rich people buy time poor people sell time how many times have you heard some variation of this
phrase don't sell your time for money well you're exchanging your time for money and what does that
mean in your time for money is a sucker's bet I don't want to work anymore I can't trade my
dollars and hours our country wasn't founded on this concept of trading time I I look at
it as if if you're trading your time for money you're always going to be limited to how much
money you can make this is a finance bro way of saying don't make money exclusively from a
source where you get paid x amount of dollars for why amount of work which is basically every job
there are various reasons given for why selling your time for money is a bad idea like you only
have so many hours in a day you can work so a training your time for money limits your
potential income B trading your time for money also makes you more financially vulnerable if
you are unable to work and see it's really hard to sell a course on trading your time for money
unless you're a college although maybe don't say that last one out loud the alternative to trading
your time for money is usually investing starting a business living a wildly alternative lifestyle
or some combination of all three of these things but I am here to tell you that while this very
broad phrase might have some Merit in specific situations it's probably very much complete [ __ ]
and you really shouldn't take anybody who says it too seriously at best the phrase don't sell your
time for money is just another example of hustle Bros needlessly bashing on regular day jobs that
provide stable living to a majority of Americans it also perpetuates the idea that simply working
a full-time job is not good enough and that a side hustle or whole extra business is mandatory to get
ahead these days they might not be wrong but we will get to that later most importantly the
thinking behind the line of don't sell your time for money is just wrong without being a trust fund
baby there really is no way to reliably make money without investing some time and more importantly
trading your time for money can be a genuinely great way to build wealth so as long as you're
doing it correctly so it's time to learn how money Works to find out why you should absolutely sell
money is by working at a job the transaction of dollars per hour is very easy to see because it
will be included in the employment contract and regular paychecks it's a problem well the person
at Starbucks gets paid by the hour the person at the gas station gets paid by the hour but guess
what most doctors and lawyers also get paid by the hour an employer will buy an hour of time
from an employee for a predetermined amount of money this amount could be anything from
minimum wage to hundreds of dollars an hour for highly skilled and very senior employees another
increasingly popular way that people are selling their time for money is through gig work which
isn't as clear-cut as x amount of dollars for y amount of hours which means there's a chance
for workers to take home less than the minimum wage for the hours they put in but exploitive or
not gig work is just another way of selling time for money the gig economy could be a much better
option for everybody if we untied the protections and benefits that we have created to support this
full-time job cool great I'm pretty sure you all know how jobs work so why am I telling you about
this in such basic detail well because jobs are not the only way that we sell our time for
money sorry about that people will often spend hours clipping coupons avoiding toll roads and
spending their weekends trying to sell used junk from around their house to make a few extra bucks
without realizing that the time they spent doing this was worth a lot more than the money they made
or saved if they were doing this to have more money in their pocket at the end of the month
then they would have been better off picking up a few extra hours at work I get it some people
work fixed schedules and don't have the option to pick up more work on a whim but we have already
seen that gig work has exploded in popularity so that could offer an alternative if you're a high
income earner gig work might struggle to match your regular income but then clipping coupons is
likely to put you even further behind and so will most other activities for that matter amongst the
initial professionals there is a type of investor called the sophisticated idiot a sophisticated or
accredited investor is someone who has more than a million dollars in assets outside of their primary
residence or earns more than two hundred thousand dollars a year American Financial Regulators have
decided that people making this kind of money are smart enough to have enough initial security to
make riskier less regulated Investments medical professionals like doctors and dentists fall into
this sophisticated idiot category all the time because they frequently make big Investments that
take up a lot of their time a dentist developing an apartment complex might be able to make a lot
of money but Investments like this can take hours of planning and oversight even if they
are successful they often walk away with less money than had they just taken on a few more
cases and stayed in the operating room doctors and dentists are very smart people but because
they don't think they're selling their time for money they often undervalue the money they could
have made if they weren't trying to make passive income now if you love flipping properties selling
stuff on Craigslist or seeing how much money you can save at Walmart with your coupons then by
all means go ahead but just remember if you are only doing this to save money then you are just
selling your time for money in a different way and probably not getting a great price for it in the
process what do you want from me man people not realizing that they are always going to be selling
their time for money also make the exact opposite mistake to this they've overvalued their time
there are things you could do right now that would only take an hour and would save you a lot
more money than you would make in an hour at work renegotiating Insurance utilities and mortgages
canceling subscriptions you never use anymore or applying for a new credit card with a sweet sign
up bonus all of these will take a bit of time but we'll put much more money back into your pocket
than doing an extra hour in the office because you waste time on things that never pay you
this segues us nicely into the next reason why you should sell your time for money it's going to be
a better way to invest for a lot of young people there are investments that are more passive than
others for example if the doctor would have just used their money to buy a bunch of dividend stocks
then it would have likely only taken them a few hours to do some research and make the purchase
trades to get a well-balanced portfolio that will pay them for decades to come if a dentist could
earn a thousand dollars an hour while practicing and it took them five hours to consult with a
financial planner that charged them another thousand dollars on how to structure a million
dollar stock portfolio then the dentist would need to make up six thousand dollars for this to have
been a good use of their time a million dollar portfolio should return between fifty thousand
and a hundred thousand dollars per year over the long term so it would take roughly a month for the
dentist to get ahead on this investment this was a good way for the dentist to sell their time for
