A Fixed Income Is a Sucker Bet (Blog)

[MidasGirl]

Excellent article.
I read this part and thought, yup, he's a real Aries. I recognize ya.

For my taxes, I pay an accountant to do all the paperwork for me. That costs extra money, but I don’t worry about it. I also procrastinate endlessly when it comes to doing any sort of accounting work. I do the bare minimum I can. I keep everything in good order, but I don’t balance the accounts very often. At tax time I let my accountant work his magic to figure out the best deductions for me, but if I have to do extra work that I don’t want to do just to save a little more money, I simply decline.

An Aries that doesn't like to do the mundane stuff, what a surprise?

[Sam988]

Originally Posted by Sam988

I don't know why Steve doesn't mention one thing.

Getting a "sucker" corporate job has one big advantage: you get to leverage your abilities with someone else's money and structure, while earning an income that you wouldn't be able to earn if you didn't have those resources available. And if you screw up, the worst that can happen is you get fired, but you're not responsible for the money you lost (unless you did something illegal).


When you don't have any capital, that's certainly a great deal. It's like someone lends you money and you get to keep a part of what you gain from the investments but if you lose you don't have to pay anything.

Now how is that a "sucker" thing to do? When the person is starting up it's the wisest choice. And this is not even counting all the support/learning, growing/traiging and networking he can do inside the company.


Look at the finance/investing/banking industry. People there earn huge sums because they are given lots of other people's resources to work with. So Steve could say: "Ah look at these suckers working their a**es off to make money for other people" but the truth is these people are also getting a big piece of the cake, a piece that they'd never be able to get if they were to only invest with their own money and "keep it all" of whatever little they make.



Of course, for a near-broke 40 year old, stuck in his position and with not enough education or skill to rise higher inside the corporate structure it totally sucks and he would be better off doing something else.

For once, i'd really like an answer to this previous post of mine, Steve.


Just to make things as clear as possible: Working for big corporations means being able to maximize one's skills to create more value than one would be capable of creating if he didn't have the tools/capital/structure that the corporation affords/lends him. As a consequence of the higher amount of value he creates with the help of the corporation, he can receive more money than he would receive if he used these same skills by himself -without any instrument to leverage them.

So once/if ever the fellow has accumulated a decent amount of capital/skill/clients/experience, then dropping the corporate job might be a good idea (if there are no prospects for a further rise in the corp hierarchy), but until then it's a great option and far from being a slave job.

[Acting Like Godot]

Seriously, Steve doesn't understand much about salaried employees. It isn't his fault. It's just one of those things where he doesn't have much actual experience (if any at all).

Just hypothetically, try to imagine what might happen if Steve decided that, for a year or two or three, he would just try out being a salaried employee, just to see what it would be like.

Steve being Steve, he would bring his PD background into it, of course. In other words, all the stuff that Steve knows about time management, effective communication, goal-setting, prioritising tasks, being creative, LOA, psychic power, building relationships, adding value etc etc .... he would automatically bring into his job.

Do you think Steve's income, as an employee, would stay "fixed"? No, of course not. He would rapidly get bonuses; promotions; pay raises; and also job offers with higher pay, from competing firms. Therefore there would be nothing particularly "fixed" about his income.

I've been a salaried employee for most of my career, and is my income fixed? Nope. It's actually been growing rapidly, ever since I picked up a certain book entitled "Goals!" from Brian Tracy, sometime around 2003. That book sparked off my interest in PD, and as I gradually applied more and more PD ideas in my career, I just earned more and more and more.

----------------

Consider Steve's affirmation - "I'm earning 100,000 dollars a month."

Now, ask yourself this. Do you really think that there are no salaried employees out there, earning $100,000 a month? Of course there are. And do you think that all self-employees out there also earn $100,000 a month or more? No, of course not. Some earn way less and some end up bankrupt.

It all depends on yourself .... and on factors like your own skills, ability, drive, creativity, ideas etc. Whether you are a salaried employee or a self-employed person in itself says little about your earning power.

[nin64]

Originally Posted by JoeRad

OK, seriously?!?

