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The traditional business mindset was that a client should pay you first, and only after will you serve the client (or deliver a product).

The new business mindset is the opposite: serve people first, and if you serve them well, they will then pay you.

This is just one example or illustration of the new doctrine, “Free is the new cash.”

In other words, you must offer a lot of FREE products and services to people, for in doing so, you dramatically increase the odds that they will trust you and buy from you.

So “giving free products and services away” will bring cash closer to you in the future.

Hence, the expression “Free is the new cash.”

This chapter explores all the ways in which you can create free value, free products, free services, including recruiting collaborators to provide free stuff to your clients and prospects.

There is a concept in psychology called “precognitive creative commitment” which refers to the idea that when you commit to a course of action, you automatically activate the faculties that are required within that course of action.

For example, if you bought 10 blank notebooks, then you will unconsciously send a signal to your brain or mind to be more creative (so you can fill out those 10 blank notebooks).

Similarly, when you create “capital containers”, you will automatically be driven to CREATE capital (which you then pour into those capital containers).

This chapter explores all the ways to create capital containers, and how to fill them to capacity.

Passion is the “content” while capital, in any of its infinite forms, is only the “container.”

The dynamic interplay between content and container, is similar to the Chinese concept of Yin (creativity) and Yang (aggressivity).

The strategic balancing of these two powerful forces of nature, creates capital in all of its forms.

Women generally have more “content”; they are more subjective, more passion-oriented.

Men generally behave more like “containers”, setting boundaries and rules and constraints.

However, in EACH person, there are both Yin and Yang aspects. It is up to everyone to fully develop and balance these two opposing aspects in order to create wealth.

Concretely, a person must discover her passion, and then shape it or “containerize” it in a form that will be useful or pleasant to others.

In so doing, she creates “use value” and thus can expect to receive cash in return.

If capital is like a tool, then you will benefit greatly by moving from “services” to “products.”

In other words, when you create a product, you can relatively easily mass manufacture it, and distribute it to thousands of people who can use it.

In contrast, when you deliver a service, only one person usually benefits. Also, you cannot easily replicate or mass “manufacture” a service.

There are exceptions, of course, such as fast food chain restaurants, yet even in those cases, a platform (the business system and set of procedures) had to exist in order to deploy and scale the service.

The trick therefore is to “productize” your services as much as possible.

(to be continued)

Capital creation is the key to wealth creation.

So it makes sense to spend an entire chapter on how a person — an ordinary person — can create capital every day.

At first, this might sound unbelievable to you. Indeed, how can ordinary people CREATE capital every day?

Yet, once you learn HOW to do it, you will want to do it ALL THE TIME! Trust me, I feel that way right now.

How do I create capital every day?

One of the ways is that I use Audacity (available for free at http://audacity.sourceforge.net).

I record my voice as I speak on matters like career, business, creativity, technology, etc. and then insert the resulting audio file into Windows Movie Maker (which is also free) in order to create videos that I sell via Payloadz by giving away free samples as unlisted Youtube videos.

Okay, that was quite a mouthful so let me say it again, but in small steps.

  1. Download Audacity and install it on your computer
  2. Record yourself as you speak into the microphone. Stop after 3 minutes.
  3. Listen to yourself and write down, on a notepad, more ideas to reinforce what you said in the original 3 minutes of recording
  4. Repeat 2 and 3 until you feel you have a good recording (i.e. it contains enough valuable knowledge for people to pay at least $5 to download that recording)
  5. Go to Payloadz and open a free account
  6. Connect it to your Paypal account
  7. Upload your audio recording
  8. Promote your audio recording to people who might be interested
(to be continued)

The resume is usually the main document certifying, more or less, that the person indeed has the skills, knowledge and experience which make her suitable for holding a particular job.

The main economic mistake of most people, however, is to stop there and not develop the resume further into other useful documents like:

  • a technical article on one’s expertise
  • work samples
  • methodologies used when one is working
  • technologies and applications used
  • etc.

Human capital securitization, then, is the new discipline of making or creating documents which explicitly testify to a person’s abilities, skills, capabilities, expertise, etc.

The term “security” comes from the financial industry where a security can be a share in a privately held or publicly traded company.

By “securitizing” one’s human capital, one becomes more “useful” to employers and clients for they can easily see, understand and appreciate the economically relevant aspects of one’s human capital.

However, the key benefit is to be able to SELL such human capital securities for they have value in themselves.

For example, a person can record herself using Audacity (a free sound editing application) as she explains her expertise or a particular methodology she uses to add value to a process.

Then, she can sell the resulting audio recording (in MP3 format) on Payloadz.

It is vital to understand human capital securitization because it is the process through which one becomes intensely aware of one’s entire human capital.

Without securitization, a person’s human capital will forever remain tacit (that is, in the head) and thus will force the person to keep working for somebody else.

With securitization, a person’s human capital can be captured, illustrated, explained and even demonstrated through various media such as PDF files, audio recording, video files, etc. which can be sold or be used to demonstrate to clients the extent and depth of one’s expertise and mastery.

China uses the strategic churning strategy quite profitably, through which it has become the premier manufacturing nation.

Here’s how they do it: they mass manufacture all kinds of stuff and sell first to the domestic market (China) which has low standards.

Then, their second round of manufacturing, which benefits from the first round in terms of the experience curve and quality control, exports to markets like Mexico and India (whose standards are higher than the domestic market).

Finally, when they have perfected their manufacturing after so much “test runs”, they export to Europe and North America (where the standards are highest).

The very same strategy can be used when you create capital.

First, seek markets where the standards are low. This way, you get to create as much capital as possible while developing your learning curve.

Next, serve a market where the standards are a bit higher, and finally, serve the most demanding market (of course, you can at this point charge more to improve your margins).

(to be continued)