Go to school, study hard, get good grades, so you can…
Nice advice pops. Problem is, this advice doesn’t make sense anymore. Sure, it IS still a good idea to get some sort of formal qualification. It IS always a good idea to work hard, to dedicate towards your goals. But wouldn’t you like to have optimal ROI (return on investment) for your effort and time? Sure you would…
Let me give you perspective.
You have a finite amount of time on earth, agreed? (one day you will die)
And when you have a job, you are getting compensated for your time, right?
So, in effect, you are “selling” your time.
Ergo, you are SELLING your LIFE for money.
That is what you do when you trade time for money, and I challenge anyone to prove that wrong.
Besides the fact that you sell your life, trading time for money is also terribly inefficient. You and I and everybody else gets 60 minutes to the hour, 24 hours to the day. The future approaches at a speed of 60 minutes per hour, and you cannot slow it down or speed it up. Nothing you do can give you more hours in a day.
So if you trade time for money, you can only make more money in two ways:
1. Work more hours (at the expense of living…).
2. Get more money per hour.
(And EVERYBODY has an hourly rate, not just contractors or consultants. Just work your salary back to an hourly rate, done. You might be surprised at how much your undersell yourself.)
In summation, your earning potential is limited using this approach.
What is the answer? Passive, residual income. Somehow you need to create something of value that makes money independent of the economic climate, your location, the time of day or your continuous involvement. Something that sells itself. Brings in money while you sleep. Something scalable.
My father drilled this concept into me: “Your time isn’t scalable. Financial freedom comes from finding something that is.”
Only by doing this can you buy back your life.
What you might not realise, is that you’ve “pre-sold” your life. By signing your employment contract, buying a house, a car and living the lifestyle of the working class you’ve already implicitly agreed to “sell” the remainder of your life to the man in the top office. Scary isn’t it? Breaking out of this rat race is difficult if you have piles of bills to pay and a family to maintain. Fear keeps you enslaved in the corporate world. You have to do everything in your power in order to reach Escape Velocity (in physics escape velocity is the speed needed to “break free” from the gravitational attraction of a massive body, without further propulsion, i.e., without spending more fuel.) Look out for an upcoming article about how you can reach Escape Velocity.
But, I’m not advocating you quit your job in a moment of impassioned ambition. Hell no, this is your safety net from which you can launch yourself higher up. Important however is that you get the thought processes going, that you start thinking.
Financial Freedom = Value for Others
Only by creating value for other people can you obtain financial freedom for yourself. So the number one question should be how can you create this value? What is your thing of value?
Look, I can’t tell you what your thing of value is. I don’t know your heart or passions. You’ll have to do some searching in yourself to figure out what you can offer the world. But I can give you a starting point.
Ask yourself these questions:
1. What is your “perfect day”? What do you want to get out of life?
2. What makes you unique? What “thing of value” can you offer mankind that no one else can?
If you find an intersection between these two questions, where you want to spend time creating something of value that is also commercially viable, then you should explore it deeper. Why commercially viable? Because let’s be honest, even if you want to eat pizza all day, and even if you can eat an entire pizza in one bite, NO ONE CARES. You’ll be hard pressed to find people willing to pay to watch such a spectacle.
But I don’t have any ideas?
Firstly, don’t lie. You have ideas. Maybe you’ve suppressed your brain over time and ideas don’t come as frequently as they used to, but you can exercise your idea machine (thanks for this concept James Altucher) and get better at it.
Secondly, I’ll give you a few ideas to play around with:
1. Write books. Authors make money while they sleep.
2. Make music. Same as authors.
3. Sell stuff online. A lot of people run entire businesses on sites like BidorBuy.
4. Invest. Make your money grow.
5. A business that you can run on auto-pilot, or hire someone to run it.
6. Rental Property. Cash comes in every month.
There are thousand of examples, and the ones listed above are very broad, but you get the point. Take pen and paper, and start brainstorming. Aim for at least 10 or your own. And then explore each one of them. Explore options that might require a lot of pre-work, but once done can continue generating income for you without much intervention or maintenance.
When you are thinking about your ideas, try and remember that human beings rarely do anything when they are not emotionally moved to do so. So don’t think about selling products. Think about solving problems. Sell solutions. Sell feelings. Put happiness in a box and sell it.
What traits should your income stream have?
Now your needs might be different from mine, as you identified when you thought about your ideal day. But generally speaking I’m pretty sure my opinion on the ideal traits will be universal. For financial freedom, look for a income stream that:
1. Has a high profit margin.
2. Doesn’t cost a lot to set up.
3. Allows you to work flexible hours.
4. Is not location dependent.
5. Makes money while you sleep, i.e with no involvement from yourself.
6. Is sustainable – so should have real value, solve real problems.
7. Is scalable. So you can sell 10 or 10 000 000 without breaking stride.
Look, I have a job too. And I understand free time is limited. So world domination isn’t going to happen overnight. But start with what you have. Start writing that novel that’s been sitting in your head all these years. Teach yourself programming skills. Try selling something online. Make art. Create value for other people. Start crap and get better.
Of course, some people cannot overcome the friction of their current circumstances. They just cannot face up to the changes they’ll need to make in order to take back control over their own lives. I understand that, as a pragmatic person myself, I play the “what if” card too often. But today I ask this: What if many years from now you are still working at the job you hate, dreaming of one day breaking free? What if you dream about really living your life till the day you die, when it’s too late to do something about it? Stop avoiding life by making excuses for your inaction. The corporate financial slavery we face today might not be as bad as the physical slavery and injustices of yesteryear, but it is still our battle to fight.
I am the master of my fate:
I am the captain of my soul.
from Invictus, a poem by William Ernest Henley