This is getting annoying, and I know Steve, you couldn't care less. But let me put it to you this way.

You're completely out of wack from reality. As much as you would like to believe, there are certain facts that are in this world, and for some of us who actually still struggle very ♥♥♥♥♥♥♥ day, we actually have to work HARD. We work for our families, for those who cannot support themselves. We work to get through school, so we can one day work better, and work a little less hard. We work, we work at the jobs that support lifestyles such as yourself. maybe we are slaves, but dammit, while I work to make the things you upper-class people consume on a regular basis, maybe you could not freaking insult me while I do it!

I work hard, I work hard to help others that NEED MY HELP! I work to support others. Did I choose this, no! Am I happy, NO! But SOMEONE had to do it, and it sure as hell won't be people like you!

I usually keep an open mind about all of these articles you right, but now you're just conceited, looking down on all us salaried lower-class persons with contempt. I actually try, you know? I once hard hope, and dreams of better things, instead, I got obligations and concept from the very people who are supposed to have helped me toward my dreams.....I'm so sick of it....I'm tired of this bull.

Take my money. Take my life, but dammit, try to have a modicum of respect for the fact that not everyone gets as lucky as you, or can afford to take the time to blaze a trail through school in 2 semesters. Some of us just struggle everyday to support others...some of us are not in control of our own destinies!

"Good... Feel your hatred, let it fuel your every actions..."

"Does this mean I have to stop helping other people?"

"Do not hesitate! Show no mercy!"

[bigadam]

When you watch some of the old black and white romance movies from the 50s and 60s, there's often a scene in which the female lead - furious at her male persuer - is suddenly grasped and held securely by the male star. She then pounds furiously on his chest in an effort to get away, only to succumb and collapse into his arms.

I used to get angry with Steve for some of his articles. I'd piss and moan that he was born smarter than me, born richer 'n me, better looking etc. He just didn't understand the working class!

Then I took a moment to contemplate/visualize a world in which I just focused on creating value instead of working for money - and breathing in that world felt amazing.

I'm still working a 8 to 5, and while I enjoy the work I do, I far more enjoy the internet business I started at night two weeks ago. I owe a lot for Steve for challenging my beliefs.

[Elfwing]

As somebody said - does Steve have any articles on burnout? I made a search but all I could find was forum posts. (I would love him forever if he wrote one.)

While I don't disagree with some things Steve said I owe him a lot as well. Even though people say he's condescending and so on - and heck, I agree sometimes, too - he's taught me it's okay to be the way I am.

And the way I am is somebody who really, really doesn't want a job, but considering I'm a teenager I'd better get alternate ideas really quickly unless I want to have to get one. Bah.

[munish]

Originally Posted by Acting Like Godot

I've been a salaried employee for most of my career, and is my income fixed? Nope. It's actually been growing rapidly, ever since I picked up a certain book entitled "Goals!" from Brian Tracy, sometime around 2003. That book sparked off my interest in PD, and as I gradually applied more and more PD ideas in my career, I just earned more and more and more.

er.

I think Steve said sometime back.

Brian Tracy says total B.S.

[spirit4711]

Originally Posted by Sam988

For once, i'd really like an answer to this previous post of mine, Steve.


Just to make things as clear as possible: Working for big corporations means being able to maximize one's skills to create more value than one would be capable of creating if he didn't have the tools/capital/structure that the corporation affords/lends him. As a consequence of the higher amount of value he creates with the help of the corporation, he can receive more money than he would receive if he used these same skills by himself -without any instrument to leverage them.

So once/if ever the fellow has accumulated a decent amount of capital/skill/clients/experience, then dropping the corporate job might be a good idea (if there are no prospects for a further rise in the corp hierarchy), but until then it's a great option and far from being a slave job.

How about this one: if you're a salaried employee, you are not the one who determines your salary, your work environment, your schedule, your colleagues. You are subject to silly time consuming meetings, incompetent managers, non-productive team members that hold you back, silly company policies, etc etc etc.

You're paying a price for making yourself dependent on others in this way. That's the slave mentality Steve's talking about.

Yes you can learn a lot too but can't you learn that in other ways as well?

