TIE #005: The Only Way to Build Real Wealth
You'll work forever if you don't create a little bit of leverage.
I sought financial freedom because I wanted to do what I wanted, whenever I wanted, any day of the week.
Sounds nice doesn’t it? Well, it is nice. You can have that too if you really want it.
Accomplishing this feat started by recognizing a simple idea called “leverage”.
No, not the type where you take out a loan or use a ton of investment margin. The type of leverage I like to call positive leverage.
If you are paid via an hourly wage or a yearly salary, you don’t have any positive leverage.
You trade your time for money at a set rate and are limited by the number of hours you can work in a day/week/year/lifetime.
Remember when your math teacher would say the word “linear”? This is what linear means.
Your income is a simple fraction with a dollar amount in the numerator and a unit of time in the denominator.
If you want to build wealth, you are stuck attacking either side of that money/time relationship.
Attacking the numerator? You have to find a way to get a raise or a new job offering more dollars.
While the amount you are paid is scalable, you quickly hit a wall where the scaling ends. Let’s face it, most businesses are not willing to pay you $800/hour.
Attacking the denominator? You have to work more.
That amount caps out at around 10-12 hours each day.
If you are paid a yearly salary, you can only work around 50-60 years before Father Time says “you’re done”.
My point is simple: time cannot scale if you are only paid when you are present.
Without leverage, any chance at retirement requires 40+ years of diligent saving/investing, some luck, and government assistance.
So what does leverage look like?
Leverage is when you are paid independently from the amount of time you spend working.
Those who are paid per project or per sale, have positive leverage.
You don’t have to be awake to sell something on the internet. All you need is a system built and ensure it is operating before you go to sleep.
Similarly, when you are paid per project, you decide how much time it takes you to complete the task.
YOU are in control of both ends of that money/time relationship.
With this type of leverage, your escape number becomes a lot more realistic.
Let me break down the numbers so it becomes crystal clear for you:
Say you need $3 million to never have to work again (this is not outrageous by any stretch).
If you make $25/hour after tax, that is 120,000 hours or 57 years required to make that much money.
Factor in living expenses and you won’t even have $1 million left over by the time you get there.
However, what if your project based gig or online business makes $250,000/year in profit?
You’ll hit $3 million in earnings within 12 years. Sounds a bit more manageable doesn’t it?
If you are happy working until you can’t and then depending upon the government, then you are just as successful as any other happy human.
However, if you are like me and would be miserable living that life, you’re going to need some leverage.
When you are ready, there are two different ways I can help you:
If you are interested in starting an efficient one-person online business, I recommend starting with one of the following:
Textbook Flipping Mastery - My in-depth guide on how to start an all online, high-margin Amazon e-commerce business.
The Conference Room - My private mentorship community, which includes all of my paid guides for free. Pay once and stay a member for life.
You can become a paid subscriber here (7-day free trial available) and follow along with my personal LEGO investment portfolio here on Substack.
Outstanding post! When you calculate it by hours needed trading time for money, it really is ridiculous lol. Thanks for all you do