Recently, I read an article where a billionaire CEO suggested that his company’s employees should have a 3-day work week. At first I thought “oh, this is great!” Then, I quickly remembered that because employees tend to think differently than a business owner, there must be a catch. And of course, the catch is the employees have to work extended days and delay retirement until they are 70.
Knowing what I know about active, leveraged, and passive income, I thought this guy must be nuts!
I had to remember that I think like a business owner more so than an employee and I know how to gauge a financial opportunity based on how much time it frees up for me. I can always make more money, but I can never get more time. Once time is gone, there is no getting it back.
Most professional women make money in the form of active income. They trade their time, 40 hours a week or more, for a paycheck.
But if our financial freedom goal is to free up our time, then we have to figure out how to trade less than 40 hours a week for the same paycheck amount.
If I work less than 40 hours a week for the same paycheck amount, then I have to charge a higher hourly rate for my time. There are many ways to develop leveraged income: you can become a consultant where your hourly rate well exceeds your rate as an employee. Is there risk along with this decision? Of course! But then again, since when is your job as an employee guaranteed? The job where you work for the same company for 40 years and retire with a pension is long gone in most cases.
Now the ultimate is trading 0 hours for a paycheck. When you’ve discovered a way to do this, you’re now making passive income. Can you imagine being paid by a business you own while you’re out on vacation with your family? For me, the stock market has become that tool. But there are other ways to make passive income: own a parking lot, or a vending machine, or an affiliate website.
All the best to you on your financial journey!
Aneshia
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