It seems that everyone in America has one dream, and that’s to live the “good life”. Average Joes step outside their door each day and are disgusted by their ugly landscape, their cracked driveway, and the paint that’s flaking off their house. “Where did I go wrong?” they ask themselves. “Why am I so poor and someone else out here has millions?”
Believe it or not, the answer is most often not intelligence. Those that are wealthy typically have an average IQ and don’t appear to be extraordinary in any way. The only real difference is their understanding of money accumulation.
How Does the Average Joe Earn a Living?
The average Joes in this world all seem to have the same views of wealth accumulation. They figured that the way to wealth was a good education, a solid steady job, and excellent benefits. You may have heard this same story as well. I know I heard it from my parents. But, quite frankly, this advice is wrong!
Almost everyone I know has taken this route and you know what? Nearly all of them are living mediocre lives and are dependent on next week’s paycheck to survive.
How Does the Average Joe Try to Get Rich?
Occasionally, an Average Joe makes up his mind that he’s going to be rich. They normally take one of the two avenues below:
1) Work Extra Hours – they either take on an extra job or put in a bunch of overtime at their current place of employment. This does yield extra income, but it’s going to make you dead tired and will only earn you an extra $1,000 or so each month. Plus, what if you want to earn another $1,000 a month beyond that? There’s just not enough time in the day.
2) Jump Into an Expensive Business – Average Joes sometimes assume that true wealth is found by owning a business on that busy street corner. They’ve never worked for themselves before, but without regard, they take out a $250,000 loan to run their own store. Soon, they find that the hours are long and the income is negative. Oops… This is not the avenue of the wealthy.
What About the Stinkin’ Rich People?
I know one man that’s stinkin rich (he makes over $1 million a year), and he has no college education whatsoever. He doesn’t have a steady job with a pension plan either. And, his initial investment in his business was $265. That’s right, $265. It’s not a typo.
Stinkin’ rich people understand that a large initial investment is often not necessary to develop a large profitable business. The key is this: rich people begin businesses that can be profitable without them.
A wealthy man may have made his riches by building an online business that earns $1,000 a month. Of course, this yields only $12,000 a year, but since his business runs smoothly without him, he can simply repeat the process. After the first year, this man built a very similar business that also earned $1,000 a month (now he’s at $24,000 a year). He knows what he’s doing now and is able to start 3 similar businesses within the next year. Each of them is earning (yep, you guessed it) $1,000 a year, which puts his earnings at $60,000 per year. After a few more years of this, this gentleman could easily earn $250,000+ per year.
The Difference
It’s actually very simple. The Average Joe believes they are special and cannot be replaced. They take great pride in their work and can’t imagine anyone doing the job better than them. This is all well and good, but here’s the problem: in order to get wealthy, you must take yourself out of the equation. If you can figure out how to make a business run smoothly without you physically being there, then you are about to get wealthy my friend.
Are you on the road to wealth? Or, will you be an Average Joe forever?
{ 30 comments }
Interesting thought! I agree that taking a risk has nothing to do with intelligence or education. There are smart college drop outs like Zuckerberg or Gates who build successful businesses. Theere are even more unknowns who are successful too. Not everyone is an entrepreneur, some like the security of a job or career. We need them too.
My success in business did not take a college degree, but it did take an lot of other traits they do not teach in school.
You’re right. Not everyone is an entrepreneur, but they should realize that if they want to acquire wealth, it most likely won’t be found in an average job. For some reason, this is often what student believe, and it’s absolutely not true!
It is unlikely that you will get rich without either leveraging money or time in some fashion.
You’ve got that right! Very few will be lucky enough to make $200,000/year with a job. Most will live mediocre lives with mediocre income.
I Agree with this – you’ll need to do quite a bit of work to get rich, but it is possible and is doable, but it’s not just through becoming a business owner. Doing that is one way, but it’s hard.
There are very few rich people that work a job. Most of them are business owner in some form or fashion. Yes, it is tough, but at least you don’t have a cap on your salary.
I used to dream of ‘jobs’ in which I’d trade my time for money — that’s how we’re taught to think when we’re young. Now I dream of owning assets that produce income without any input (or minimal input) from me. So far I own one asset — my first rental property. Will I expand? I hope so. Check back with me in 2 years!
You are right! When we’re kids we’re praised for wanting to be a policeman, a lawyer, or a teacher. I mean, what kid is taught to be a business owner? Sadly, there are very few.
Great post! It is so true that you can start small, and earn big. If you start big, you can really run into trouble.
I am all about starting small. If it’s meant to be, then your business will grow into something huge, but if it’s not at least you didn’t lose very much money!