If you're self-employed, or have your own company, you have much more influence in what is important for you. It is not a bed of roses but it's much more empowering.

[seeker5]

The interesting thing is that some studies have shown that statistically speaking, entrepreneurs on average make less than they would if they were employed doing what they were doing with the skills they currently have.

However, the same study showed that statistically speaking, entrepreneurs are much more satisfied than employees of the same skill level and experience.

[spirit4711]

You have a link for that study?

If the study is correct, the argument goes both ways: some salaried employees could make a lot more self-employed than they do in their salaried jobs.

[munish]

Steve rightly said.

high salary is just the modern form of a slave's shackles.

[Acting Like Godot]

LOL, the way you put it ...

Originally Posted by spirit4711

How about this one: if you're a salaried employee, you are not the one who determines your salary, your work environment, your schedule, your colleagues. You are subject to silly time consuming meetings, incompetent managers, non-productive team members that hold you back, silly company policies, etc etc etc.

You're paying a price for making yourself dependent on others in this way. That's the slave mentality Steve's talking about.

.... it's as if

a self-employed person's income is not determined by his customers;

his work environment is not constrained by his budget;

his schedule is not influenced at all by his customers or his suppliers or other business contacts;

he doesn't ever need to meet anybody;

all his employees will be competent and productive;

and all the business policies he figures out for himself will be hitch-free and work out perfectly.

Very wishful thinking.

----------------------------------

Steve, if you're going to encourage people to be self-employed, you should at least remind them that being self-employed doesn't mean that life is easy and fun everyday and you don't need skills, education, planning, customers or business contacts. Because that seems to be the impression that some of your readers have.

[spirit4711]

@ALG, I never stated or intended that. I did write "It's not a bed of roses". Read again .

[Dhaval Raja]

Originally Posted by Acting Like Godot

----------------

Consider Steve's affirmation - "I'm earning 100,000 dollars a month."

Now, ask yourself this. Do you really think that there are no salaried employees out there, earning $100,000 a month? Of course there are. And do you think that all self-employees out there also earn $100,000 a month or more? No, of course not. Some earn way less and some end up bankrupt.

It all depends on yourself .... and on factors like your own skills, ability, drive, creativity, ideas etc. Whether you are a salaried employee or a self-employed person in itself says little about your earning power.

Asking myself, Can a salaried person earn money equal to the self employed Bill Gates?

Didn't find any

Can a salaried have the independence of his own time?

Didn't find any

Can a salaried dream to pursue his own goals?

Didn't find any

Regards,
Dhaval

[Acting Like Godot]

Originally Posted by spirit4711

If you're self-employed, or have your own company, you have much more influence in what is important for you.

You underestimate the influence that salaried employees can have. There are all kinds of salaried employees. Eg you could be the head of a department, or an entire business division, or in charge of 60,000 workers, or have regional responsibility for operations across one continent, or be the Secretary of Defence in the United States.

All of those people are salaried employees.

[spirit4711]

Originally Posted by Acting Like Godot

You underestimate the influence that salaried employees can have. There are all kinds of salaried employees. Eg you could be the head of a department, or an entire business division, or in charge of 60,000 workers, or have regional responsibility for operations across one continent, or be the Secretary of Defence in the United States.

All of those people are salaried employees.

I don't underestimate that. I think you overestimate their independence. I've written about that before, kindly read again.

[Acting Like Godot]

Originally Posted by Dhaval Raja

Asking myself, Can a salaried person earn money equal to the self employed Bill Gates?

Nah. However, a salaried person can earn money equal to the Vice CEO of Microsoft, which is probably around a few hundred million dollars a year. Enough for you?

Can a salaried have the independence of his own time?

That's what you don't understand. Salaried employees CAN have a lot of independence of time. It all depends on things like how senior you are; how you allocate your responsibilities etc.

(Quick example - my wife used to work 5 days a week in the office. Now, for a slightly higher salary, she works three days a week, and half of those three days, she works from home, and it's up to her which 1.5 days per week she will work in the office. How come? Because she's so good in her work that when she wanted to resign to spend more time with our kids, the company was desperate to keep her and worked out all these arrangements. In fact, she was asked to rewrite her own contract and put in whatever terms she wanted).

