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
Index Funds Are Under Attack
What’s up, Graham? It’s guys here, so I hope you’re sitting down for this because we got a lot to talk about today. First of all, it looks like the IRS has been listening to an awful lot of Sting lately because it’s apparent that they took inspiration fro…
15 Ways To Boost Your Brain Power
When you’re young, you want to be the smartest kid in class. When you grow up, you want to be the best performer at your job or in business. And when you’re old, you surely want to be a source of wisdom for the new generations. If that’s your goal, you’d …
What Is ZIRP And How Did It Poison Startups?
Uhoh, one of the sinkholes, so to speak, that the money could go into is the asset class known as venture capital. And sinkhole it is. [Music] All right. This is Dalton plus Michael, and today we’re going to talk about what is ZERP and why did it mess w…
Never Ending Problems (Solution for Life)
We recently went through a series of unfortunate events that got us extremely annoyed. By the way, when we say “us,” we usually mean some of us from the team or all of us. In this case, it was some of us. But the point is, none of these events, taken indi…
Making conclusions in a test about a proportion | AP Statistics | Khan Academy
A public opinion survey investigated whether a majority, more than 50 percent, of adults supported a tax increase to help fund the local school system. A random sample of 200 adults showed that 113 of those sampled supported the tax increase. Researchers …
Indoor air pollutants| Atmospheric pollution| AP Environmental science| Khan Academy
Let’s talk about indoor air pollution. I remember when I first heard about indoor air pollution in my AP Environmental Science class, I was a little confused. When I used to think of pollution, I would think of images like this or this. But pollution is o…