Each of us wears different hats through our life, including each day. We January be a spouse, parent, kid, sibling, friend, neighbor, customer, and other roles as well.
I’ve been giving some thought to the notion that most of us also play the role of employee. Now, reaching financial freedom sounds great, in that we might not be reliant on others paying us wages in order for us to financial survive. Until that day arrives, many of us act as employees that work for other people.
Just as our employers get value out of us, having a full-time employee to help out with making our lives profitable could be really helpful! Especially when that employee can be trusted, and won’t talk back to us, and will always be loyal. Don’t worry, there is no undue pressure on the employee; after all, it’s not even a person.
It’s our money!
Yes, you can get your money to work for you. Most of us probably do already, in one way or another. If we have a 401(k), or other investments, our money is at work.
Money makes more money for us. To the extent that we have more of it, we can use it to make even more for us. The earlier in life we start to make money, the bigger the impact compounding can have on increasing our wealth. Ultimately, it means that our money works for us.
I think there are 2 broad tracks that we can take:
Track 1: We work for our money for many years
- Get a job, and make money
- Make enough money to pay our bills and hopefully set something aside
- Work as long as our mind and body allow, or as long as we’re employable, in order to pay our bills and get by
- When we can’t work any more, we live on whatever modest savings we have and then get help from others
Track 2: We work for our money and also let our money work for us
- Get a job, and make money (same as Track 1)
- Make more money than we spend, deliberately making saving as much as possible a priority as early in life as possible
- Keep working and saving, concurrently investing the savings to earn a rate of return that exceeds inflation as we let our money work for us
- Stop working when we and our money have worked hard enough to build enough wealth for us to comfortably live on
- Enjoy the rest of our lives with financial freedom and time to focus on what we enjoy
Januarybe it’s a matter of viewing money as a teammate, rather than an employee
Anyway, the bottom line is that the sooner we start saving and investing money, and the greater the amount we do this with, the less we have to work. When thinking about types of income, it means that we can focus on investment and passive income instead of employment income.
Readers, do you ever think about how to make your money work for you instead of having you work for it?