yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

You Won't Get Rich Renting Out Your Time


4m read
·Nov 3, 2024

Next, you go into more specific details on how you can actually get rich and how you can't get rich. The first point was about how you're not going to get rich. You're not going to get rich renting off your time. You must own equity, a piece of a business, to gain your financial freedom. This is probably one of the absolute most important points. People seem to think that you can create wealth and make money through work, and it's probably not going to work.

There are many reasons for that, but the most basic is just that your inputs are very closely tied to your outputs in almost any salary job. Even one that's paying a lot, for example, like a lawyer or a doctor, you're still putting in the hours, and every hour you get paid. So what that means is when you're sleeping, you're not earning. When you're retired, you're not earning. When you're on vacation, you're not earning.

You can't earn nonlinearly. If you look at you and doctors that get rich, like really rich, it's because they open a business. They open a private practice, and that private practice builds a brand, and that brand attracts people. Or they build some kind of medical device, or a procedure, or a process where they've intellectual property. So essentially, you're working for somebody else, and that person is taking on the risk, has the accountability, and the intellectual property and the brand.

So they're just not going to pay you enough. They're going to pay you the bare minimum that they have to to get you to go to a job. And that can be a high bare minimum, but it's still not going to be true wealth where you're retired. Finally, you're actually just not even creating that much original for society. Like I said, this tweet's term should have been called "how to create wealth." It's just "how to get rich," with a more catchy title, but you're not creating new things for society.

You're just doing things over and over, and you're essentially replaceable because you're now doing a set role. Most set roles can be taught. If they can be taught, like in a school, then eventually you'll be competing with someone who's got more recent knowledge, who's been taught, and is coming in to replace you. You're much more likely to be doing a job that can be eventually replaced by a robot or by an AI.

It doesn't have to be a wholesale replacement overnight. They can replace a little bit at a time, and that kind of eats into your wealth creation and, therefore, your earning capability. So fundamentally, your inputs are matched to your outputs. You are replaceable, and you're not being clear. I just don't think that that is the way you can truly make money.

So everybody who really makes money at some point owns a piece of a product or a business or some kind of IP. That can be through stock options. If you can be working in a tech company, that's a fine way to start, but usually, the real wealth is created by starting your own companies or by, you know, even investors. They're in an investment firm and they're buying equity.

So these are much more the routes to wealth. It doesn't come from the hours. You really just want a job or a career or profession where your inputs don't matter as much as your outputs. If you look at modern society, given too little in the tweet storm, businesses that have high creativity and high leverage tend to be ones where you could do an hour of work and it can have a huge effect, or you can do a thousand hours of work and can have no effect.

For example, look at software engineering. One great engineer can, for example, create Bitcoin and create billions of dollars worth of value. An engineer who's working on the wrong thing, or not quite as good, or just not as creative or thoughtful or whatever, can work for an entire year, and every piece of code they ship ends up not getting used. Customers don't want it. That is an example of a profession where the input and the outputs are highly disconnected.

It's not based on the number of hours that you put in. Whereas on the extreme other end, if you're a lumberjack, even the best lumberjack in the world, assuming they're not working with tools, the inputs and outputs are really connected. I'm just using an ax or a saw. Yeah, the best lumberjack in the world may be like 3x better than one of the worst lumberjacks, right? It's not going to be a gigantic difference.

So you want to look for professions and careers where the inputs and the outputs are highly disconnected. This is another way of saying that you want to look for things that are leveraged. By leverage, I don't mean financial leverage alone, like Wall Street uses, and that has a bad name. I'm just talking about tools.

We're using tools. A computer is a tool that software engineers use. If I'm a lumberjack with bulldozers and automatic robot axes and saws, I'm going to be using tools and have more leverage than someone who's just using his bare hands and trying to rip the trees out by their roots. Tools and leverage are what create this disconnection between inputs and outputs.

Creativity. So the higher the creativity component of a profession, the more likely it is to have this disconnect between the inputs and outputs. So I think that if you're looking at professions where your inputs and your outputs are highly connected, it's going to be very, very, very hard to create wealth and make wealth for yourself in that process.

More Articles

View All
JEFF VS. ADAM: Nerd Wars!
It’s a nerd force! Oh good, what style are we doing it now? Alright, so welcome to Nerds War. There’s a very special Nerds War. We didn’t prep because I sliced my finger—[ __ ] oh um, so we’re doing a Nerds War extreme! Adam vs. Jeff! Said, I’m playing A…
Molecular geometry (VSEPR theory) | Chemistry | Khan Academy
A molecule of carbon dioxide is pretty much straight, whereas a molecule of water is bent. Why the difference? More importantly, is there a way to predict what the shape looks like in three dimensions of any molecule? The answer is yes, by using a theory …
Solving equations and inequalities through substitution example 3
Joey is training for a hot dog eating contest. The person who eats the most hot dogs in 10 minutes is the winner. If r is the number of hot dogs that Joey can eat in a minute and n is the total number of hot dogs he eats in the contest, we can write the f…
The Search for History’s Lost Slave Ships | Podcast | Overheard at National Geographic
When you dive, it’s a completely different world. The first time I ever saw a National Geographic explorer and storytelling fellow, Tara Roberts, wasn’t at headquarters; it was on YouTube last year. Tara was in a Nacho video about a group of Black scuba d…
Varnas and the Caste System | World History | Khan Academy
In any textbook overview of Hinduism, you will quickly encounter the caste system. The caste system is this notion that people are born into the roles that they have to play in society. Now, the reason why I put this in quotes is because they are associat…
15 Skills That Pay Off Forever
The skills that we’re talking about here today have the largest impact on both your personal and professional life. They stick with you for your entire life and will continuously improve the quality of your existence. Most of them are a bit difficult to m…