If All You Do is Work, You’ll Always Have to Work
Imagine that you have a sweet job. You get to do something you love in an environment that is outstanding, and they pay you handsomely to do it. And not only that, you also get to go on several trips every year to exotic locations around the world, all paid for by the company.
That seems like the perfect scenario, right? It did to me.
The problem with it, though, is that there’s no long-term future in it. The dream job could end tomorrow, and you’d have nothing to show for it. Nothing.
If your goal is to achieve financial independence, definitely start with Dave Ramsey. If you don’t get the basics right, it won’t matter how much money you make. You’ll just blow it again.
Once that’s done, though, there are different ways of achieving your goal. You can save your way to financial independence if you want to, but I’d rather do it much faster. Here’s how Ariel Investments President Mellody Hobson puts it:
When I was 22, a friend who is very successful explained to me that no one ever got rich through earned income. “Look at all the great wealthy families,” he said. “From Carnegie to Rockefeller, it was never how much they made at work that made them wealthy — it was their investments.”
And that made me shift from thinking about a paycheck to thinking about building equity and long-term wealth.
A huge paycheck is nice, but it’s nothing at all when compared with building equity in your own business.
Dey
February 21, 2009
at 8:37 am
Shane:
Thanks for some great Saturday morning coffee; another great post. I recently discussed this topic with friends and family. Oftentimes, we are conditioned to to work within our communities. That is to say, that we are socialized to work for “a company” or someone else rather than ourselves. It is very difficult to implement a sweeping paradigm shift to the older generation, but fortunately the younger generations get it.
Lee
February 21, 2009
at 5:07 pm
I’m not a fan of Dave Ramsey because of his aversion to credit cards and debt. There is such a thing as good debt, meaning debt that gives you more money back as a result. Student debt and mortgages are all examples of good debt. I agree with his focus on living frugally and not building up piles of useless stuff around you. That said, I think one would be hard pressed to do business in the online world by strictly following Ramsey’s advice.
I would add to the list of “getting started” motivational books is Cash Flow Quadrant by Robert Kiyosaki. He groups people into 4 “quadrants” – E for employee, I for investor, S for small business owner or consultant and B for business owner. Where this book excels at is helping you identify your current mentality and status and help you move out toward the quadrants that build real wealth, i.e. B and I.
Keep in mind it’s always your employer’s job to give you just enough money and satisfaction to keep you showing up to work but never enough to completely satisfy your wants and dreams. As I said in a previous comment here, one needs to give up the idea of the Ferrari’s and big homes for the moment and just take a single step. That step can be as simple as turning off the TV and loading wordpress on a domain or as extreme as firing your boss but it all starts with a single step.
Shane
February 21, 2009
at 8:36 pm
Totally agree with you about Dave Ramsey, Lee. However, most people I know are way too comfortable with debt. He instills a healthy respect for it. It’s like handling snakes: if you’re not careful, it could bite you — and quick. I’ll have to check out Cashflow Quadrant.
And great commentary on the role of your employer and just getting started.
All in all, probably better than what I wrote