For the longest time, I was taught by my family to go to school and go to college and get a good job as an employee for a stable employer. "Be a doctor," they said. "Be a lawyer," they said. "Get one with a good benefits and retirement plan," they demanded. My grandmother was so adamant that I went to a good university, that my graduation from the University of California, Santa Barbara outweighed all of my other accomplishments that I considered to be much greater than getting my getting a degree.
What's the fixation on going to college, getting a degree and getting a stable job? Personally, I think that it is an old-school mentality based upon fear. The second tier on Maslow's Hierarchy of needs deals with a human being's inherent need for safety and security. In our caveman days, security was finding a cave that would keep out the saber-toothed tigers. Today, it means financial security. You see, back in my Grandma's days, there was very little financial security. In her lifetime she has seen five U.S. wars, been wrongful 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 "Black Monday" stock market crash of 1987. Empathizing with her life, I can see how she would value high education and a stable job because anything else would be too unstable in her mind. I got my degree and made her happy, but I had no desire to trade my time for money and have another person be in control of my freedom as well as the amount of money that I could make.
Myth: Formal Education will Lead to Higher Financial Success
I coasted through college without any intensive study or desire to study. In fact, I was a horrible student in terms of study habits. I credit my finishing college only to my innate ability to pick the right multiple-choice answers based upon deductive reasoning and my love of writing research papers. All the while 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 top-notch education, but I went through my college education with perhaps only three classes that really provided me with some good useful information.
Like many college graduates discover, I found out that when you get out of college, you enter the business world that cares little about education and wants marketable trade-specific skills. So there I was with my diploma in hand, finding out that I was no better off than a high-school graduate. In fact, I was at a disadvantage from 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 prized by employers. I felt kind of swindled because all my life I was told, graduate from college and the money will be there.
The truth might hurt, but the record must be set straight and that is that in this day and age employee's with a four-year degree are a dime a dozen. As an employer now myself, I can say that a four-year education tells me that you can read and write well, but little more than that. What I look for is experience and practical knowledge. I'm not saying that a four-year education is worthless, but that it's weight on the career negotiating table is not as heavy as it once was. Let me put it another way: Going to college will make you a good employee, but it does not guarantee wealth.
The Employee Salary Trap
Getting a corporate salary is the biggest hindrance to wealth building if you are choosing that as your sole vehicle for wealth. That's because for most of us, our salary is fixed by our employers and any and all raises are dictated by our employers. In short, we won't get rich unless our employer says we can. Unfortunately, I haven't met a single employer in my time who has decided to make their employee rich. Being on salary is stable and people like being stable, but in order to develop a millionaire-mindset, you must get away from looking at your salary as the only means of income around. Being a salaried employee is not a bad thing at all. You can use the experience to learn and acquire new skills and have a stable stream of income to pay the bills. I'm just saying that you should not rely on your salary exclusively if you intend to become rich because at best, your employer will only allow you to make a decent living, not to become rich.
Self-Employed Versus Business-Owner
Private practice doctors, lawyers, and all other similar high-paying service professions make a decent living, but they aren't what I consider rich by their professions alone. That is because even though their per-hour salary is higher than the average, their wealth framework is still the same as the gardener making only $8.00 per 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. Granted these professionals have broken free from the corporate dictatorship, but they have another problem that they face--Stop working equals no income. That means if these individuals are out sick, or on a vacation, or get injured, then all their source of income dries up because they can't trade their time for money. This puts a tremendous amount of pressure on these individuals to stay busy, which is in part why I think lawyers are the most jittery people I know. That leads me to this point: being self-employed means you are trading time for money while being a business-owner means you are using the power of leverage.
What's Leverage?
Business-owners are the wealthiest people on this 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 dollars at the time of this writing. 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 from their one hour of time than do the self-employed or the employees. In Gates' instance, he developed a computer operating system which he licensed out. He put effort into creating one product that delivered a lot of value to its buyers and he profited immensely from that.
But you don't have to write software to become rich like Bill Gates. People who purchase real estate work off the same passive income model. People who invest do the same. In the service arena, smart service professionals start contracting others to provide the actual services and take a cut on the profit, thereby creating value for both the service provider and the customer. That is leveraging services.
Business-owners look for multiple streams of income. Employees believe that they have a level of security in their job, but a surprise layoff or getting fired could end that security as fast as it was obtained. Worst yet, the employee has nothing more than unemployment benefits to work off of. A business-owner might lose one of his streams of income, but still has others to work off of. This is what I think of as safety--having multiple streams of income.
Take a Risk
In my Personal Development sessions, I advise people to face their fears head on because in taking on that challenge, it causes them to grow, both personally and professionally. Entrepreneurs and employees both have to deal with failures, but smart entrepreneurs are not afraid to take that risk, knowing that it will bring them one step closer to success. Be willing to try new ideas and to step out of the box. Look for additional ways you can make money and don't just talk about it--DO IT. That's one of the most powerful concepts that makes people millionaires--the ability to act.
Key Points
While this article only briefly talks about the millionaire-mindset, take with you these key points:
* All of us have the same amount of time during the day and we can only sell so much of our time.
* If you trade your time for money, the best you will do is earn a decent living. You won't get rich by this model.
* Find ways of leveraging what you do to get more out of your time and hence more money.
* Create passive income by way of products, software, or investment vehicles that produce a positive cash flow to create multiple streams of income.
* Don't wait for the perfect time because it will never happen. Act now, even if your plan is not perfect.
If you looking something you want to create a passive income please don’t hesitate to call me :
Fauziah Mahfodz 019 745 0580 or email me fauziahmahfodz@gmail.com
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