Estimated reading time: 4 mins
In a world where we are often conditioned to trade our time for money, as an employee or small business owner – there’s an intrinsic limitation on how much one can make as there’s only so many hours in a day plus there’s a clear ceiling to the amount you can charge for each unit of time.
Essentially, the only way to make a serious amount of money is to break free from this paradigm of swapping an hour of time for a particular dollar amount, as the most intelligent way to make more money is to break free from the financial treadmill of employment and set-up your own business in order to invest in building cash generating assets.
Many people, however, when thinking of setting up their own business would consider something like a traditional small business to provide eventually 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.
Let’s take window cleaning for example, if you’re a one person window cleaner there’s an intrinsic limit to how many windows you can clean each day; the only way to make more money is to charge more (but there’s a ceiling to what people are willing to pay) or work more hours (but there’s a limit to how many hours there are in a day also).
However, if you were to set up a commercial window cleaning service where you employ a number of people, you then have leverage, meaning you can now grow this business exponentially because all you need to do is hire more people to clean the windows and be fantastic at sales and marketing in order to get more clients. In this sense, you are building an asset that generates income beyond you directly swapping your own time for money.
Now, when it comes to investing and starting businesses, you’ve probably heard the myth that you ‘need money to make money’ particularly when it comes to creating assets. If your plan is to buy a few houses in order to generate rental income from tenants, then yes, that would be true. However, today, someone with hardly any money, credit rating, or access to resources can achieve financial freedom; particularly when looking at opportunities online.
Today, with the power of content marketing, anybody can build a substantial income from creating online courses, e-books, and affiliate advertising at very little start-up cost. The most important benefit to this, is that once an asset (e.g. an online course) is built you can 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, their time in return for money; whether you stack shelves in a supermarket or perform open heart surgery – in both instances, you would be swapping your time for money.
The amount you are able to trade your time for is contingent on the value you provide; an attorney will often charge more for an hour of their time than a janitor – because the service they provide has a higher perceived value. That’s not to say they have more value as a human – it just means they are contributing more value to a client from the hour they spend doing what they’re doing.
The challenge, even if you are a highly paid attorney, is that if you want to earn an extra income there are only so many hours in the week that you can trade your time for money – and there’s also a ceiling that people are willing to pay. Similarly, presuming you value your life beyond work – you need time to enjoy life.
Here are two simple ways you can start making money work for you – rather than you having to work for it.
The first is to invest in the stock market or cryptocurrency, which can seem a daunting for a beginner, however there are a number of online courses you can take to get your head around the logistics. The second is to put your cash into a high interest savings account, which might not sound like the most glamorous or high yielding method, but when you consider some countries such as Turkey and India will pay up to 20% interest, this can be a lot more tempting in consideration of the security associated with savings accounts.
In summary, the smart way to make money is to have assets that are working for you. The key point is to stop trading your time for money, and instead, start having your money work for you.