Can a salaried dream to pursue his own goals?

LOL, yes of course. It depends on what your dream is. There are all kinds of dreams in the world.

Some people want to be a journalist, they work for a newspaper.

Some people want to be an astronaut, they work for NASA.

Some people want to be a pilot, they work for the air force.

Some people want to catch bad guys, they work for the police force.

Some people want to be a teacher, they work in a school.

Some people want to be a clown, they work in a circus.

Some people want to be an NBA superstar, they work for a professional basketball team.

[spirit4711]

Originally Posted by Acting Like Godot

...
That's what you don't understand. Salaried employees CAN have a lot of independence of time. It all depends on things like how senior you are; how you allocate your responsibilities etc.
...

Always interesting how people say 'you don't understand'.

"Salaried employees can have a lot of independence"

Slave owner, circa 1750: "My slaves are quite independent too."

The whole discussion is a matter of interpretating the independence of a salaried employee versus a self employed person. I tend to agree with Steve on this. And yes, there will be exceptions on both sides ('enslaved' self employed and 'independent' employees).

[Acting Like Godot]

Originally Posted by spirit4711

The whole discussion is a matter of interpretating the independence of a salaried employee versus a self employed person.

As I said, there are all kinds of both kinds.

Many self-employed persons that I've come across do not strike me as being particularly independent, say, with their time. In fact, their schedules are heavily dictated by their clients' demands.

I know this doesn't apply to Steve, but it applies to lots of self-employed people who provide services (eg personal trainer; swimming instructor; driving instructor; financial adviser; property agent; babysitter; plumber).

If you can't come at the time I need you to come, I won't engage you and I'll get someone else. So you don't get paid. If you do want to get paid, you have to serve me at the time that I want to be served. The customer dictates the time, not the self-employed person.

[Acting Like Godot]

Originally Posted by spirit4711

"Salaried employees can have a lot of independence"

Slave owner, circa 1750: "My slaves are quite independent too."

I dunno, maybe it's the working culture in your country, or in the kind of organisations that you've worked in before.

Speaking for myself, I go to work 5 days a week, but basically no one really cares what time I go to work, and how long I go for lunch, or what time I leave the office. The general idea is that as long as I get my work done, no one should bother when I come and go.

Of course it is understood by my boss that I am a capable, mature and sensible person who will handle my responsibilities with initiative and independence. I don't need supervision.

Where I come from, senior employees not only work with a high degree of independence, they are EXPECTED to work with a high degree of independence, make their own decisions and judgment calls etc etc, and they are largely expected to consult their bosses only if they encounter a problem or issue that they feel they can't handle on their own.

[seeker5]

Originally Posted by spirit4711

You have a link for that study?

The Entrepreneurship Myth

The argument in the article is that if you're self-employed, you need to earn less money to be happy than if you're employed.

So, perhaps one way to look at it is that the average self-employed person doesn't feel as much of a need to earn more money then employees, because they are happier where they are at.

The other way is that most self-employed people aren't capable of earning more money. .

[Acting Like Godot]

Originally Posted by spirit4711

"Salaried employees can have a lot of independence"

Slave owner, circa 1750: "My slaves are quite independent too."

You see, you're not a slave if you can just up and leave anytime you wish.

Here's a bit of my most recent job history.

- I used to work with Bank A.

- Then I left, because Bank B offered me a higher salary.

- 18 months later, Bank A offered me an even higher salary, and I returned to Bank A.

- 12 months later, Bank B offered me an even higher salary, so I left Bank A and returned to Bank B.

Basically I just went to and fro between two organisations, collecting higher and higher pay, because both organisations knew that I was very good at what I do, and they entered into a bidding war for my services.

As I said, there was nothing very "fixed" about my salary. It just went up and up and up. My bonuses too.

I don't rule out going back to Bank A again. It may happen in the future. If they offer me another 30% increase in salary, I'd go.

[munish]

Originally Posted by Acting Like Godot

Nah


That's what you don't understand. Salaried employees CAN have a lot of independence of time.

ALG,

You win!

