The One Surprising Investment that Separates the Rich and the Poor
How you invest your time determines how your financial future will unfold
My poor dad said he could not invest because he had no money. My rich dad said, “Invest your time when you have no money.”
Unfortunately, most people have no time to invest. Why? Because they think that working harder and longer will make them richer. Nothing could be further from the truth.
Consider these facts:
- The average U.S. worker clocks in about 1,804 hours per year at work — the highest output in the world
- 56% of Americans report doing work from home
- 20% report doing it every day of the week
- 25% didn’t take any time off last year
- 43% took less than a week off
Those numbers represent a 400% increase in productivity since 1960 — and a lot of tired, time-constrained Americans chasing the almighty dollar.
Yet, the inflation-adjusted wage growth for the middle class has stayed stagnate or declined. As the Economic Policy Institute reports, “From 1973 to 2013, hourly compensation of a typical (production/nonsupervisory) worker rose just 9 percent while productivity increased 74 percent.”
Clearly, working more doesn’t mean making more.
Why the poor stay poor
If you ask most people why they’re doing all this work, they’ll tell you it’s for money.
By this, they mean a steady paycheck that provides security. Money is one of the primary reasons people take on thousands of dollars in college loans to get a degree for a high-paying job that they don’t like but which they spend most of their waking hours at — all while the things they really love in life sit on the sidelines waiting for them to finish working.
The problem with this approach is that you only make money as long as you work. The only thing of value that you have to sell is your time. So, in order to make more money, you have to work longer hours, which is physically taxing.
Because you only have a finite amount of time and energy, as an employee, your earning potential is finite.
Why the rich get richer
Conversely, if you ask most rich people what they work for, they’ll tell you it’s for assets.
By this they mean investments and businesses that provide steady cash flow each month with little-to-no work. Instead of spending their life working for money, the rich work to understand how to make money work for them through financial education.
Adding more assets is much different than working for a paycheck. For instance, adding assets doesn’t require working longer or harder. In fact, the higher your financial IQ, the less you have to work to acquire high-quality assets. These assets then provide passive income, even while you’re sleeping or playing.
In other words, money works for the rich.
Plan to get rich
This is not to say that the rich don’t work. They just work differently.
Each year, Kim and I sit down together and set goals as to how many new assets we want to purchase. It’s important to note, we don’t make goals to make more money. We don’t spend our time looking for a better, higher-paying job. We know that if we focus on finding high-quality assets, the money will come — and for many years, even after the work of acquiring our assets is done.
Kim and I have spent many years building our portfolio slowly and steadily and investing in our financial education. We weren’t always rich, and we didn’t always have the financial IQ’s that we do today. But, like rich dad, we invested the time to grow our financial IQ through financial education when we had no money to speak of. We didn’t put that time into a job; we invested it in our financial future.
Today, we make millions of dollars a year in passive income — money that works for us instead of the other way around.
How about you? What are you working for? What are you investing your time in? Are you working towards making money work for you through the power of assets? Or do you spend your days toiling away at a job you hate in order to make money? If so, what’s holding you back?
Today, I encourage you to start investing in your financial education and building for your future through the power of assets.