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432 - The Secret Ratio: Production Vs Consumption

The Secret Ratio: Production Vs Consumption

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If you’re struggling in any area of your life, it’s probably because this equation is out of balance.

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Best Quote: much value are you providing? You're providing to one person. Can you provide that same service to 10 people, to 20 people? The more value you provide, the more money you're going to make. The natural order of things is how it works. The thing that I was thinking about recently was just how important it is that we are providing more value. We're producing more than we're consuming. In all aspects of life. I first start thinking about it from a business standpoint where if you consume more than you produce, what happens? If you consume more than you produce, then you go into debt, and it's not good.


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Hey, what's up everybody. This is Russell Brunson. Welcome back to Marketing Secrets podcast. This week, I am at Lake Powell, I'm unplugged and that means I have no internet access. I've got no ability to check email or social media or anything, and all I can do is sit and think and play the water with my kids and my family.

It's been really fun. But during that time, I had time to think about some things. And so I want to share with you some of my thoughts today, specifically about how much we produce and how much we consume. All right, everybody. Last year when I was at Lake Powell was the very first time I had a chance to start reading Atlas Shrugged.

And to me, as you've heard me, I did a podcast with Josh Forti earlier year. There's like four or five hour-long podcast talking about Atlas Shrugged. I'm not going to get into that today, but as I was preparing for our Lake Powell trip that we do every single year with our kids, would come down here, we get a houseboat and we just have a fun time with some of our family and friends and stuff, I just kind of started craving that book again because I'd read it last time I was on this trip, and I start thinking about it.

I was like, oh. I started listening to the audio book again on the drive down. And while I've been here during my free time, I'm listening to the audio book and it's been really fun to hear it a second time. It's interesting, the first time you read a book, especially a book like Atlas Shrugged, which I think it's like 15 or 1600 pages, it's a very intricate story.

Ayn Rand wrote it in the 40s or 50s, and it took her, I think, 11 years to write the book. Just the John Galt speech alone took her two years to write, which is crazy. And so in a story like that, people back then... In fact, I got some photocopies of the original manuscripts. It wasn't like on a computer, it was on typewriters, like handwritten. When someone's writing something that complex and spending 11 years on it, there's a lot of things you don't catch the first time through.

These storylines are so cool, and these things that are happening in conversations you missed the first time around. I was like, "Oh my gosh, this is so cool." Just been a really fun experience to go back into that book again and really enjoying it. What's interesting to me is, I don't remember where this came up and it's not specifically tied to the book, but the thought that you're reading a book and you have thoughts start popping in your head, and the thought I started thinking about it a lot was about basically our job as entrepreneurs, or people for that matter, is to make sure that we are producing more than we're consuming, right?

To truly understand this, I think one of the core lessons or things you have to understand is just how money works, how people make money in this world. Money is a by-product of value, right? The more value you provide somebody or a group of people, the more money you make, right? For example, if someone is an accountant, they may make, I don't know how much accountants make, let's say a hundred grand a year, right? Just make numbers easier.

They have one client and that client's paying a hundred grand a year and they're making pretty good money because they're providing value to that one client, right? But they make $100,000 a year, which depending on where you're at, that's either a lot of money or not very much money. But you take that same accountant, instead of them just being account for one client, if they say, "Man, I want to provide more value in the world," that accountant can start their own accounting company.

They can, instead of one client, take on 10 or 20 or 30 clients. Maybe they need to hire some associates and hire some other accountants underneath them. Eventually they've got a business where now they're doing accounting for say a hundred people. That little accounting company might make $1 million a year. The accountant who started at might take home, four, five, $600,000 a year. He's still got the same amount of hours in the day as anybody else, but he or she figured out a way to provide more value. Instead of just doing accounting work for one person and making a hundred grand, they do it for 20 people now and they make a million.

Even though they have more costs now, more risks, we've got to pay for other employees and they got to pay for these different things, because they're able to provide more value, they end up making more money. Money is a direct correlation to value. That's just a core principle that I didn't understand for a long time. It's the reason why a teacher who works in a school could be super, most talented person in the world, best teacher in the world.

But if they're teaching for a classroom and they're getting paid their 50, $60,000 a year as a teacher, and they teach the kids that come through, that's all the money they're able to make because they're not finding any more value. What if that same teacher took their message and started publishing a YouTube channel and started reaching millions of people, they may go from making 50, $60,000 a year to $1 million a year teaching the same stuff, but their getting out to more people.

Now instead of 100 kids a year hearing their lessons in a school, now they're getting a million people a year listening to it through a podcast or through YouTube channel, through some other means, and they're providing more value to more people, so that's how they make more money. All these things are tied together. That's one principal for everyone to understand. If you don't know, don't write it off yet.

I don't make enough money. Well, how much value are you providing? You're providing to one person. Can you provide that same service to 10 people, to 20 people? The more value you provide, the more money you're going to make. The natural order of things is how it works. The thing that I was thinking about recently was just how important it is that we are providing more value. We're producing more than we're consuming. In all aspects of life. I first start thinking about it from a business standpoint where if you consume more than you produce, what happens? If you consume more than you produce, then you go into debt, and it's not good.

Let's say you decided, "Oh, I make $1 million a year, I want to buy a house." But the houseboats cost $3 million. So, you go and you buy a houseboat for $3 million, you're $2 million in debt. You're consuming more than you're producing, therefore you're in trouble. If you want to have something bigger or nicer or whatever it is, you have to learn how to produce more than you consume.

