Don’t Work Hard For Money; Work for Income-Producing Assets

We all want to work hard and contribute to society as a whole. Well, most of us want to do this. However, working hard to pay our expenses will never allow us to get ahead of the financial power curve. 

The problem with working for money, or exchanging time for money, is that once you stop working, your money also stops. If I worked eight hours for $160, I would have traded my time for money ($160).

If I then exchange my $160 to pay my cable bill, I will have to work another eight hours to pay my cable bill next month. This revolving hamster wheel is called the rat race.

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However, if I exchange my $160 for 25 shares of Annaly Capital (NLY), I would receive an 11% return on my money. This means I would receive $17 in dividends every year from this purchase. 

Eventually, I would be able to pay my cable bill with my NLY dividends. When that happens, I will become work-optional or financially free. Yes, it will take a while to build up my assets to set myself free, but it is more than possible. 

Working for money. I just finished a YouTube video on how “The American Dream Costs $5 Million (article).” The only way to get close to creating this type of wealth is to make money in your sleep. 

In both scenarios above, I worked for money. I exchanged my eight hours for $160. However, in the second example, I focused on buying income-producing assets instead of paying expenses. 

Most people will always exchange time for money, then money for expenses. The sad reality is that it is effortless to go with this programming. It requires no financial sophistication to trade time for expenses. However, once in this trap, it is challenging to remove yourself.

Real Estate is I.D.E.A.L: Income

Lifestyle inflation keeps you in the trap. If our expenses remained the same throughout our lives, we would eventually spring ourselves from the trap. As we worked up the corporate ladder, our income would grow, and our expenses would remain the same.

This income growth would give us cash flow, and we all know how vital cash flow is to our households. However, as our income grows, our expenses grow as well. We call this lifestyle inflation. 

Even worse, sometimes our lifestyle grows faster than our income—we call this debt. We are not only on the hamster wheel; we are in-debt-ured servants. We need to avoid this scenario at all costs.

There is another way. Instead of working hard to pay expenses, we need to work towards building a portfolio of income-producing assets. These assets will continue to make us money while we sleep, work, or hang with family—this is how we become wealthy. 

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What are income-producing assets? I keep referring to these assets as “income-producing” because I want to be very clear. Many people (including banks) call cars, boats, furniture, etc., assets.

Banks consider these assets because they can sell them if they need to foreclose on your home, business, or loan. They can liquidate these “assets” if there is a judgment against you.

To us, these are all liabilities because they do not produce income. They cost money and pay nothing to us. The book “Rich Dad Poor Dad” gives us the skinny on assets vs. liabilities. If you are looking to escape the rat race, this book should be your first read. 

Income-producing assets make money for us. Some of these assets include: 

1. dividend-paying stocks 
2. interest-paying bonds 
3. interest-paying stable coins 
4. income-producing real estate 
5. income-producing creative works 
6. residual automated business income

Do all of the assets cost money? Many of these assets cost money, but not all of them. Building a dividend portfolio that can set you free will take time and money. 

4 Years of Content vs. 4 Years of College

However, you can create assets as well. You can turn yourself into a creative worker and generate royalties from music, video, and writing. Once you have a nice little income stream of royalties, you can convert those into dividend income. 

How to exchange time for assets. I explained working hard and converting your money into investments in the series From Dirt to Dividends. 

1. From Dirt to Dividends 1: Gardening & Preferred Shares
2. From Dirt to Dividends 2: Livestock & Closed-End Funds
3. From Dirt to Dividends 3: Insects & Business Development Companies
4. From Dirt to Dividends 4: Community Farming & Mortgage REITs
5. From Dirt to Dividends 5: Composting & Dividend ETFs
6. From Dirt to Dividends 6: Vermiculture & High-Yield Blue-Chip Companies

This series explains how to build a small business on your homestead. Once you get income rolling in, you can buy high-yield dividend products on the stock market.

You protect yourself from future troubles by purchasing assets instead of using your business revenue to pay expenses.

Living Overseas Passively with Cash & Emergency Funds

You now can relax knowing that you are producing income whether your business fails, emergencies strike, or your crops die. That’s the power of working towards building assets. 

How do I start collecting assets? First, you need to generate cash flow. Cash flow is the difference between income and expenses. So you will want to lower expenses and increase income. 

If you have no money, I recommend writing, blogging, or creating a YouTube channel. It will be the grind of your life, but you will start to accumulate wealth over a few years. 

Meanwhile, work your tail off at your job to climb the ladder and grow your income. Live below your means, start house hacking, and reduce unnecessary expenses. You may need to avoid going out with friends and family for a time. Your focus should be entirely on living on passive income. 

Living Overseas on Passive Income

Time to start reading. You aren’t going to escape the rat race without building the right mindset. To get into the right frame of reference, you’ll need to read books. 

Luckily, you can read my entire Signature Series 2 for free. Becoming financially independent will give you the mindset to leverage cryptocurrencies, real estate, automated business, royalties, and dividends. 

1. Financial Mindset: Become CEO of Yourself 2 (Free 196-Page PDF)
2. Retirement Planning: Your Retirement Planning Guide 2 (Free 255-Page PDF)
3. Investing: How We Plan to Retire on Dividends 2 (165-Page Free PDF)
4. Cryptocurrencies: Counting on Crypto 2 (Free 159-Page PDF)
5. Real Estate: Financial Independence through Real Estate 2 (Free 123-Page PDF)
6. Business: Retire Rich, Retire Comfortable with a Business 2 (Free 185-Page PDF)

Conclusion. By working for income-producing assets, you are setting yourself free one rent payment, dividend, or royalty at a time. Your family and friends will not understand your mindset, but that is okay.

Your job is to set yourself, your spouse, and your children free from the rat race. With the proper mindset, you’ll be able to lead an extraordinary life of fun and adventure.

However, this great adventure comes after years of downgrading your lifestyle, working hard at work and after hours, saving and investing, and putting your future ahead of the present. 

Most people do not want to go through the tribulations of building wealth. It is far too easy to exchange time for expenses. If you’re going to have different results, you’ll have to take a different path. Good Luck!

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6. Cryptocurrencies: Counting on Crypto 2 (Free 159-Page PDF)
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8. Business: Retire Rich, Retire Comfortable with a Business 2 (Free 185-Page PDF)
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing