I was discussing finances with my son and we discussed how remarkable that my father or his grandfather was able to work an 8 hour job, 5 days a week and buy both a house, a car, take his family on vacation a couple times a year and save for retirement. We both agreed that things cost much more now comparatively speaking and the big push now was to make more money to afford the modern cost of living, which is necessary to live where you want versus living where you can afford. My son’s prospective was that the wages for most jobs seem inadequate for a single wage earner to afford all these things a single earner use to and that even with both he and his girlfriend working at jobs paying them a wage considered better then most, they don’t have much money left at the end of the month for savings and investment. My son and I agreed that one way to make more money was to work more hours, and the other way was to make more per hour through education, promotions or overtime.
I thought this was a good lead into one of my favorite wealth building topics scalability. All of us have on 24 hours a day and 7 days a week. The most important currency in the world is time and we are paid a hourly wage dependent on what the free market and other factors has decided our time is worth. We then trade our time, the amount of life we get on earth for money. In general the most common methods of increasing the amount your paid is to give up more time or get paid more for each hour. But I pointed out to him that there were other methods. I explained earned and unearned income. Earned income being wages from labor and unearned income being income from investments. However to someone with no money left over after paying the bills, investment income discussions tend seem to be irrelevant. So at this point in the conversation I discussed scalability.
I always explain scalability this way. When you work a traditional job there are limits to your ability to increase your income per week. There are normally 8 hours in a day. At the upper limit you could work twice as many hours to double your income and at the usual wage scale if you Putin many years on the same job you could double your pay. But your trading every waking hour to scale from 1x to 2x. And now you have no life then work. I feel that certain businesses have better scaling potential and that he should study and understand scaling as a motivation. At this point he correctly surmised that I meant working for himself, which was correct. But I felt an important point was that the business needed to be more scalable then a job if it was to have an impact on his life. I stressed that just opening his own business and wasn’t always the solution because he might have to spend just as much time on his business as he spent on his job. So he is still a slave to wages, but now he is paying himself to work all the time. Which might seem more satisfying, but your still trading time for money.
I suggested he study businesses which scale upwards more the 2-4x, so he can make more money and work less, not more. The true reward is more time, not less time. More money does mean much without more time.
So I explained why I trade stock and either ETF or Index Fund Options because of scalability. I explained when I first started trading options my goal was to match my earned income from my job. But once I achieved that I realized that the next step was to double my income and half the time I work. Once I accomplish-listed that, I realized that I could get increasing my income without increasing the time because my business was scalable almost to infinity. This was the path to true freedom. I also explained I do this with options, others do it with stocks, other futures and others currency trading.
Additionally there are multiple paths like internet marketing, drop shipping and other businesses which allow you to scale your income better then 2-4x and that generates enough wealth to be free to choose when you work and how often.
We agreed to start his options trading lessons and I gave him a book to read.
Knowledge is power, that power can generate wealth and that wealth can provide freedom.
Free yourself.
✍🏼 Written by Shortsegments.
Picture Credit; Cartoon by By Charles Schultz, now Part of the public domain.
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