We’re all Suckers: Why You Have to Build a System of Wealth

Neil was a smart kid, and I was a sucker.

For my 9th birthday, the present fairies had smiled upon me by sending a family friend to my house with the best gift a kid could ever receive. My own parents and grandparents had largely ignored my pleas that year, but this angelic soul had come to my salvation when they dropped off a large gift-wrapped box containing hundreds of used Topps Baseball cards and three brand-new, unopened packages of the 1989 series.

I was on cloud nine.

For months, I had watched my friends feverishly trading baseball cards at school and I had longed to be a part of the fun. For anyone under the age of 30, baseball cards were my generation’s Pokémon cards. If you haven’t seen a baseball card, each one would have an image of a specific player on the front and a short bio and stats on the back. Each card had a value and we would trade them back and forth continuously, constantly trying to wheel and deal for a coveted superstar or be lucky enough to land the rookie card of the next breakout star.

Unfortunately, I was as green and uninformed about baseball and baseball cards as anyone could possibly be, and Neil could smell the blood in the water. In one of my three packages of cards, he found the rookie card for a player by the name of Ken Griffey, Jr. (future Hall-of-Famer with multiple MLB records). Neil knew about baseball and he knew about Kenneth Griffey, Sr., “Junior’s” dad and a former Major League Baseball all-star. He also had a hunch this young player might make something of himself. I don’t remember the “incredible deal” he offered me that day, but I am pretty sure he walked away with my Ken Griffey, Jr., rookie card for a small pile of useless role players and I was none the wiser. To write this article, I just looked up the price of that rookie card on Amazon and saw it is now selling for over $1,000. Neil became one of my best friends in high school, so I obviously got over it, but, Neil, if you are reading this, we should catch up and talk about that card.

I have made a lot of dumb trades in my life similar to what I just dubbed, in my mind, as “the baseball card debacle of ’89.” Most of the time, it has been the result of making a deal or trade without having all of the knowledge or experience necessary to evaluate the transaction.

As bad as some of those trades have been, as I have learned about wealth mentality, I have come to realize most of us are making a far worse, and negatively impactful, trade on a daily basis. I am speaking of the accepted practice of trading our most precious asset (our time) for money. In the most basic sense, when we have a job or are self-employed, we are trading time for an agreed sum of money. Neil could see a sucker when he saw one, and in terms of our time, most of us are just as gullible as my 9-year-old clueless self with a box of baseball cards when it comes to the most important trade of our lives.

Hopefully, this isn’t the first time you have thought about this topic in those terms, but if it is, you are like most of the rest of us. It has only been in the last couple of years that I have fully realized how it is such a broken mentality to go through our entire lives trading time for money.

In a previous post (Stop Teaching Your Kids to Save Money), I talked about the water barrel example. In that analogy, I showed how filling up a leaky barrel with small buckets of water from a spigot was crazy.  I likened the journey back and forth to the water spigot with a bucket to our daily grind of going to work. This is a great visual lesson of how we trade our time for money.

I grew up being taught of a good day’s work for a good day’s pay, and I totally agree with the work part of that equation. What I am debating here is what the work is for. You see, people with a wealth mentality don’t focus on receiving money in exchange for their hourly work. That is a low return-on-investment activity, so they don’t waste their time there. They recognize four crucial things:

1. In order to fulfill their purpose in life, and find the most happiness, they need their time. It is very difficult to accomplish core purposes when all of your time is being traded for money.
2. The idea that trading time for money (as an employee of someone else) gives us more security or stability is a false premise. Your employer, at any moment, could shut down, cut back, or just seek to improve profit margins and then you will be out on the street, looking for a new job, with zero income (or a small severance to hold you over to the next job, where you get to do it all over again).
3. When you trade your time for money you are susceptible to the very real risk of a disabling injury or illness to you or your family that could take you out of the job market for an extended period of time. According to the Bureau of Labor Statistics, only 18.7% of individuals with a disability were employed in 2017, compared to 65.7% of individuals who did not have a disability. One injury and your income from work could be gone forever.
4. Trading time for money stinks. If we have to trade our time for anything, it needs to be building a system that can create wealth whether we are awake or asleep, healthy or sick, in the office or on vacation. In our water barrel example, this was analogous to turning on a hose to fill the barrel and walking away to do the things we want to do.

