In the best-selling book titled “Your Money Or Your Life”
by Joe Dominguez and Vicki Robin, I learned a very important way to
think about money and our time. I’ve written about this before, but it
The book suggests that money equals life energy. We can apply this idea in many ways. The two most important ways are around making money AND spending money.
1. Most people trade their time (limited life energy) for money.
2. Most people spend their money (limited life energy) on stupid stuff that doesn’t really make their lives better.
means people literally trade away their precious lives for UNimportant
things. This is horrifying when you think about how short life really
For the average person, their time is their single most important income-producing asset.
is because the only way they’ll receive ANY income is by selling
(renting) their time. This includes all employees, all salespeople and
most small business owners.
Your time should NOT be your most important income-producing asset.
Your TIME should NOT be connected, in any way, to the amount of monthly income you receive.
You should use your time (life energy) to buy and/or create income-producing assets.
that do not require a great deal of your time. Yes, I’m a broken record
about this! The reason why is because it’s so easy to fall into the
“trade time for money game.” I catch myself doing it all the time.
In 2018, I attended a multi-day real estate investing seminar, and one of the speakers shared how she had rolled their 401k retirement account into a self-directed IRA account. She then used the money in their self-directed IRA to buy a foreclosure. She had the home renovated and sold it for an attractive tax-free profit. After this first property, she’s done several similar transactions in her IRA.
is obviously an awesome strategy; however, she keeps selling the
income-producing asset turning this opportunity into a J-O-B. 🙁
The majority of people attending this seminar got excited by her strategy. The problem is that it doesn’t create consistent recurring income. To me, this plan does NOT value our life energy.
I’d much rather create 1,000 of recurring monthly income for life than make 20k flipping one home.
As Cashflownaires, we should try to avoid any opportunity requiring us to trade our time for money. This means we should try and avoid:
- Home flipping.
- A business requiring your labor for income. Think carptenter, plumber, electrician, painters, etc.
- Commission sales positions.
- Every job, regardless of the pay.
Understand this is NOT easy.
Everyone around you is programed to chase these things.
this same real estate investing seminar, I had an interesting talk with
a guy who buys and sells mortgage notes. I told him that I owned
several notes on mobile homes that I had sold with financing. His eyes
lit up when he said, “You should sell those babies and cash out of them!”
I replied asking, “What would I do with the money I made selling the notes???”
He said, “Go do more deals!”
particular investor was very smart and seems to very successful buying
and selling notes, but the reality is that he has j-o-b. He’s chasing
one check per deal.
What happens when he stops doing deals?
allow yourself to pursue opportunities that provide residual benefits.
Kind of like “friends with benefits,” but much better! 🙂
If you haven’t read “Your Money or Your Life,” try to find the original version from the early 1990s. I think it’s better than the updated versions of this book.
I also recommend the audio seminar by Joe Dominguez titled “Transforming Your Relationship With Money.” You can find it on Amazon or Audible.
P.S. Back in June, I shared my 3-step system for solving money problems. You can find it here. Be warned, you will probably won’t initially agree with what I share in this little System.
However, if you “think” about what I share a little more, you may realize that I’m on to something!