As a working teenager, the number that I thought about when getting a job was how much money I was going to make an hour. I remember working at McDonald’s for $3.50 an hour, then as a busboy for $4.25 an hour. I also remember hitting it big as a waiter where I made like $1.75 an hour plus cash tips. Wow…cash tips made me feel like I really hit it big. The key number I focused on was my hourly rate. The end goal, shared with me by adults in my family, was to make a salary. I was told that a salary was where you get money for a week’s worth of work whether you worked 40 hours a week or less. They said that is my target…to make “a salary.” With a salary I would be an adult and be successful, or so I was told.
Salary Is Another Word For Wages
What I wasn’t told was that another word for salary is wages. Wages are pretty much trading your time for money. I thought a salary was the goal, and the bigger the better. Not to mention that great perk that I would be paid my full salary even if I didn’t work the full 40 hours any given week. What I don’t remember hearing was that if I work over 40 hours a week, I get that same salary. Woah!!! Wait a minute!!! Something doesn’t seem right here. As I spoke with other adults in my life, they said, “well yeah. Now you have to get raises or an even better job to make your salary bigger.” So, that is what I did. I went to college, worked multiple jobs, and over the years my salary climbed to a really nice size salary. Now I was successful!!! But what did that cost me?
The Wrong Way Of Thinking
For most of my adult working life, I have worked 60-70 hours a week. I have sacrificed many of nights and weekends with my family, missing quite a bit of my personal life. Sure, I attended the big events…some soccer games, band concerts, and spelling bees, but I missed many, many of the small things. My wife was so use to me working to the wee hours of the morning that she just accepted it. I always thought if I work more hours and sacrifice, my salary will keep climbing, and for the most part it did. I was earning a good wage and so I thought, “I am successful.”
Another thought then occurred to me. What if I could make some money on the side, building software for companies? I could have my salary and have a side hustle increase my annual income, a.k.a. “earned wages.” So, I started my own company. I limited myself to 40 hours a week for the “day job”, and started working about 20-30 hours a week in my own business, writing web based software. My grand thought was that I was going to write some software that could be sold as a service and make some real money. For many years, I worked my day job and wrote that software program, while at the same time working an hourly rate for other software jobs I picked up through my own business. This went well. Again, my salary started to climb, mostly due to working my day job, plus hourly work at night. “Wow…now I am really successful.” But all the while, I was simply making wages…trading my time for money.
Rich Dad Poor Dad To Save The Day
Two years ago, I read a book by Robert Kiyosaki titled Rich Dad Poor Dad. It taught me about assets, liabilities and two different approaches to working. One approach was to build a skill set, get a job working for someone, and trade your time for money. The other approach was to work for yourself as an entrepreneur and either build something that will generate passive income or build a company where people work for me and profits are made by me from their time worked. That seemed pretty cool. I can invest time into building something that people can use that will make me money, or I could build a company that offers a service where I make money from employees or contractors working for the company. I like the sound of that!!!
The key take away is that I could establish a money making machine that will earn me passive income versus having to trade an hour of my time for an hourly rate. With the passive income, I could be on a beach in the Bahamas, sipping on margaritas, all while earning profits. Trading my time for money, I would only be paid for the time I put into the work each day…wages. “Alex, I’ll take ‘profits’ for the win!!!” And that is what I started to do.
…Be More Of Who I Am…
Since reading Rich Dad Poor Dad, I have read many books about business systems, being an entrepreneur, and building things that will make me profits. Then, while watching a YouTube video about improvement, my mentor Jim Rohn said, “wages will make you a living, profits will make you a fortune.” For some reason, this really resonated with me and lit a fire in me to make that fortune. With a fortune, I could provide for all of my family, including my extended family in need. I could give more to my church and make a bigger impact on the community. A fortune will allow me to be more of who I am…someone who loves giving. My goal went from having a good hourly rate as a kid, to earning a decent salary, to earning a fortune by building a profit engine that generates masses of passive income.
As of this moment, I do not have a fortune. I have only been at it for about two and a half years now. I am proud to say, however, that today I am working on a profit engine and it is maturing. I build subscription software services that generate passive monthly profits and currently have three developers under my employ who earn their hourly rate and generate profits for my company. They user my business systems, processes, and experience to make a decent living for themselves and help my company grow. This is a win/win situation.
There are many people in this world who are happy trading 40 hours a week for a salary, and there is nothing wrong with that approach, if that makes you happy. I still work well over 60 hours a week, but now I work solely for myself. I am building my business into a money making machine, whether I am working or on a beach in the Bahamas. My business will make me profits well into my retirement, without having to work to earn every dollar. I made a very good living trading my hours for wages, but I am building my fortune by focusing on profits. It is definitely easier to just work 40 hours a week and not carry the stress of running a business, but “wages will make you a living, profit will make you a fortune.” I choose fortune!!!