S01_E11 - A 9-5 Job will never make you rich

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The traditional route to financial security has been through a stable 9-5 job. That's what our parents did and that's usually what they tell us. Climbing the corporate ladder has been ingrained in us since early childhood and schooling and was thought to be the pathway to wealth. 

However, this path is no longer true in my opinion. While ascending in a career can lead to higher salaries, it also brings with higher taxes and greater responsibilities. This reality paints a sad picture: a regular job, while providing the illusion of stability, is unlikely to lead you to significant wealth.One of the reasons a 9-5 doesn't provide lasting wealth is rooted in how tax systems are structured. In many countries, the tax system is designed to incentivize certain behaviors and penalize others. Those who earn a salary are taxed on their income, often progressively, meaning the more you earn, the higher the percentage of tax you pay. 

On the other hand, the tax system rewards those who invest, buy real estate, create jobs, create business and provide opportunities for others - i.e. producers. These individuals benefit from various tax breaks, deductions, and incentives. For example, owning a business can offer deductions for expenses, while investing in real estate might provide depreciation benefits and lower capital gains taxes.

At the heart of this disparity is the difference between being a consumer and a producer. The 9-5 job often falls into the consumer category. People in this bracket typically work, earn, and spend. Their financial growth is linear and limited by the amount they can earn and save after taxes and expenses. These are usually the people the Government has to support in old age. 

Producers, however, approach wealth creation differently. They focus on creating value, be it through businesses, investments, or real estate. Their income is not just a function of time spent working but is tied to the value they create and the assets they build. This approach can lead to exponential wealth growth, especially when combined with the advantages of compound growth and smart investment strategies.

To move towards wealth, the key is to shift from a mindset of consumption to one of creation. This doesn't necessarily mean quitting your 9-5 job immediately. Instead, it's about gradually building assets that can generate income beyond your regular salary. This could be through side businesses, real estate investments, stock market investments, or any avenue that allows your money to work for you.

Not only will a 9-5 not make you rich, but it also creates a very serious bottle neck; a single point of failure if you will. If you only have your job as a source of income, then no doubt your entire lifestyle is linked to that job. Lose the job, lose the lifestyle. This can bring incredible amounts of stress for yourself and your family.

Ensuring you have investments and other sources of income, albeit small, is enough to provide you some buffer should the worst happen. My personal experience is that these extra streams of income, also make you a better performer at work because you're not scared to lose your job. You take more risk, you're bolder in your approach and you're willing to try things that could fail. 

However, if you're scared to lose your job, you'll act conservatively, with caution and strive towards maintaining the status quo. Not exactly a recipe for a high performer. 

So I advise you to stop blaming the Government. Stop blaming corporations. Start thinking about how you can create value because when you do, you'll be well on your way to enjoying the tax breaks and opportunities that the rich do.