How To Leverage Time

When the average person thinks to themselves,

“I need money”

They typically think about earning some money. They think,

“I’ll get a job”.

This means that they intend to trade their time for money. Most jobs offer a set wage in exchange for a certain amount of hours. This has been the way it is since the industrial revolution. However, this creates a few problems:

Only So Many Hours in a Day

We all enjoy the same number of hours in a day. Bill Gates and Warren Buffet and all of the super-rich elite have exactly the same amount of hours in a day as you or I do. So how do they make so much more money than me?

I assume you would think they make more per hour than me because they are doing super-important stuff. But that is only partially true. They have learned how to leverage time.

Valuable tasks

You may also believe that they are spending their time doing far more valuable tasks than are humanly possible. Maybe, but there is only so many tasks in the world that are worth billions of dollars. I can’t seem to think of any right now, but I’m sure there are some.

Parallel Processing

The secret here is to have multiple streams of income. Wealthy people spend their time creating a business or asset that generates income. Then they move on to the next thing. While they are spending their time working on the next project, the old one still earns income. Eventually, you could have multiple income streams from several assets that work in parallel with your current efforts. This way, it is like cloning your efforts. You are putting in 8 hours of work, but the past version of you is also putting in 8 hours. Actually, the “past you” is putting in 24 hours a day, because when you create an income producing asset, it never stops working (unless you neglect it completely). You may need to spend a little time maintaining this asset, but it works without you most of the time.

Example

You save up money to purchase a piece of rental property. You have spent time earning the down payment, searching for the right property, and vetting prospective tenants. You work hard to get the mortgage, fix the place up, and sign the lease documents. Once you have a suitable tenant in place, who hopefully is paying you enough rent to cover your expenses, you now do not have to invest much more time in that asset. Yes, you will still have to collect the rent, fix the odd toilet, and pay property taxes. Eventually you may need to find a new tenant if this one moves out, but it is not going to be a full time job.

It is at this point you move on to the next asset. You find a new property to rent, and invest the time and effort up front for the down payment, etc.

You can keep repeating this. The income stream keeps multiplying every time you buy a new property to rent out. The time you spent in the past is still paying dividends. The time you are investing now is generating some income, but the time you spent in the past is too. You are now receiving money for time that you invested in the past and the time you are investing now.

If you decide to stop putting in time, you will still receive income. This is the difference between spending time and investing time. This is the difference between earned income and passive income. Of course, many types of income producing assets require time to keep running, but that is very dependent on the type of asset you invest in. If your income producing asset is a business that requires you to function, then it is just a job. You are still trading your time for money. A good example would be a massage therapist or a consultant. The secret to creating passive income is to acquire assets that produce income on their own, without you needing to contribute your time everday.

Real estate is a great way to create income and leverage your time and money. Many types of businesses are able to generate income without much intervention, once the initial setup is complete.

In my books, I talk about using dividend bearing stocks to create passive income. This is the ultimate in passivity as they really require almost ZERO time once you own them. You are investing in someone else's business and you are leveraging their time. They pay you a percentage of the profits from their business and it is taxed favorably.

Peer to Peer lending is another way to create passive income without having to put in time once you own the asset. If you look around, you will find many great ways to create passive income that don’t require your time after the initial investment.

The investment of time on your part is earning the money to invest in the first place. If you are currently working for a wage, think about this job as your upfront time investment. Once you have enough income coming from passive income sources, re-investing that money back into more assets creates a compounding effect. Now the up front time investment becomes smaller and smaller, as you now have your money working for you. You are no longer trading time for money, you are having your money put in time for you.

This is how you leverage time. You invest time up front to create an income stream and then you move on. The downfall of most people’s mindset is that they think in terms of linear time. They assume they can only earn money for every hour they are putting in right now. If they stop putting in time, they stop earning money. This sounds a little like slavery. You are beholden to a job because if you don’t show up you don’t have any money. There is another way. Leverage time.

Time is Money, Money is TIME

I believe, as many people do, that the primary benefit of wealth is time freedom. Having passive income gives you back your time, which is truly our most precious asset. Ask someone who is 90 years old if they could choose between 10 million dollars or to be 20 years old again, they will choose the time option every time. So always treat time like an asset. If you spend it, you will eventually run out. If you invest it, you will receive more.

If you are looking for ideas on how to earn passive income, please have a look at my Top 5 Personal Finance books article. In these books are the secrets to real wealth. I also recommend you read Financial Freedom and Unscripted. These two books will rock your world.

Of course, I would love it if you read my books to learn how to create passive income by using a combination of techniques I have learned over the years. I have distilled 30 years of investing trial and error into a workable plan that anyone can use to start building real wealth. I also have created an online course that gives you a step-by-step blueprint for building your fortune with the money you already have.

Invest your time wisely. I wish you success.