Metcalfe’s law of economic power may help you to build a financial freedom model for you. Let’s learn about this law in this article. Metcalfe’s law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (1). The same law applies to finance as well and can be used to evaluate the economic power of an individual. Thus it states as “the economic power of an individual is proportional to the square of the number of businesses or revenue streams created in the system”. For example, if an individual holds one business, then her economic power will be one.
1 (individual) : 1² (business or income sources) = 1:1X1 =1:1.
The Power of the Square in Metcalfe’s Law?
The moment she has two businesses (or income sources), her economic power will be 4.
1: 2² = 1:4
You can now figure out, why many of the major business houses holds more than one business (or income sources) at any time. They align with Metcalfe’s Law of Economic Power.
1 (TATA) : 100² (business or income sources) = 1: 10000
Imagine the economic power of an individual, if she holds more than 10 businesses (or income sources). But it is sad that many of the people live a 1:1 life. It is a key law to step into the realm of financial freedom and you should use it in your favour.
Life Lessons
Take advantage of the power of the square and its compounding effect not only in earning money but in many areas of your life. For example health, you start jogging to improve your health, then work on your diet, then you align your thoughts, words, and actions and live a truthful life. All these multiple efforts around your health will power (square) you in shaping your body, soul, and spirit. Thus the law here would be called Metcalfe’s law of health power. Think about how to apply this law to other areas of your life.
Also refer this article 1- Lata Mangeshkar: Early Life of Legendary Singer
Also, refer to this article 2 – What is a temporary alternative for mentors?
About the author
Manoj Sonawane is an author, business storyteller & education strategist. He had several publications at the national and international levels to his credit. He is on a mission to transform over one million lives into successful lives in the next five years through his writing, books, and teaching.
