The job myth. You don’t need a well-paid job to be financially free. That may be a shocking truth for you to hear. We all have been taught at school and in our adult lives that the key to success is to have a well-paid job. And that the better the job, the bigger our income will be. The reality is the genuinely wealthy won’t get there by working for somebody else. They understand the only way to earn real wealth is either through a business venture that sells products and services that others want or by investing in assets that give them a dependable and increasing income over time, neither of which depends on them working for somebody else.
Yet, despite the fact school doesn’t teach us how to become an entrepreneur or investor. It teaches us valuable skills such as reading, writing, adding up, and pursuing other subjects of interest. Then, when we get on to tertiary education, we learn the professional skills we need to become doctors, engineers, lawyers, and vets.
But for many Australians, that’s where their education stops. They settle down to a job that allows them to pay next month’s mortgage. What’s more, when they leave uni, they may also have a large HECS debt, it’s not surprising that many have the debt weighing over their heads for years after uni, and despite having reasonably well-paid jobs, it may take them a long time to get ahead. So, it’s understandable they choose to reward themselves for being on this treadmill every week by taking holidays, buying nice cars, and the latest technology.
Of course, surrounding yourself with symbols of success and being admired and respected, even envied by friends and family, can make you feel good right now. But it doesn’t make you financially free, far from it. While some people manage to keep up this kind of lifestyle, the pressure is too much for many, eventually burning out. Even those who don’t burn out remain on the treadmill, and life never seems to get any easier. They’re expected to deliver more and more as they climb the corporate ladder. Deadlines get tighter, targets get tougher to meet, yet their effort and hard work often go without recognition, financial or otherwise. And even if they are earning good money, the more they earn, the more the taxman takes.
The sad reality is that the system that takes you from school to your career doesn’t make you financially free. At least at one time, there was job security to compensate for all this. Your parents and certainly your grandparents knew that they had jobs for life, which meant they could stay with the same company from when they left school to when they retired. For many people, there was never a need to look for another job. That’s no longer the case. Changes in the marketplace, new opportunities, the emergence of new competitors and continual technological advancements mean that what was a safe market yesterday is filled with uncertainty today. Unions used to offer workers some protection, but even they couldn’t turn back the economic tide.
Employees have to be ever more flexible in a global marketplace, as jobs are outsourced offshore to places where labour is much cheaper. Just being good at your job isn’t good enough anymore. After a while, some salary slaves start to realise that it isn’t the lifestyle for them. They look enviously at others who aren’t on a treadmill stuck in the rat race. They seem to have all the money they need without having to get up every morning to sit in a traffic jam on the way to and from work. They have time for their families and can pursue their interests as and when they want. These are people in control of their life. There’s no need to envy them. You can be one of them. When you set up your own business or become a property investor, you take control of your life. You’re the one in charge. The person who gets to call the shots can decide the future.
What’s more, the power of the internet and technological advances mean that it’s increasingly easier and cheaper to set up in business. There’s probably never been a better time to start your business venture. And it doesn’t matter what it is because businesses are increasingly focusing on niche markets, where highly targeted products are greeted enthusiastically by people with a genuine interest in what you’ve got to offer. And if you didn’t do too well at school or college, don’t worry.
Many of those who are the most successful in business dropped out of school or university to pursue their business dreams, including the super-wealthy like Microsoft’s Bill Gates, Virgin Industry’s Richard Branson, or Dell Computers’ Michael Dell. And ironically, it’s the brightest students at school and college who now compete for a job with them. But if you want to follow in their footsteps, you need to do one thing: take action to change your life. Start doing the things that will move you from where you are to where you need to be. You will have to learn to think and behave in the same way as those who have money. And by doing so, you’ll discover your own ability to create wealth and make yourself financially independent.
The first task you must set yourself is to become financially intelligent by understanding how to make money rather than spend it. But knowing the difference between things that make money and things that take money is something that most people don’t understand. They use their monthly salary or weekly wage to buy the latest in consumer goods, new clothes, or even holidays or cars, all things that take money without giving any back. This makes people feel good in the short term. But once the money is spent this way, it’s simply gone.
On the other hand, the wealthy’s priority is to acquire assets that will generate income, and it is this income, which they then used to buy the things they want, so they get the best of both worlds. They have the things they want but haven’t used up their money in the process, and it can keep earning for them in the future. As an investor, don’t forget that you will also benefit from the compound interest generated by the money you reinvest.