The majority of people trade their time for money, meaning their income is linear and restricted to the amount of hours they work. The challenge with this is that there’s a ceiling to how much a person can charge for a unit of their time, and there’s only so many hours in the day that one can be working. Plus, there’s also the consideration of having enough time to enjoy life rather than spend all of it working!
This article encourages you to think a little differently about making money…
If we look at the career of a programmer, for example, typically, they can earn quite a lot of money each hour, yet they invest a large amount of time developing an app and following the process of the agile manifesto, which means they come out with a decent compensation for their time – but once they finish the project, that’s it – there’s no future return on all that effort and time investment they put into turning the app idea into a tangible reality (unless they are savvy enough to request a little equity in addition to salary).
In this vein, there’s a smarter way to make money than swapping time for money.
Think of it this way, would you prefer to be paid $1,000 an hour for 100 hours work or would you prefer to be paid zero for 100 hours work, but share 50% of the profits of an app that uses a subscription model such as Spotify or Netflix to generate revenue long after you’ve finished working on the app. If you look at this potential, let’s say that just 1,000 people are paying $10 per month – that’s $10,000 per month, which could soon build into 100,000 people using the app which would be $1,000,000 per month!!
This is the power of financial leverage, and today, the average person has never been in a better position to become a millionaire – indeed, you could be a fifteen year old kid in your bedroom and come up with an app, develop the code, publish it in the app store and make hundreds of thousands within the space of a couple of years!
In the alternative and more traditional route, people would instead go to school, college, and maybe even do a master’s degree to then work for a large company where they were being paid $75,000 per year; trading their time for money, living a 9-5 lifestyle, trapped in the rat race of life.
This concept isn’t limited to app developers, look at musicians and authors – they invest a large amount of time to develop an asset that is then leveraged time and time again, for many years, if not decades – producing income, like an orchard of fruit trees constantly generating fruit.
The same could be said of property developers, as once they have established a portfolio of rental properties, other than maintenance the house pays for itself and they live off the rental profit whilst also sitting on a number of nest eggs that are most likely going to appreciate over time.
Interestingly, we all know this, and it’s clearly the smarter way to make more money, yet we are so often conditioned to trade our time for money, as an employee or small business owner on a direct basis… why… because we probably don’t believe it’s possible for us, or because we fear failure.
It’s often fear that holds us back from making financially lucrative decisions. Look at cryptocurrency, for instance, if you had invested a few thousands dollars in bitcoin a couple of years ago – that would now be worth several hundred thousand dollars!
The majority of people didn’t invest in bitcoin, because either they didn’t know about it, or more likely, they were afraid of losing their money – and also didn’t have the investors mentality, which is that of delayed gratification, as most people prefer to receive money and then spend it on consuming things such as travel, food, clothes, and other fun experiences – whereas investors, would prefer to drive around in an old banger and wear scruffy clothes in the short term, so that in a few years time, they could live a truly wealthy life in the long term as their investments pay off.
Essentially, the only way to make a serious amount of money is to break free from the paradigm of swapping an hour of time for an amount of money, as time is your most precious and depleting resource.
Your time is probably worth a lot more than you are selling it for!
It would appear the smartest way to make more money is to break free from the financial treadmill of employment, or at least to supplement it, by setting-up your own business or investing in cash generating assets.
That said, beware of the trap that many small business owners fall into. They imagine setting up their own small business will provide them with an incredible lifestyle, but unfortunately, a lot of the time people simply swap the financial trap of employment for the financial trap of self employment… and their business consumes their lives to the point they are not financially abundant and they are even more time starved than when they were an employee.
Now, when it comes to investing to build a cash generating asset, you’ve probably heard the myth that you ‘need money to make money’.
Today, however, with the power of content marketing, practically anybody can build a substantial income from creating online courses, e-books, and affiliate marketing at very little start-up cost. The internet has truly levelled the playing field, and the great thing is that once an asset has been created you can then leverage the asset multiple times via automated systems without any further time investment.
See, the challenge when looking to make an extra income is that most people earn a living by trading the most precious resource of all, time, in return for money. You want to find opportunities that allow you to step away from this style of earning an income, and instead move toward building assets.
In summary, the smarter way to make money appears to be to leverage systems, processes and assets so that you no longer trade your time for money in the linear and restrictive way most people do.