That's going to give you more money. In this book Atlas Shrugged, that was one of the big things it talks a lot about, was just the producers. In the book, you've read it, the society is trying to give everyone based on their needs and their wants, not so much their production. The premise of Atlas Shrugged is these producers.

They need to go out, they're and producing, and eventually the producers go on strike because it's not worth it for them more because of all the government regulations and social pressures and all these things that make it where it's no longer beneficial for them to actually become producers. In the world we live in today, that's it. If you want to make money, you got to produce more. We have to create more value. If you want to save money, if you want to get nice things, you have to produce more than you can consume.

That's like a universal principle. I started thinking about it, just this week since I've been sitting on the boat and eating more than I normally do. I noticed that I am consuming more than I am producing. For our bodies, what do we produce? We produce energy. We go and we work out, we run, we walk, we do things. If my production is more than my consumption, then what happens? I lose weight, right? But if I consume more than I produce, so I'm eating more calories than I'm burning, then I gain weight.

As I'm watching my kids running around, it's funny because I feel like I'm active. I'm an active dad, but I watch my kids running around and they're producing so much energy and burning so much that they can eat whatever they want. They stay tiny and skinny. It's crazy because they're producing so much.

As we get older, we keep consuming, we consume more and more and more, cause we've got bigger bellies and we can eat more and all these things, but we produce less. We don't exercise much. We don't run. We're not running around. When I look at my daughter, Nora, when she goes from one end of the houseboat to the other, she doesn't walk. She's sprinting the whole time. They're just producing more energy, which makes them lose more weight.

Again, if you look at a weight loss or energy management, the goal, again, is to produce more than you consume. I start thinking about universal a principle that is in all aspects of life. In a relationship. I want to make sure that I am producing more value to my spouse than I'm consuming. We're in great relationship.

All of us need to be focusing on that, on production, producing, producing energy for your body, producing value for the marketplace, producing happiness for your spouse, for your kids. Bad things happen when that metric gets flipped, where we start consuming more than we produce. You consume more food than energy produced, what happens?

We gain a lot of weight and it gets really hard. We consume more stuff than we have money that we've produced. We've consumed more than the value we produced. What happens? We get into debt. We get upside down, we don't have any money in savings, we don't have any money to invest. because we're doing those things.

In a relationship, if you are consuming more than you're producing, it's a lopsided relationship. It's not fair to anybody. This becomes a universal value, a universal thing in all aspects of our life. And the more I keep thinking about it, the more use cases I keep finding for this one thing, it's this ratio of production versus consumption.

If any of you guys feel like I want to consume more, I want to eat more, cool. You should do it, but you've got to produce more energy so you can burn that way. If you want nicer stuff, you want to consume more, I want a nice house, I want a nice car, I want a nice whatever, cool, do it.

That means you've got to produce enough to be able to afford it. You got to create more value, produce more value, and then it's okay. We had a conversation last night with one of the teenagers here. He asked me if I was scared when I bought my house, or something like that. We have kind of a crazy house. I said, no, because if you look at it, based on the average person buys a house and takes some 40 years to pay it off.

And so while their house may cost way, way less than mine, I was able to pay my house off in two years. Maybe it's three years. Anyway, whatever it was. But it's because I was producing more. Ratio-wise, it wasn't very much. Because my, because I was producing more value, which made me more money, which now made it so that I could buy this house and it didn't seem like a lot.

Just like my kids can go and they can literally sit down at dinner and eat 8,000 calories and they don't gain a stitch of weight. Where if I'm over 1800 calories in a day, I start gaining weight, because I'm only producing 1800 calories worth of energy in a day. If I'm not there, I start gaining weight really, really quickly. It all comes down to this ratio. Anyway, I know it's common sense.

We know these things, but it just gave me a different way to kind of look at things because it's a universal principle in so many areas of our life. How much are we producing? How much are we consuming? If we're consuming more than we're producing, we're gaining weight, we're in debt, we're having these problems. If you're in any of these things, any area of your life where you're struggling, look at this ratio? Are you producing more than you're consuming?

If so you're probably in a spot where your relationship's great or your energy and your body is great, or your bank account's great, whatever those things are. And if not, I bet you that that ratio is off and becomes a very simply now for us to look at, to diagnose and figure, okay, I want these things. I'm trying to do these things, but there's a math problem here. I am consuming more than I'm producing in this area of my life. I got to double, triple, quadruple down to produce more than I can consume when I want to, because now the ratios make sense.

You can go buy a $20 million house. It doesn't matter if your productions side, if now the ratio works and it's not insane. The insanity happens the other way when you're consuming more than you're producing. There's the math problem. There's the metric. There's the thing to start thinking through. As I was thinking about it again, for myself, it just got me excited and started thinking about all the areas of my life that I'm not happy, looking specifically, this one ratio.

Am I consuming more than I'm producing? If so, that's probably why I'm not happy. You probably don't have the energy. You probably don't have the money. You probably don't have the relationship because I'm consuming more than producing. There's a lens to look at the world through for all of you guys. I hope you enjoy it.

It's been fun for me over the last couple days. I'm sitting here on the boat, looking at different areas of my life and realizing either I'm doing really good or really bad, and it's all coming down to this one ratio of production versus consumption. Hope you enjoy this. Thanks again, guys, I appreciate you. Hopefully you're having great summer vacations as well. Enjoy time with friends and family, and I will see you guys back here on another episode soon. Bye, everybody.


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