While the number of life coaches continues to expand, only a tiny percentage are becoming seriously wealthy. For life coaches to create their own meaningful personal fortunes, several interconnected strategies can prove very helpful, including:
- Become a thought leader. A thought leader is a recognized authority that is monetizing this positioning. It proves highly effective in differentiating your life coaching practice from competitors and garnering high-quality clients. As a thought leader, you are communicating to existing and potential clients and referral sources that you have a deep understanding of a particular area of specialization and an actionable approach that will benefit them.
- Use an achievement-based compensation model. Most life coaches are paid for their time. This can take the form of being paid by the hour or sometimes as project fees. You only have so much time. Therefore, being compensated by helping clients identify and achieve milestones and achieving, is regularly more profitable. Simply put: Do you want to be paid for your time or your expertise?
- Build a high-end clientele. If one of your objectives as a life coach is to become personally wealthy, then it’s usually very worthwhile to build a high-end clientele. Aside from paying well, these clients can become your testimonials (which can be very important if you choose to leverage your practice) and your apostles. Therefore, we need to define “high-end clientele.” Generally, we’re referring to the wealthier members of society, the 1% or better. Because of the fee-based revenues of most life coaching practices, one of the best ways to maximize revenues is by charging premium prices for exceptional expertise.
- Leverage your practice. Most life coaching practices are based on the talents, training and skills of one or a handful of life coaches. While generating significant revenues with this business model is possible, it usually requires working with the very affluent and billing them well. Even in this situation, generating considerable personal wealth is difficult. There are various non-exclusive ways to leverage a life coaching practice, such as licensing your expertise, extensive productization, and brand extensions.
To become wealthy, you must not only earn substantial sums, but you must also keep the monies. You can use several legal and financial strategies to minimize the taxes you would otherwise owe. For example, you can decrease your annual income tax bill by hundreds of thousands, if not a few million dollars. There are also ways to address possible unjust or frivolous lawsuits while increasing your net worth. All these legal and financial strategies are “bright line,” which means they are entirely legitimate. The point here is that as you create greater wealth, you need to take steps to keep as much of it as possible.
Life coaches are in high demand. At the same time, the field is becoming increasingly competitive. You need to employ several business strategies to establish and grow a very profitable practice. However, these actions may not be enough to become a multi-millionaire. You will likely also require the expertise of a sophisticated wealth planner.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.
