Monday, July 16, 2007

Multiple streams of income (part 2)

Wow, there are definitely some negative thinkers here:

I have a number of friends who quit jobs to start a business or new career and fell into the trap of thinking that they could make a living doing something they love.

Did they make the appropriate lifestyle adjustments? You can't just jump jobs and then expect to live the same lifestyle. When you start a business doing what you love your whole lifestyle has to change. Usually, the trap is thinking that you can change one fundamental part of your ecosystem (your job) and then have everything else remain stable.

Karl Katzke:
“it’s better to be liked than to be good.”

Isn't being liked part of being good? If you're twice as productive as the average worker bee, but you're a jerk and no one wants to work with you, then you're not very good at your job.

And let's face it, if you're amazing at what you do and the average guy next to you is getting the pay raise instead of you, then you should be asking for a pay raise to match his. If your bosses don't think that you're worth it, then it's your job to find a new boss that does. Yeah it doesn't seem fair, but that's just the way it works. Truth is, if you really were amazing at what you did and you were underpaid, then your departure has cost the company more money than the pay raise would've cost them.

So not only do you get more money, your old company is actually going to start losing money (I guess it seems fair now).

Brip Blap:
If you want to succeed as a wage earner, you have to put a LOT of effort just into your job.

Depends on your definition of success. If I work 40 hours weeks for 40k and you work 50 hours weeks for 50k, is that really success? Sounds to me like you're just getting paid for the privilege of working an extra 10 hours/week.

I figure that success is all about getting more done in less time. Having to put in overtime is just a bad sign for everyone involved, it either means that the company is not bringing in enough money, or that the guys at the top at reaping more benefits.

So maybe you need lots of EFFORT, but more effort is not about giving more time, it's about getting more done per unit of time, which is really what you want to do anyways b/c you want more money.

So how is more efficient work time any different from more efficient investing time? Maybe you can make more "extra money" spending 5 hours on your fund picks than you can by spending 5 hours on "professional development". But there's a break-even number here and you should figure out what that is, I mean otherwise you should be investing full-time b/c you'd make more in 40 hours of that than 40 hours of work.

So, we have the comments about the long working hours to climb the corporate ladder. I think employers are expecting more and more for wages that decreasing relative to costs.

Well Deborah, from a global standpoint, anyone in North America has been living well beyond their means for decades. The economy is Globalizing which means that we're flattening out the economy and flowing money from rich countries to poor ones. Of course, we're the rich ones, so money has to be flowing elsewhere. So over the next several years (at least) of the rate of increase of our standard of living will probably slow, but our standard of living will still be increasing.

Short term, things may seem like employees are losing ground, but long term, these don't seem to be much more than variations. After adjusting for inflation, median salaries haven't really shifted much in the last 30 years. Meanwhile the average household has more square footage/person than 30 years ago, we have commodity computers, way better health care, cheaper air travel, safer / more efficient cars and commoditized access to things only in sci-fi books at the time: Internet, portable music players, digital cameras. Now sure, the last 2 or 3 years have seen increased profit margins (so employees are getting less than they could), but this stuff doesn't last forever.

100 years ago there was no "retirement", so the very fact that you can even envision having enough money to spend several years or even a couple of decades doing nothing "productive" is actually quite a feat. Heck it's a feat that you even have that many decades in sight. Average life span in 1907 was about 47, you didn't even have decades to piss away. Here's a neat link with more info.

So this whole "employers wanting more for less" thing may be a sentiment, but it's really hard to back with any kind of numbers. Do you want more than last year? More than 10 years ago? More than 30 years ago? Or more than 100 years ago? Your statement about employers expecting more and more is probably only true for time spans less than 10 years. B/c I'm sure living better than my parents were 20 years ago.

As to the whole corporate ladder thing. What the heck is that anyways? Maybe it's just me being a 20-something, but there is no single corporate ladder out there.

There are people I listen to and people that listen to me. There's income I generate and income I get paid. If I'm not getting my cut of generated income, then I find someone who will give me my cut or I go out on my own. If I'm making less than the people that listen to me and I'm doing it for too long, then I leave.

Corporate entities do not need you for anything other than your abilities to generate income and your abilities to lead income generators. Most of us are streams of income for the companies we work with. They owe us as much loyalty as the income we bring in and we likewise owe them as much loyalty as the income and lifestyle they can afford us.

If no amount of increased efficiency will earn you your next raise then you've hit the end of your job with that company. Your new job is to find the company that will afford you the next raise for the money you bring to the table. Because that's what you are, you are a stream of income, you are to a company what a stock pick is to you.

So let's skip this whole corporate ladder paradigm. Your ultimate goal is lifestyle and happiness enhancement. Your worth to the company is the money they can make off you and the company's worth to you is the lifestyle they can afford you. You are a commodity to the company and they are a commodity to you. Anything that you do that does not respect this relationship is doomed to failure.

1 comment:

SavingDiva said...

I guess in a perfect world, I would work about 20 hours a week (currently I work about 50) for about $200k. :) Keep dreaming!