[Dhaval Raja]

Originally Posted by Acting Like Godot

Nah. However, a salaried person can earn money equal to the Vice CEO of Microsoft, which is probably around a few hundred million dollars a year. Enough for you?

To be 100% frank, I dont like anything less than the best
I would say the same on serious level. There is always a self-employed above an employed.

Originally Posted by Acting Like Godot

That's what you don't understand. Salaried employees CAN have a lot of independence of time. It all depends on things like how senior you are; how you allocate your responsibilities etc.


(Quick example - my wife used to work 5 days a week in the office. Now, for a slightly higher salary, she works three days a week, and half of those three days, she works from home, and it's up to her which 1.5 days per week she will work in the office. How come? Because she's so good in her work that when she wanted to resign to spend more time with our kids, the company was desperate to keep her and worked out all these arrangements. In fact, she was asked to rewrite her own contract and put in whatever terms she wanted).

Your wife has a wonderful job buddy, but wouldn't it be better if she can work all day from home with passive income and that too no limit on how much she can earn.
I really work from home and its fun! If you have your own online business you can actually go for a week holiday and your system is still working for you.

P.S. I am not promoting a work from home website

Originally Posted by Acting Like Godot

LOL, yes of course. It depends on what your dream is. There are all kinds of dreams in the world.

Some people want to be a journalist, they work for a newspaper.

Some people want to be an astronaut, they work for NASA.

Some people want to be a pilot, they work for the air force.

Some people want to catch bad guys, they work for the police force.

Some people want to be a teacher, they work in a school.

Some people want to be a clown, they work in a circus.

Some people want to be an NBA superstar, they work for a professional basketball team.

You can be an astronaut now, by just buying as ticket to space from NASA.
Its costly but the option is there.
War means killing people so army and airforce not so good options unless someone like to kill people.
No one would like to be a commercial pilot if they can have there own plane to fly whenever you want.
Would you like to be a journalist, if you can start your own newspaper and be a editor to print the exact news you want and create social awareness.
You can have your own detective agency to catch bad guys (Hardy Boys fan, come forward! )
A sports person can be self employed or salaried as it depends on his contract They have multiple passive income streams from advertisement.

I have even seen dumb self-employed who work like labours for clients.

Its more important to understand the fun, freedom, pottential, satisfaction, growth and challenge of being self employed.

Regards,
Dhaval

[Acting Like Godot]

Originally Posted by Dhaval Raja

I would say the same on serious level. There is always a self-employed above an employed.

Not always, these days.

Eg consider a person who works his way up and becomes the CEO of a listed MNC. The listed MNC isn't owned by any single "self-employed" person. Instead the MNC is owned by the tens of thousands of shareholders who hold the shares of the listed MNC.

Your wife has a wonderful job buddy, but wouldn't it be better if she can work all day from home with passive income and that too no limit on how much she can earn.

But who says salaried employees can't have passive income?

I have passive income. It comes from my investment portfolio. I get a little advertising income from a blog of mine. I've written a book and collect some royalties there. My second property is still under construction, but when it's ready, I'll move there and collect money by renting out my current home. Etc.

Its more important to understand the fun, freedom, pottential, satisfaction, growth and challenge of being self employed.

I like fun, freedom, pottential, satisfaction, growth and challenge too.

What I am pointing out is that neither being an employee nor being self-employed necessarily guarantees or prevents any of that.

And self-employment can often work out to be a worse trap. Why?

You see, if you're an employee, you can walk out anytime, by tendering your resignation letters. 30 days later, you pack your coffee mug and your pencil holder, you take your skills and experience, and you're off to do whatever else you want to do next.

But if you're self-employed, typically you would have sunk your capital into some fixed assets which are not that liquid and not that disposable (eg factory equipment, or a printing press, or a computer server, or several hundred dishes and plates for your restaurant business). You might also have entered into some longer-term arrangements (eg a 2-year rental agreement).

You can't just say, "I quit" and walk away in 30 days.

[Acting Like Godot]

Originally Posted by seeker5

The argument in the article is that if you're self-employed, you need to earn less money to be happy than if you're employed.

