Edition 9 - Earning
I had a prelude to this edition which is about Earning in my prior edition of Lessons and Learnings. Please check out my archived Lessons and Learnings where you will find my earlier episodes about Family, Faith, Self-improvement, and Finances.
You might notice that I have posted several pictures of roads from my home farm area in North Central, KS. Roads can be an analogy to many things. As you travel on a road; Do you know where you are going? Is the road you are taking paved, straight and easy? Is the road you are on windy, bumpy, and difficult to navigate? Did you choose the road you are on or did someone tell you to take it?
The road you are on is likely based on some circumstances that might have been out of your control and choices you made. Choosing a road to take is difficult and often requires sacrifices, but in free countries like the USA, you have a lot of choices to choose which road you travel.
You might be on the road because someone told you to take it and you did not choose a different one. The road that you are traveling was the most convenient at the time. You are traveling on the road that you have a thousand times before, because you like familiarity. You are on the long road, willing to travel far to get further. You are the short road for quicker gratification. Maybe, you are on a road with a lot of other travelers. Maybe you are traveling where there is no road and you are paving your own way. The road you are on might be a dead end and you need to stop, turn around or even back your way out. The road you are on might have a fork in the road and you need to decide which direction to take next.
How do these analogies relate to Earning?
In my experience, earning money is a little like:
The road less traveled, is greater risk, but likely greater financial reward.
Being on the same road with everyone else, is more competitive, but it might be easier because it’s known and predictable.
The longer road likely leads to longer gains.
The shorter road might get you to a place, but not very far.
The dead end road, may have been a mistake in your life and career.
The bumpy road, is annoying; with perseverance you can overcome many things.
Sometimes the road you are on becomes dull and boring and you come to a place where you can choose a new direction. Choosing your own road, might be difficult at first, but you go further.
When it comes to earnings, whatever road you are on, I believe there is a combination of your circumstance and your choices. It’s important to choose the right road that adheres to your values and if you find yourself on the wrong road or dead end stop, turn-around, even back-up, and change directions.
All of roads eventually end, unless it’s a circle and you don’t go anywhere, so choose your road wisely.
Great Quotes about Earning and Investing:
A wise person should have money in their head, but not in their heart. - Jonathan Swift
An investment in knowledge pays the best interest. - Benjamin Franklin
Formal education will make you a living; self-education will make you a fortune. - Jim Rohn
Empty pockets never held anyone back. Only empty heads and empty hearts can do that. - Norman Vincent Peale
Everyday is a bank account, and time is our currency. No one is rich, no one is poor, we've got 24 hours each. - Christopher Rice
Money is a terrible master but an excellent servant. - P.T. Barnum
No wealth can ever make a bad man at peace with himself. - Plato
Hard work beats talent if talent doesn't work hard. - Tim Notke
Opportunity is missed by most people because it is dressed in overalls and looks like work. - Thomas Edison
Earning money
Dave Ramsey Solutions conducted the largest survey of millionaires ever with 10,000 participants. 79% of millionaires did not receive any inheritance at all from their parents or other family members. The top five careers for millionaires include engineer, accountant, teacher, management, and attorney.
Millionaires Go to College, but Not to Elite Schools
The National Study of Millionaires showed that it’s the degree itself that matters, not where the degree comes from. Almost two-thirds of millionaires (62%) graduated from public state schools, while only 8% went to a prestigious private school. But the bulk of millionaires did get that piece of paper.
Eighty-eight percent of millionaires graduated from college, compared to 38% of the general population. And over half (52%) of the millionaires in the study earned a master’s or doctoral degree, compared to 13% of the general population.
I believe successful earners, get an education and/or a unique skill set. Personally, I am a fan of 4-year college institutions. I think it teaches more than what is in the classroom. It teaches living together in a dorm/apt, likely also living on your own at times, balancing working (to earn money now) and classes (to earn money later), making your own choices in many areas of life, time management, and ability to try and learn different things with others.
Still, a 4-year institution might not be the best for everyone. In fact, what I point out as benefits of a 4-year institution could be accomplished in other ways too. Still, I believe you need to be able to prove to an employer and yourself that you can manage your life.
The next logical question is: What kind of salaries do wealthy people make? Not as much as you might think. The majority of millionaires in the Dave Ramsey survey didn’t have high-level, high-salary jobs.
In fact, only 15% of millionaires were in senior leadership roles, such as vice president or C-suite roles (CEO, CFO, COO, etc.). Ninety-three percent of millionaires said they got their wealth because they worked hard, not because they had big salaries.
