How many times has someone told you “Time is Money”? Well, surely this quote has lasted several hundred years after Benjamin Franklin because it illustrates something truly profound.
To the layman, time is a finite resource and based on economics any (relatively) finite resource is extremely valuable. So thus, we rationalise that time is money.
To be truly financially independent we must approach this statement in a very different way. To fast track your financial independence you must work on improving three different areas in your personal life.
- Earn more
- Spend less
- Invest the difference
Can you still guess where this conversation is taking us? Earn More
If time is limited; then every time you waste time; you forego an opportunity to earn more money (opportunity cost).
As such all our life our parents, teachers and our educations system has been prompting us to take up high paying jobs to earn the most we can (to earn the most we can using the finite number of hours we have). However, no matter how good we are at a profession (lawyer, doctor, engineer etc.) our earning capacity is always limited by the number of hours we have. No matter how much money we make we always upgrade our lifestyle (Bigger car, bigger house, branded clothes or fancier vacation=lifestyle creep) and have very little savings.
The ultrarich and successful have approached time in a different way and have understood the limitation of 24 hours in their earning capacity.
The truly intelligent and affluent have realized this long ago and have devised methods to keep their earnings independent from their personal time commitment. The moment you make your income independent from your personal time the opportunities are endless.
I have listed below three of the most common paths available for Sri Lankans to earn more.
1.The Pettah pavement (YOLO)
This means living pay cheque to pay cheque and live for the day as tomorrow is not guaranteed, I mean come on You Only Live Once?
The level income does not denote if you are in the Pettah pavement (there can be movie stars, athletes and guys selling ground nuts at train stations). They get paid by the hour but spend it all before the next paycheque.
The only way out of the side walk is winning a lottery ticket ( even if they do they will back on it again as they have poor financial discipline).
2.Galle road in the rush hour (Slow lane)
People in the slow lane does not spend more than they earn and always tries to invest at least a minimum of 10% every month. Slow lane also trades time for money (That means they do a 9-5 to earn their income). If you stick to the slow lane and diligently invest, you will reap benefits over the long run (being financially independent in 20 odd years)
3.Southern highway (Fast lane)
People in the fast lane don’t own stocks, they sell stocks of the company. They don’t work for companies, they create companies. They don’t work 24 hours on their business, they hire people to do the work they envision. The Fastlane is focused more on producing and less on consuming (Production not consumption).
They have patent rights, earn royalties, own massive rental properties or commercial buildings which derive rental income independent from their own time.
To be financial independent (and to do that very quickly) everyone must work in the slow lane initially to raise the capital. What you do with the savings denote how quickly you move into the fast lane and how quickly you become financially independent.
Next time you think of a side hustle to make that extra dough on the side, see if you can scale it independent of your time.
Enjoy what you do and don’t live for the weekend.