I don’t think you have to live a mediocre life if you work for a living. Not everyone is an entrepreneur and, honestly, our capitalist society would fall apart if we were. Businesses need workers.
I think the real problem is that we have built a society where the workers are dependent on next week’s paycheck in order to survive. I have no desire to be rich. I simply want to get to a point where I don’t need next week’s paycheck. And I don’t think I should have to start my own business (most of which fail) in order to get there.
I agree with some of what you are saying. You’re right, not everyone is cut out to be a business owner. Some people enjoying working a job. They just won’t ever enjoy a life where money isn’t an issue.
As for your dream of not living paycheck to paycheck, I think that is a weak goal. While I understand you don’t need to be a millionaire, but at least dream about being debt free with a large emergency fund. Not having to think about money makes life so much more enjoyable.
I guess I wasn’t clear. I don’t live paycheck to paycheck. My dream is to not NEED that next paycheck or any paycheck- ie to be able to retire and not worry about how I’m going to be able to pay the bills or do the things I want to do. I think that’s most people’s dream- not to be millionaires, but to at some point be able to say, I’m done with working, and I no longer need to work to pay my bills. And I think we need to build a society where that is possible for most people, including the ones that work a job.
I get it. Yes, I’m sure that reality would be welcomed in every home. Hopefully, most people are making the decisions necessary today to make that a probable outcome in the future.
I’m on the road to wealth! But, I used to have an average Joe mentality. working harder and not smarter is definitely not the way.
Congrats for coming over to the wealthy side! Sounds like you know what it takes, and I’m sure you’ll get there!
Nice one Derek. Man, I’d love to be that guy who earns $1mil+ after a $265 investment!
He definitely didn’t sit on his butt and hope his investment grew. He worked hard every day! After 6 or 7 years of that, and he’s now able to take 6 month long vacations and stuff. It’s quite impressive.
I don’t know where I fall on this spectrum. I don’t know that I have an entrepreneurial mind but I definitely am not going to get anywhere being stuck.
I do think, though, that isn’t in absolutes. There are plenty of people who amass wealth working for someone else. There are lots of people who enjoy the comfort of working for someone else. Not everyone is meant to run her/his own business. And I don’t think there’s anything wrong with that.
You’re right. Not everyone is cut out for entrepreneurship, but for those that simply want to work in a job, most likely they aren’t going to be stinkin rich! 😉
Wow, that’s impressive! On one hand I want to be that man…. on the other, I am fine with mediocre – but not in the way that you mean. I am now working towards earning a decent income with little maintenance. Needless to say, I was inspired by some fellow Yakezie’s. If all goes to plan, 2-3 years I will quit my day job and be making more money! MY goal is not to be stinkin rich, it is to have a decent income that frees me to do what I want!
Making more money simply means more options. It is a beautiful thing! 🙂
You’re talking about where all of us want to be, but only a few have the real drive to do it. Hard work is too often overlooked as the key ingredient to success.
You are soo right! It takes a ton of hard work to succeed in the entrepreneurial world! If you have the drive though, it can be well worth the efforts. 🙂
Great article! I agree with a lot of it, but a big factor is also how much of your income you spend, how much you save, and how you save it. Are you familiar with the Millionaire Next Door? (I’m new to your blog, so if you’ve mentioned it before I apologize.) The book discusses how people become millionaires, and most of them are entrepreneurs or professionals like doctors or lawyers who own their own practices. They’re also not generally the ones who earn seven figures or even necessarily high six figures a year, but they don’t live frivolously or try to live a “rich” lifestyle. That’s what I’m aiming for. I want to be a millionaire next door.
You’re right Penny. Increase your income and decrease your expenses, and that’s a sure-fire way to become a millionaire! If done with a job though, it will most certainly take a lifetime to get stinkin rich. But, if you’d like to wait that long, then that’s just fine! I’m not sure I can be as patient. 😉
I love the idea of being stinkin’ rich but I think being comfortable and be able to call my own shots is priceless to me. I think there might be too many people on the hunt to be millionaires later on in life that they forget to be comfortable in the present.
It is important to treat yourself in the present, but never forget about what impact that will have in the future. 🙂
“The Average Joe believes they are special and cannot be replaced.” Nice catch! Let me get this straight, are you describing passive income? 🙂 You nailed it. Average joes work hard and exchange time for money. Wealthy work smart and aren’t even in the mix once they set up properly!
Yep. And also, why would anyone depend on only one source of income? They must not think they’ll ever lose their job! In today’s world, this thought leads to bankruptcy….
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