Work once, get paid forever. These are the words of millionaire’s the world over, and by following this simple mantra we can all be in with a shot of the big time.
A mix of passive income philosophy and good old hard graft, there is no simpler route to becoming wealthy than those 5, simple words – Work once, get paid forever.
So how is it done? Let’s check it out…
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The Problem with Pure Passive Income
The purest form of passive income is earning interest from a bank savings account. It requires the least amount of work on your part, and consequently gives a pathetic return.
On this channel, we Money Unshackled boys advocate passive income in the form of high cash returns on investments, but these sweet returns are not 100% passive. We say that you need to put some effort in to get the best mix of returns and lifestyle.
Share portfolios need to be regularly rebalanced; rental property needs to be found, renovated, and managed even if you let your agent do the heavy lifting; and you should always invest time into understanding an investment before it is made.
But investments don’t require you to get up at 7am each morning and put in a 9 hour session in someone else’s office working on someone else’s dreams – so are infinitely more passive than the alternative – trading time for money.
Targeted Work – An Example
Instead of spending your efforts working hard and getting paid once for that time, what if you only invested your time into efforts that paid off forever?
In 2017, Ben worked hard for 5 weeks in his spare time doing up a large city Victorian townhouse, transforming it from a run-down family home into a 5 bedroom multi-let HMO.
With his business partner and some builders, his hard work resulted in a second bathroom, fire-doors throughout, and a high standard of finish in each room – in essence, an amazing investment asset.
Work like that pays nothing while you’re doing it but promises to pay handsomely forever.
Enhancing a property from a standard house to a pay-by-the-room model can double your future monthly income.
This was a result of a small extra upfront investment, and a few weeks of targeted work. Should he have paid professionals to do all the work for him?
He would now, but the first time you do something it’s usually good to get involved yourself, so that you have the knowledge to manage future similar projects.
Time spent – 5 weeks of weekends and evenings. Increase to future monthly income – about £300 extra per month per business partner. Work once, get paid forever.
The 70:20:10 Rule
Charles Jennings, a workplace performance guru, told businesses to live by the 70:20:10 rule to power growth.
It is a rule that we all can and should be applying to our personal finances as well.
The philosophy, translated into home finance terms, tells us that 70% of our time should be given to what makes us the most money currently.
For most this will be your job.
Then 20% of your time should be spent on building up your next great income stream (a side hustle business that has the potential to be passive) – leaving 10% of your time to research and think about future, as yet undeveloped projects.
The idea is that you ditch working on your primary income stream as soon as your second stream is large enough to benefit from extra effort and once your first stream is passive.
Unfortunately, if your first stream is a job, it can never be passive, so will soon have to be ditched entirely.
You want to end up in a position where you work hard on a side hustle business idea until it can run itself and pay you money forever with minimal further input; thereby allowing you to upgrade the time spent on Project 2 from 20% to 70%.
Over the years you want to end up with multiple established income streams for which you worked on in the past but get paid in perpetuity. If you can make even a few hundred pounds a month from each stream, you’re going to end up being very rich once a few are established.
Marketing and Working Smart
We both recently went to a SUM41 gig in Manchester which got us thinking about passive income.
We thought that the support act that played before SUM41 was great; they worked really hard on stage to put on a performance and they were playing to the right audience for their genre. But their marketing was terrible.
We never learned their name. There were no banners on stage. The tickets didn’t mention them as the support band, nor did an internet search.
As audience members, we should have had the name of this band shoved down our throats so we could find them later on Spotify and potentially generate them royalties forever. They were working hard but not working smart – they were missing an obvious opportunity to build a passive income stream.
Marketing is an essential part of Work Once Get Paid Forever. Once you’ve put in the hard work of building your asset, whether that’s a music album, website, book or whatever; tell people about it.
Who Wants to Be A Millionaire?
Very few people become millionaires through a salary. That is, by trading time directly for money.
By far and away the easiest way to become wealthy is by building up multiple passive or semi passive income streams, which build up and can be reinvested into the markets or other business ventures.
Most entrepreneurs work hard, but only on tasks that grow their income streams and that they enjoy – rarely to be paid directly for their time.
We can’t relate to those corporate CEOs who get paid 6 figure salaries, who are obviously millionaires, but continue to trade 70 or 80 hours a week of their time directly for money. Just invest your salary and retire already!
What Can You Do? – Investing for Success
If you don’t have a side hustle idea or aren’t confident to start a business, you can still stick to the Work Once Get Paid Forever mantra by investing as much of your salary as possible into the stock market or other investments.
By building up a substantial investment portfolio from your slave wages, you are getting paid an income forever in the form of dividends, rent, interest and royalties.
By reinvesting everything you earn from your investments, your income will grow. Soon, your efforts will pay off and you’ll be getting paid forever for work that you did in the past. That’s Work Once, Get Paid Forever!
Are you stuck trading your time directly for money? What are you doing about it? Tell us about your side hustles and investments in the comments below.