LOL .... if your real concern is happiness, I suggest you try Buddhism.

Money does not buy happiness, whether you get it as a salaried employee or earn it in self-employment.

[Dhaval Raja]

Originally Posted by Acting Like Godot

Not always, these days.

Eg consider a person who works his way up and becomes the CEO of a listed MNC. The listed MNC isn't owned by any single "self-employed" person. Instead the MNC is owned by the tens of thousands of shareholders who hold the shares of the listed MNC.

Those share holders are partially self-employed when they own a part of shares and there is always a founder

But who says salaried employees can't have passive income?

I have passive income. It comes from my investment portfolio. I get a little advertising income from a blog of mine. I've written a book and collect some royalties there. My second property is still under construction, but when it's ready, I'll move there and collect money by renting out my current home. Etc.

You're already a partial self-employed with variable income then, don't call yourself just a weakling salaried.

I like fun, freedom, pottential, satisfaction, growth and challenge too.

What I am pointing out is that neither being an employee nor being self-employed necessarily guarantees or prevents any of that.

And self-employment can often work out to be a worse trap. Why?

You see, if you're an employee, you can walk out anytime, by tendering your resignation letters. 30 days later, you pack your coffee mug and your pencil holder, you take your skills and experience, and you're off to do whatever else you want to do next.

But if you're self-employed, typically you would have sunk your capital into some fixed assets which are not that liquid and not that disposable (eg factory equipment, or a printing press, or a computer server, or several hundred dishes and plates for your restaurant business). You might also have entered into some longer-term arrangements (eg a 2-year rental agreement).

You can't just say, "I quit" and walk away in 30 days.

You can sell the heck of a company and move or just liquidate everything
No need to even give a notice to anyone!
You get money when you quit!
When you quit in job, you get nothing no matter how many years you worked.

You're very actively defending salaried, did steve's post struck a cord

Regards,
Dhaval

[Acting Like Godot]

Originally Posted by Dhaval Raja

You can sell the heck of a company and move or just liquidate everything

Sure. Hope you:

(a) succeed in finding a buyer;
(b) manage to get a good price; and
(c) don't take too many years to achieve the above.

You're very actively defending salaried, did steve's post struck a cord

Not at all. I truly do not aspire to be self-employed, and I do not envy the self-employed at all.

Instead I aspire to a salaried job, such as being the CEO of a bank. I don't have to be the CEO of the entire bank, I'd be pleased to be, say, the regional CEO, or the CEO of the bank in one particular country.

[Magicinthenight]

I guess I'm not as into making money as Steve is, since my fixed income isn't an issue for me. Sure, more money would mean I could consume more things, but I don't need things/money to make me happy.

I come from a relatively low income family where everyone always prioritised love over money. I like my job, I'm good at it and like the fact that in these economic times my job really IS safe (I'm not depending on customers, nor am I depending on how the stockmarkets or businesses turn). As far as money goes, it's not an issue, I live comfortably and can do things I like which is enough for me.

In my job, I have the chance to help kids every day. I get to influence, I get to motivate, I get to have fun. Sure, it's a fixed income, but income never was my main goal in mind when I was figuring life out, satisfaction with life was. And that satisfaction isn't fixed on your income.

And instead of saying "I can't afford it" I find myself often saying "I don't need it". I know consumerism is deeply driven into us but instead of getting on the wheel (I gotta make more money to afford this and that) I find it healthier to get off and take a look of all the things you have that your income (fixed or not) can never buy.

[MidasGirl]

Originally Posted by Dhaval Raja

Your wife has a wonderful job buddy, but wouldn't it be better if she can work all day from home with passive income and that too no limit on how much she can earn.
I really work from home and its fun! If you have your own online business you can actually go for a week holiday and your system is still working for you.

Working from home is over-rated. It's over-romanticized. I've done it the last 8 years and while it's fun, it has its downsides. I really like the setup that ALG's wife has. Some people want to actually interact with other humans besides their children and spouse, especially if the biz you're in doesn't involved dealing directly with customers. WFH is great when your children are really young, if that is the reason for working from home. I really love that your wife can do both ALG.