Change Your Financial Future: Stop Trading Time for Money


In high school, I learned about covalent bonds but not about leveraging and investing. I learned all about the isosceles triangle, but I didn’t learn what an ROI is. (It’s a Return on Investment, by the way.)

So today I’d like to offer a foundational principle for those wanting to change their financial future. Maybe you don’t want to repeat your parents’ mistakes. Or maybe you want to replicate what you’ve seen your parents accomplish. Maybe you want to pay cash for your kids’ college, or you want to have the freedom to travel when and where you desire.

Whatever your reasoning, my guess is that you wouldn’t be too disappointed to part ways with the rat race.

I describe the rat race in this way: you go to a job that you have to be at or you’ll get fired, you work for the least amount of money that your employer can get away with paying you. If you work harder or smarter, your pay stays the same and their pay goes up. You make enough to pay your bills, eat out a bit, cover your car payments and save a little. You hear yourself wondering aloud, “What the hell do I have to do to actually get ahead?”

That’s a terrible feeling. It’s a feeling I’m familiar with, and one that I refuse accept.

There are a number of pieces to this puzzle, but the first piece is one you’re used to hearing me talk about: MINDSET.

You have to change the way you think about money. If you still think that your level of wealth is dictated by your salary, by how much you make, you’re in trouble. Have you noticed that however much money you make, your expenses somehow seem to match it?

I remember being in a 16-passenger van, on my first professional gig as a musician. I was 21 years old, and I was telling some of the older guys that I was living off of about $1000/month. They couldn’t believe it–and I couldn’t understand why that was so shocking!

However much money you make, you’ll find a way to spend it. Simply collecting bigger paychecks is not the answer. Salary does not equal wealth. Again, let me reiterate, because this is important: SALARY DOES NOT EQUAL WEALTH.

With the right mindset, you can take a modest salary, steward it over time, and build significant wealth. (Check this out for some great insights on how that is done!) With the wrong mindset, you can work for years earning a substantial salary, and end up with nothing to show for it but cars and boats that have depreciated in value.

It’s not about the size of the paycheck, it’s about what your mindset leads you to do with those paychecks. It’s about building net worth. That is wealth.

The most basic, mindset-altering principle that I encourage you to internalize, is this: STOP TRADING TIME FOR MONEY.

Why? Because not only is your time your most valuable asset, but there is no way to increase the amount of time available to you.

So if you’re stuck in the rat race, you’re not making it or at least not growing, and you need more money, then you have two options: convince the person in charge of your salary to give you more money for the same amount of time… OR… take time away from things that are important to you like family, rest, hobbies, and instead trade that time for more money.

I don’t like either of those options. I hate them actually.

So how do you quit trading time for money? So glad you asked!

Like anything worth accomplishing, this isn’t an overnight, flip-a-switch type of change. It’s a goal, a dream, something powerful that must drive you, because it’s a process that requires patience, risk, discomfort and hard work.

You still may be trading time for money, at least for a while. But the principle is simple: instead of you being the only one working to earn money, let your money work to earn you more money. Another option is to leverage people—use their time to earn you money.

Think about it: that’s exactly what your boss, or maybe your boss’s boss, is doing… right? You work 40 hours and she gets a check. You create $100k of income for the company, you take home a salary of $60k, and she keeps the other $40k. (Obviously that’s a bit over-simplified, but only a bit.)

There is nothing wrong with working to pay the bills, working to take responsibility for the things that you ought to be responsible for. But what needs to be happening—and what absolutely can be happening—is that behind the scenes, while you’re working for money, your money is also working for money.

I’ll use rental property as a perfect example.

I work as a real estate agent. On a more flexible basis, I still trade time for money. It’s my day job. My work as an agent pays the bulk of our bills. I have to make a pretty sturdy sum each year just to break even and stay afloat. That’s not growth. It’s stressful. It’s “I better make this or we are screwed.”

But I also have rental property, which I don’t deal with on a daily basis. That property appreciates in value, as well as generating cash-flow every single month. That is money that I don’t need to live off of today. That’s money that comes to me without 40 hours invested. Or even 20. Or even 5. That is money that my money has made for me.

Now I can grow. My bills are paid by my day job, and all the while there’s this whole separate income happening that I don’t have to be there for. I’m not trading time for money, in that instance. I’m trading some money for more money. (And yes, on occasion, I have to throw in a bit of sweat equity.)

It’s simple: would you be willing to trade me $10 for $15? Of course! There are vehicles that exist that allow that very thing. But most of us would rather have a car we’re proud of and the biggest TV we can find.

There are a vast number of these types of vehicles that vary widely in terms of risk, involvement, return, liquidity and so on. But the bottom line is, they’re all better than only trading time for money.

Over time—it’s a slow build—the more money you trade for money, the more of your time you can take back.

This principle separates the two groups that we perceive as the Have’s and the Have-Not’s. Those aren’t inherent traits, though. A more appropriate designation might be the Understand’s and the Don’t-Understand-Yet’s, or the Leveragers and the Non-Leveragers.

I want to clarify one last thing: when you have made this shift in mindset, suddenly a bigger paycheck does take on more meaning. You now have the mindset and the wisdom that will take that paycheck and put it to powerful work. It won’t just turn into more stuff that clutters a house that you can barely afford. It will stimulate more and more growth, it will perpetuate the cycle. You’ll make more money, which you’ll then employ to make even more. It’s a beautiful thing!

The moment you decide to leverage something other than your own time to achieve financial growth, your journey to freedom has begun.

In a follow-up post, I’ll get into how to leverage systems, rather than money, to achieve the same thing.

So, are you ready to stop trading time for money?


*By the way, my shift in mindset–since I wasn’t taught any of this in school as I was being prepped for the real world–was when I got ahold of THIS BOOK. (Click it and buy it! For real!) Robert Kiyosaki’s Rich Dad Poor Dad totally blew me away. I highly recommend checking this out. This book may have single-handedly changed my course and dramatically altered my family’s experience.

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