Setting your value
Our society has built a capitalist infrastructure unlike any the world has ever seen and it allows us to create jobs nearly endlessly, at the time of this writing unemployment is at a historic low. M
Throughout my entire life, I’ve been taught that in order to make good money I should go get a good job, it seemed that entrepreneurship and capital investing are considered nearly luxury methods of making money. These things and others have compounded and been baked into our culture to create a very entitled way of thinking:
“I’m not doing any work unless I’m paid for it”
While this statement is written specific enough that maybe many people think they aren’t guilty of it themselves, it’s my belief that almost all of us are guilty of this, and we need to break free of it. The problem is that we have set up our society in a way so that we negotiate salary at the start of employment, setting a standard of value, no matter who applies. This runs directly counter to how investors and entrepreneurs make money, by investing capital and taking on risk up front than working to create a return afterward. In traditional employment the employer has to take all the risk: an unknown employee only vetted by resume and a few hours of interview, and they have to commit to putting up all the capital before a single finger is lifted by the new employee. It would be extremely short-sighted to think that this behavior on such a large scale doesn’t directly affect the mindset and expectations of our population, of course, it does and it’s obvious if you look at how people invest their time.
Some people will tell you it’s because “kids these days are so entitled”, which is obviously false, people today aren’t different than they were 12,000 years ago. As a country, we have been fortunate enough to create a system where we can assign a value to someone’s work BEFORE they actually go to work. While on a whole this is fantastic for our society, but as an individual it’s misleading and a hindrance, what if a person is worth more than the set value of their job? This “equality of outcome” style of economics strips people of having to take the risk or the burden of having to prove for their worth in the marketplace, it results in people taking less risk, and being less willing to work without a financial output guaranteed beforehand.
You don’t have to know where it will lead
If you want to make $100,000 a year, you can search jobs that pay that amount, find the credentials needed to qualify, get them, and then you’re done. Why is this a problem? Well, what if one day the job no longer pays $100K? What if the industry goes into decline? What if when you get done with all the credentials and you find out you hate that line of work? You haven’t taught yourself how to be competitive in the marketplace, you’ve just learned how to follow guidelines and apply known steps. At absolute best, you’ve limited yourself to the $100K salary you wanted, and even if you earn it, is that the pinnacle of your dreams? What about everyone else who’s chosen profession pays far less? What if you get your dream job, and your assigned salary and find out you work harder than everyone else, but can’t get a raise equivalent to your increased worth ethic?
You must take the risk of the unknown in order to succeed. Having a job which guarantees a salary also means you’re a prisoner to that salary. Creating something new has limitless potential for income, but also self-worth, and self-respect. Going to college and lining up a predetermined job with a guaranteed salary is EASY, and to be fair in many ways this is good, certainly for society as a whole, but it’s not good for the ambitious person who wants something out of life that isn’t pre-determined.
Jeff Bezos didn’t know what Amazon would become, but he saw potential and committed FIRST. Before he was a household name, he was grinding for his company to grow, when the probability of it failing was actually much higher. If I didn’t start this blog unless I could guarantee an income from it I would never have written the first word, to my own detriment, even though I haven’t taken in a dollar from this site! If we change our thinking to look at the value of the work first and believe in the value of our output, our potential to earn income will match.
When I first started building my real estate portfolio I decided I wanted 10 houses in 10 years, this would fund my retirement but the goal was way too small. I see now that setting such a small goal is limiting, just like if someone offered me a set salary, I’ll only work as hard as I have to earn that salary. I no longer want to get 10 houses, I’ve learned instead to just love the process of real estate portfolio building. Now I am unshackled from my limits, my potential is unlimited, the pressure is off, and the possibility for bigger gains has been opened.
Don’t chase a paycheck, chase creating value. If you do that the money will work out easily.
Trying really works, who knew?
For years of my life I tried very little, I just did what my jobs and society told me I was supposed to do. If I were to be really honest with myself though, I was doing the minimum standard of their expectations and perhaps it was even below the minimum of their expectations, maybe it was the minimum amount of effort just to keep from getting fired. I wasn’t maximizing my value for myself, and I wasn’t maximizing my output for the employer, it was a lose-lose situation really. Complacency runs rampant in the absence of excitement.
It wasn’t until a few years ago when I picked up real estate and realized I could do a lot of work to get better at it, with no guarantee of success and yet it started to produce returns anyway: big ones. How much work was I doing really? I was just reading and listening to other people’s’ success stories, it was nearly effortless but it changed my life significantly. I wasn’t working very hard to improve, but I was at least trying for once. I was interested, I was loving the process, and when you enjoy doing something you don’t really care if it’s profitable.
Somewhere along that way I started putting this together: when I didn’t try at life I was not that happy, I had no growth to enjoy or look forward to, and it was unfulfilling. Trying a little bit though, in ways that weren’t even that hard started to add up to big results. Learning something new would ping my interest, give me an increase in intellectual confidence, and encourage me to learn more. Reaching out to people to create new relationships was easy, and the rewards were huge. I was making new friends, learning from them, and leveraging our combined resources to get more done. I started applying this to other areas as well, my relationship, work, and anywhere else I could. Trying to get better, all the time, at everything. It seems so obvious but the reality is most people don’t try at all, at anything, ever!
When I ask people these days “what’s new? How is business? What are you working on lately? And they answer: “not much, same shit different day” I start to worry, how can someone having nothing new going on, and be getting better at like? My fear is that this is not possible. Cruising through your work day, waiting for the weekend, and not working on any big projects to invest your ambitions on is a mistake, a grave one. It’s imperative to consistently try hard, at everything, and it has to be done without a promise of a future payout, otherwise, you’ll never work harder than the assigned value.
Small wins add up
People get better when they struggle and overcome adversity. This is the basis for how we develop competence, self-esteem, and our self-assuredness to tackle bigger tasks. Most successful people aren’t just walking around closing big deals in one fell swoop, it’s a culmination of lots of small tasks compounded into something huge. You don’t need big wins to get ahead, you need just need lots of small wins.
Buying houses seems like a big accomplishment to outsiders, but it’s deceiving because while closing may take a single day, buying a house takes lots of small unseen wins beforehand. Searching for houses, preparing a lending strategy, making sure my property manager is on board and likes this unit, all sorts of stuff. I also had to read enough books to ensure I feel confident I can pull it off. Once the house is closed I need to find a renter, keep the place occupied over the long term, and I need to reinvest the profits to the next deal. All these tasks are a part of the small wins needed to make a rental property profitable.
The next time you meet someone who seems like they are killing it at life, try to see the small wins it took to create their success. Try to think of things you want to accomplish not as a large daunting task, but a series of small wins you can tackle, each separately. Don’t limit your value to what the market sets it at, forget about salaries forever. Try hard at EVERYTHING, ALL THE TIME, and do it without the promise of reward. Focus your ambitions on a goal and chase them relentlessly, don’t love the money you may make, instead: love the process.