It may surprise you to hear that jobs do not create wealth. Jobs are just a means to a lifestyle. Jobs will almost always never make you rich. Rather, you take the capital from a job and apply it towards investments, such as stocks, real estate, or your own business. (You are investing in yourself, too, right?) Use money to make more money. Do this:
- Leverage the power of compounding interest.
- Multiply your time through multiple sources of income.
Too often, people rely on jobs, thinking this is the way to riches. They think if they can just get a 6-figure job then they have it made. Even with a 6-figure salary, they find themselves living from paycheck to paycheck. Perhaps they have a job for several months to a year. Soon, they find themselves laid off once again. Over time, people are playing catch-up with their savings, meaning that with the next job they are paying back into what they took out from their emergency funds to weather the unemployment storm. (I know this all too well, having found myself twice unemployed for 3 or 4 months each time over a 15-month period.) Is it any wonder most of us wonder how we’ll ever make it?
Parkinson’s Law describes this financial scenario best:
People’s expenses typically rise to match their level of income.
No matter how much money people earn, they tend to spend the entire amount and a little more, getting themselves into debt.
Jobs Do not Create Wealth
They Are a Means to a Lifestyle
Jobs do not create wealth. In a job, you’re trading dollars for hours. It’s a losing proposition no matter how you slice it. For each and every one of us, our time eventually runs down to zero. To make the best use of your time, leverage the power of multiple sources of income (MSIs). Creating MSIs are simpler than you think. Here are some examples:
- Invest in real estate.
- Invest in stocks (other people’s businesses).
- Invest in cash and bonds.
- Invest! Invest! Invest!
Here are some harder ways:
- Start your own business
- Create products and services.
- Invest in yourself
In this way, you’re leveraging your time. Want more money? Most people think about trying to get a raise with their employers. As a business owner, you could increase the price of your products and services.
That said, not everyone wants to run a business. This is fine. You’ll have to invest with greater intensity to create the wealth that would have come from having a business.
Here’s a parting thought for this section from the book The Millionaire Next Door:
Twenty percent of the affluent households in America are headed by retirees. Of the remaining 80 percent, more than two-thirds are headed by self-employed owners of businesses. In America, fewer than one in five households, or about 18 percent, is headed by a self-employed business owner or professional. But these self-employed people are four times more likely to be millionaires than those who work for others.
Jobs Do Not Create Wealth
Invest in Yourself
Most people stop learning when they graduate from high school or college. When was the last time you learned something outside of school? Investing in yourself is hard work. Yet, increasing the value that you provide to the world means bringing in more wealth.
Take the time to learn new things. Avoid linear thinking. We humans tend to be poor predictors of our future, meaning we guess wrong almost all the time! Take a look at technology now. Imagine what the future will look like in 30 years. Then, take what you think will happen and put it all into the trash can. Chances are you’ve just guessed wrong. Here’s 30-minute video by Neil deGrasse Tyson explaining how we need to look at innovation in 30-year periods rather than one-long linear period.
Because of our propensity to be bad predictors of the future, this means we have to keep reinventing ourselves to adapt with the times. You will likely have to go back to school several times in your life to be marketable in whatever new skills the current job market requires. Even business owners have to stay current with the times.
Passive Revenue Streams
Jobs do not create wealth. Passive revenue streams do. You may have heard of MSIs being referred to as passive revenue streams, too. The phrase, passive revenue stream, is a misnomer. You have to do the work to set up these streams. The work can take you months or even years. For example, it takes a while to be seen as an authority that people will pay to help them solve problems. This may mean writing hundreds of blog articles and promoting yourself across various other sites, just to get your name out there. The idea is once these stream are set up, you have far less work to do.
Yet, you have to invest in yourself. For example, would you be able to speak into a microphone to make these authoritative videos? I know plenty of folks who are mic-shy to the extreme. They get a ham radio license but never get on the air because they are so very mic-shy.
Do things that are synergistic with each other. For example, if you want to make Podcasts but are mic-shy, then consider taking Toastmaster classes to help you better your speech-giving skills. Get into ham radio and encourage yourself to participate in weekly Nets, which are the equivalent of meetings over the air. Put yourself in positions where you have to exhibit leadership skills.
In other words, jobs do not create wealth. Investing in yourself does.
Caveat Emptor
Some astute readers may be thinking at this point: What about engineers in tech? Statistics show the average software engineer’s salary in the Silicon Valley is $165,000. If you happen to be in this category, then congratulations! Unfortunately, this salary is higher than the national average. This article is geared towards those of us who make significantly less. We have to create wealth somewhere else, especially if our jobs aren’t cutting it.