How do I do that?

This is the most common question I get when I tell people to stop working for money and start working to build a wealth system. This idea has been so completely missed in our financial education that most people don’t have the faintest idea where to start. Even within my MBA program, where we spent countless hours learning the details of business management, financial analysis, leadership, and operations, there was no mention of the idea that we should be building a system that will eventually allow us to take back our time and choose not to work every second of every day.

I think by now we can all agree having a system of wealth that constantly churns out money while we fulfill our dreams is a good thing. Anyone in disagreement please raise your hand so I can a count.

No one? Okay, then we can focus on answering the all-important “how” question. In this post, I am going to stay pretty general, but in future posts we will dive a little deeper.

We should probably first mention that the wealth system you decide to build is going to depend a lot on your current situation, and more importantly on what you want to accomplish in life. A young couple that wants to retire early and travel the world would do well to build a wealth system similar to what you can find over at fellow bloggers Millennial Revolution or Early to Rise. In fact, here is a list of several bloggers dedicated to helping people become financially independent through aggressive saving, measured investing, and careful planning.  Millenial Revolution,  The Simple Path to Wealth,  Get Rich Slowly,  Financial Samurai, and  Early to Rise.

While this type of wealth system has worked for thousands of people, it may not be right for you. Perhaps your dreams are different than those described by all of the bloggers and self-help gurus that you have found. In that case, the step-by-step guides you read are not pertinent to your situation. Maybe your dreams and life purpose require a higher level of wealth than afforded by the outlined plans above or you may not be willing to make the sacrifices they describe. If I have learned anything it’s that there is no one size fits all when it comes to building a wealth system. Fortunately, there are a few guiding principles that seem to be consistent, regardless of what you are aiming for in your life, which we will spend a lot of time teaching over the coming months.

While I can’t tell you exactly “how” to build your individual wealth system in this post, let me give you a few hints as to what a wealth system is, and is not.

A wealth system:

1. Involves owning a business. Whether you are buying stocks in an investment portfolio as mentioned above (owning shares of a business), building your own business, or investing in the business of someone you know, every wealth system owns a piece of a business (Real estate, book royalties, licenses, etc., are all lumped into the business category).
2. Is different for everyone depending on what they want in their life. Do you want to save enough to retire early? Build a business that will provide long-term income for you and your family? Build an empire and leave a legacy for your posterity? Whatever your end goal is, you need to define it.  Make sure you include the most important aspect of that goal: your time. How much time do you want to have away from your wealth system?
3. Requires a huge amount of work and effort to get started, but has a defined point in time when you will be able to get away.
4. Has a defined process and system for making money. Employees, equipment, automation, websites, social media, etc., are all tools of a wealth-creation system.
5. The best thing in the world once it is set up and going.

A wealth system is not:

1. A company with one employee who does all of the work (though you may start there and grow it into a system).
2. A get-rich scheme designed for short-term gains.
3. Easy to set up or effortless (Quite the opposite, in fact).
4. Something you set up once and then walk away from forever. It requires ongoing effort, just on your time, not someone else’s.
5. Required to make 7 or 8 figures of income. It simply needs to meet your needs as they pertain to your end goal, as stated above.

So, there it is. Get out there and start working on a wealth system so you can stop trading your time for money. You will never regret the decision to start trading time to build a system. One day, you will look back and wonder how you were ever such a sucker, and that is the Wealth Mentality Way.

If you want more information on how you can create your own wealth-creation system, contact us at www.wealthmentalityfamilies.com for a free consultation.