money and that's using very generous figures for how much that dentist could make at their practice
but the math doesn't work like this for most people most people earn much less but also have
less to invest a regular professional making 15 an hour with a thousand dollars to invest
really shouldn't overthink things even if they make phenomenal returns of a hundred percent per
year by day trading using techniques they picked up from some totally legit guy on the internet
that's still only a thousand dollars a year and before you start talking about compounding returns
in the comment section may I remind you that the greatest hedge fund of all time only made sixty
percent annualized returns before fees so if you really think some random guy is going to make a
hundred percent annualized returns after watching a tutorial from some random guy on the internet
then I have truly failed to teach you how money Works anyway the problem is that because working
for money gets such a bad rap and passive income is continuously held up as the Holy Grail of
financial success a lot of people choose to make small Investments with money that would have been
way better spent increasing their earnings power a thousand dollars can pay for qualifications to
do a lot of jobs that pay significantly more than minimum wage now I'm not talking about
online courses or college degrees I am talking about real work qualifications to do work that
requires specialized training if you have some technical skill a coding boot camp can get you
an entry-level job as a software engineer it might not be Google but you could still be earning a lot
more than minimum wage plus the passive income from a thousand dollar stock portfolio working
on acquiring qualifications and marketable skills is not as sexy to most people as picking the next
Tesla but it's a much more reliable way to make money and hey once you are selling your time for
more money you can use that extra money to work on building passive income but maybe you want
to speed up this process by starting your own business well then understanding that you are
always selling your time for money is going to be even more important in my career as an investment
banker I've been lucky enough to talk with a lot of successful company Founders about what made
their business work starting a business is always going to take a lot of time and energy and as an
early founder you will need to accept that you are going to basically be doing everything from a sexy
stuff like product design and Mark marketing to the boring stuff like accounting as a business
grows a big mistake that a lot of business owners make is either trying to continue to do everything
themselves or delegating away everything but the fun stuff a business can only get so large before
it can no longer be operated by a single person and letting go of something that you control can
be hard the finance gurus are absolutely right when they say that you need to leverage other
people's time and experience to scale a business but this isn't the excuse to forego the boring
stuff either if a business owner has a background in design and no experience at all in business
management then they should hire a business manager to delegate the day-to-day operations
of the business to them because their time is better spent designing new products similarly if
a business owner has a decade of experience as an operations executive and no experience whatsoever
as a designer they should hire a designer and delegate that work to them even if they think
they would have more fun thinking of cool new products understanding that you are always selling
your time for money will really help you if you decide to go into business for yourself self
because it will always remind you to stick to the tasks where you are worth the most and delegate
the tasks that you can't do to a professional standard even if you really want to despite the
few stories of College Dropout starting billion dollar companies the average age of a billion
dollar founder is 47 years old and that's because they spent decades in a career that gave them
skills which meant they could leverage their time to build a company worth a billion dollars [Music]
so if selling your time for money is not such a bad plan then why does every personal finance
bro on the internet [ __ ] on it so much even the infallible Warren Buffett has been quoted
saying that if you don't make money while you sleep you will never be wealthy damn so are all
of these guys wrong well not really but they aren't getting to the point I think they're
trying to get across very well and they are definitely reading Their audience all wrong
let's start with Warren Buffett I struggled to find an instance of him actually saying this quote
so it's entirely possible that someone falsely credited him with this line and everybody else
on the internet just went with it but that doesn't matter he has definitely said some
similar things at one of his many talks anyway he is totally correct wealthy people should have
passive Investments that make the money while they sleep but that doesn't mean that the best way they
become wealthy is by focusing on those Investments it's a classic rich people eat caviar but eating
caviar won't make you rich scenario when Buffett gives his speeches he's normally talking to rooms
of Berkshire investors or people that could afford to attend an event that Buffett was speaking at
they are by and large already selling their time for lots of money so passive investing is the
next step nobody is reasonably choosing between a quarter million dollar investment in Berkshire and
a course that can make them an extra 20 an hour now as for all the other Financial influencers on
the internet at least 50 percent of them are just saying that earned income is trash and passive
income is the bomb because they want to sell you a course on how to make passive income I don't
think anybody should be surprised by scams and dubious claims on the internet anymore but what
about the other 50 percent the other fifty percent of people making personal finance content really
are trying to do their best but Financial content given to a general audience can only be so good
because well it's general advice invest into a portfolio that will make you passive income is
not bad advice and yeah eventually if you want to retire you will need most of your money to
come from a source that requires very little time input the problem is that broad statements like
this perpetuate the idea that making money one way is inherently good and making money another way
is bad this good advice makes no considerations for someone's age qualifications income existing
assets and liabilities obligations time Horizon and goals you shouldn't watch a Dr Mike video
instead of getting a checkup so you shouldn't watch a Graham Stefan video in lieu of making a
personalized plan for improving your own personal financial situations unfortunately not everybody
can make money for doing nothing the world does need people to work no matter what you do you
are always going to be selling your time for money it's up to you to make sure that you do
everything you can to make the hours in your day a highly sought after and marketable product but
speaking of Highly marketable products have you ever wondered why colonial empires were
so obsessed with Tea and Spice like they were willing to build navies and go and fight Wars
on the other side of the world for the Stop well you can find out why it was so special
money so hard for the money always something something money come on give me lots of honey