For a long time, my family taught me how to go to school and university and get a good job as an employee for a stable employer. “Be a doctor,” they said. “Be a lawyer,” they said. “Get one that has good benefits and a retirement plan,” they demanded. My grandmother was so convinced that I went to a good college that my graduation from the University of California, Santa Barbara, surpassed all my other accomplishments that she considered far greater than getting a degree.
What is your fixation about going to college, getting a degree, and getting a steady job? Personally, I think it’s an old school, fear-based mentality. The second level of Maslow’s Hierarchy of Needs deals with the inherent human need for safety and security. In our caveman days, safety was about finding a cave that would keep saber-tooth tigers out. Today, it means financial security. You see, in my grandmother’s day, there was very little financial security. In her lifetime, she has seen five American wars, been wrongfully imprisoned by the American government during World War II because she was a Japanese American, suffered through the Great Depression of the 1930s, and dealt with the “Monday” stock market crash. Black” from 1987. Empathizing with her life, I can see how she would value higher education and a steady job because anything else would be too shaky in her mind. I got my degree and made her happy, but I had no desire to trade my time for money and have someone else control my freedom and the amount of money she could earn.
Myth: Formal education will lead to greater financial success
I passed university without any kind of intensive study or desire to study. In fact, he was a horrible student in terms of study habits. I credit my completion of college solely to my innate ability to choose the correct multiple-choice answers based on deductive reasoning and my love of writing research papers. The whole time I was there though, I was looking for information that I could take to the streets, practical information that I could put to use, after all, I was paying tens of thousands of dollars for my world-class education, but I went through my college education with maybe only three classes that really provided me with good and useful information.
As many college grads discover, I found that when you finish college, you enter a business world that cares little for education and wants trade-specific marketable skills. So there I was, diploma in hand, finding out that I was no better than a high school graduate. In fact, I was at a disadvantage to those who had entered the workforce right out of high school because they had worked their way up and developed marketable experience and skill sets that were appreciated by employers. I felt a little ripped off because all my life I was told, graduate from college and the money will be there.
The truth may sting, but the record should be clear and that is that in this day and age, employees with a four year degree are a dime a dozen. As an employer right now, I can say that a four-year education tells me you can read and write well, but little more than that. What I am looking for is experience and practical knowledge. I’m not saying a four-year education is worthless, but your weight at the career negotiating table isn’t as heavy as it used to be. Let me put it another way: going to college will make you a good employee, but it doesn’t guarantee wealth.
The Employee Salary Trap
Earning a corporate salary is the biggest obstacle to building wealth if you choose it as your only vehicle for wealth. That’s because for most of us, our salary is set by our employers and any and all increases are dictated by our employers. In short, we won’t get rich unless our employer says we can. Unfortunately, I have not met a single employer in my time who decided to enrich his employees. Having a salary is stable and people like to be stable, but to develop a millionaire mindset, you must move away from seeing your salary as the only means of income. Being a salaried employee is not a bad thing. You can use the experience to learn and gain new skills and have a steady stream of income to pay the bills. I’m just saying that you shouldn’t rely solely on salary from him if you intend to get rich because, at best, your employer will only let you earn a decent living, not get rich.
Self Employed Versus Business Owner
Private practice doctors, lawyers, and all other similar well-paid service professions make a decent living, but they are not what I would consider wealthy just because of their professions. This is because even though their hourly wage is higher than average, their wealth framework is still the same as the gardener making only $8.00 an hour, and that is that they are still trading their time for money.
What’s wrong with that? Well, it’s because we only have a limited amount of time in the day to monetize. Of course, these professionals have freed themselves from corporate dictatorship, but they have another problem they face: not working means having no income. That means if these people are sick, on vacation, or injured, then their entire source of income dries up because they can’t trade their time for money. This puts enormous pressure on these people to keep busy, which partly explains why I think lawyers are the most nervous people I know. That brings me to this point: Being self-employed means you’re trading time for money, while owning a business means you’re using the power of leverage.
What is leverage?
Business owners are the richest people on the planet and many of them do not have any formal college degree. A good example is Bill Gates, the founder of Microsoft, who is worth approximately $25 billion at the time of writing this article. He dropped out of Harvard and founded his own company. Business owners use the power of leverage, which in this context simply means that they get more out of their work hour than the self-employed or employees. In Gates’ case, he developed a computer operating system that he licensed. He strove to create a product that offered a lot of value to his buyers and he benefited immensely from it.
But you don’t have to write software to get rich like Bill Gates. People who buy real estate work on the same passive income model. People who invest do the same. In the field of services, savvy service professionals start hiring others to provide the actual services and get a share of the profits, thus creating value for both the service provider and the customer. That is taking advantage of the services.
Business owners look for multiple sources of income. Employees believe they have a level of security in their job, but an unexpected layoff or being fired could wipe out that security as soon as it was earned. Worse yet, the employee has nothing but unemployment benefits to work on. A business owner may lose one of his sources of income, but still have others to work with. This is what I consider security: having multiple streams of income.
take a risk
In my Personal Development sessions, I advise people to face their fears head on because taking on that challenge makes them grow, both personally and professionally. Both employers and employees have to deal with failure, but smart entrepreneurs aren’t afraid to take that risk, knowing it will bring them one step closer to success. Be willing to try new ideas and go outside of the box. Look for additional ways to earn money and don’t just talk about it, DO IT. That is one of the most powerful concepts that makes people millionaires: the ability to act.
While this article only talks briefly about the millionaire mindset, keep these key points in mind:
* We all have the same amount of time during the day and we can only sell part of our time.
* If you trade your time for money, the best thing you’ll do is earn a decent living. You will not get rich with this model.
* Find ways to leverage what you do to get more out of your time, and therefore more money.
* Create passive income through positive cash flow producing products, software or investment vehicles to create multiple streams of income.
* Don’t wait for the perfect moment because it will never happen. Act now, even if your plan isn’t perfect.