about forty-
five minutes of my time, and yet, more than six years later, people still message
me, saying they bought my book because of that interview. That’s legacy—not
just with value creation but with your ability to reach people on a continual basis.
Another example of legacy structure is my forum and the hundreds of posts
I’ve made over the years. These are continually readable in space-time like a neon
light that never goes dark. Many times I hear, “Hey, I read your post about
[whatever] and bought your book.” Again, my doppelgänger never stops
peddling and promoting for me while I’m off doing something else.
Similarly, the same legacy concept applies to posts made by others, not just
by me. For instance, there’s a forum post questioning the credibility of a certain
unnamed guru. I can’t count how many times someone has told me that they
bought my book because of that thread. In a nutshell, the sales funnel goes like
this:
1.
Search Google for background on guru.
2.
Find and click my forum’s thread via Google.
3.
Read valuable information.
4.
Read great word of mouth about my book(s).
5.
Purchase my book(s).
I’m guessing this thread has made me $25,000. That's right, other gurus and
their market penetration is selling my book, thanks to my forum. And that’s just
one thread; there are 30,000 more.
Legacy structures also play a role in how I spend time. One example—one
you shouldn’t follow and I’m embarrassed admitting—happens a lot. I am often
asked to be interviewed on radio. These interviews take about twenty minutes,
and while they can garner good exposure for me and my book, I typically decline.
Why? No legacy structure. These interviews aren’t available anywhere except in
one space of time. Once the interview is over, it evaporates like a fart in the wind.
It does not survive time. Sure, I could sell more books, but since I dislike
interviews and love my
UNSCRIPTED
retirement, I don’t need to do them. Ahh,
the beauty of “fuck you.”
Nonetheless, if you’re trying to grow a business or inspire a movement, I
don’t recommend declining interviews. Remember,
before you can do what you
love, you have to do what you hate.
To demonstrate legacy structure, I logged into my business bank account and
recorded all the automatic deposits and their sources. The following chart
highlights the legacy structures paying me regular bank deposits. There are more
than twenty:
Google AdSense
VigLink
Google Play
Amazon (FBA/Seller Account)
Apple iBooks
Book Distributors (3 total)
Amazon (Kindle)
PayPal (Membership Revenue)
Kobo
PayPal (Sponsor Revenue)
Lightning Source (UK)
PayPal (Advertising Revenue)
Lightning Source (US)
Visa/MC (eCommerce sales)
Lightning Source (AU)
Vanguard
Barnes and Noble
T. Rowe Price
Rental Income from Tenant
TD Ameritrade
Foreign Publishers (10 total)
Fidelity
Again, each of these legacy structures effectuates my legacy value systems.
My legacy system surrogates for my time, but so do the systems promoting it! An
autonomous system sells the autonomous system. Who would have thought? My
“cost” in these systems is the channel’s administration time, usually amounting
to minutes.
For example, the Amazon FBA fulfillment system sells my books. I timed
how long it takes me to prepare and ship a case of books. Prep time and delivery
to the corner UPS store take me seventeen minutes. Once I send it off to
Amazon, it’s out of my hair: no packaging, shipping, or further time required.
With thirty-two books in each case at a six-dollar profit per unit, I make $192 for
each case.
Now $192 dollars isn’t impressive, but that isn’t the point. The point is the
return on time invested (ROTI) is impressive. Calculated at an hourly rate, my
time is paid at $677 per hour ([60 / 17] X 192). Would you object to earning
nearly $700 per hour?
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