In my opinion, those who earn more might often work in their own company, but they have taken more risks to do so. Those who change jobs from time to time, likely increase their salaries beyond staying at what job for a long time. Plus, changing jobs is also mentally challenging and can be financially rewarding too.
There is a pattern, the higher the risk, normally means the potential for greater reward.
I have found these characteristics amongst higher earners and the wealthy.
They work very hard.
They have a positive outlook – they take their passion with them.
They get along well with other people.
They hold themselves at a high standard and likely others around them at a high standard too.
They surround themselves with good people who work hard and are financially successful.
They treat all people with respect, but they don’t agree with all people – they decide on and make their own decisions.
They usually have a supportive spouse/partner.
They make sound decisions based on facts and some intuition, but mainly the facts. They tend to have a good skill-set in analyzing situations and make good decisions. Thus, they keep the money they have earned and if they happen to lose money, they work very hard to get it back by following a similar recipe that got them money in the first place.
This means you can make a mistake, but you must recognize it, stop doing it, and do more of the things that earned you money and less of the things that cost you money.
Perception Versus Reality
Overall, Dave Ramsey’s The National Study of Millionaires showed a dramatic difference between how Americans think wealthy people get their money and how they actually earn and spend their money.
The majority of the millionaires in the study said they earned their money through long-term investing. When it comes to spending, millionaires used a common tool for saving money: a shopping list. According to responses, 85% of participants in The National Study of Millionaires rely on a grocery list to some degree.
Whether big or small, we all have choices about how we earn and spend our money.
Some of my other learnings over time are:
Find the right employer (they have resources, they want to grow, and care about those who work there).
Find the right people (honest, hard-working, cares about other people).
The golden rule is very important - treat people how you want to be treated.
If you can build your company, with your people, do it.
Have a side hustle that you like and makes money. Things like storage units, rental homes in your same town, golf simulators, laundry mats, teaching/coaching on the side, real estate, website development, and lawn care.
Stay away from earning potentials that look and sound fun, but in my experience yield poorly. Of course, there is an exception to every rule, this is just my experiences of some “law of averages” where my observation would indicate these are tougher ways to start and earn money. Think hard before investing in:
Restaurants
Bars
Jobs that you pay some type of fee to start working – like paying $1,000 dollars to take a ½ day class to learn how to invest to make millions or you buy $3000 of products/inventory that you are supposed to sell.
Stay away from jobs that might have an appearance of a type of pyramid scheme, meaning you have layers of people making money on what the other does.
In summary, some of those jobs that might feel a little more dull, like being a teacher, engineer, health professional, accountant, and attorney but often require a higher education, which also means it’s a longer road to a better outcome.
Some last pieces of advice:
You might need to change companies from time to time to get more significant bumps in pay that can make a BIG difference over time.
Start early. Save early. Take some risks, early, because later you will find that you will start trying less hard to get rich, but trying hard not to get poor.
That said, start saving early. Pay your future self at least 15% of your base salary. Hence, why switching jobs to get larger base salary early, can pay-off huge later.
Work hard, get an education, keep learning, and learn from mistakes. Repeat the things that seem to work and stop those that don’t.
Find and use your core circle of people that you trust and respect to help you get on the right road for you.
Books and Podcasts:
Dave Ramsey’s The National Study of Millionaires - Ramsey surveyed over 10,000 U.S. households with a net worth of $1 million or more, revealing that wealth is primarily built through consistent, long-term investing (80% used 401(k)s),41, frugal spending, and high savings rates rather than6,7 inheritance. Key findings show 79% received no inheritance, 88% graduated college, and top careers included engineers, accountants, and teachers."Investing in yourself is the best investment you can ever make."
What to Expect in Each Decade of Life with Bobb Biehl—Executive Mentor, Author, Sage
The Aggressive Life with Brian Tome
What if life wasn’t nearly as unpredictable as we think? That’s what executive mentor, Bobb Biehl, believes. After 50 years working with some of the most successful executives and brands on the planet, he’s uncovered patterns, challenges, and opportunities that every person will face in life—and he’s organized them by decades. According to Bobb, your 20s are for discovering what you don’t want to do; your 40s are about survival; and your 60s are the most impactful decade of your life. In a world that leaves us all feeling perpetually behind, Bobb’s learnings are a breath of fresh air.
Listen on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-aggressive-life-with-brian-tome/id1472047907?i=1000659374663