Goal: Increase Income Per Hour of Work
If you consider long term financial goals, there aren’t many that should earn your attention more than the goal of increasing your hourly pay. At first glance, this might seem simple, but it’s much more than increasing your wage. Increasing your hourly income can be done in two ways: increasing your income or decreasing the time required to earn that income. Ideally, we can do both.
If you work an office job or a corporate job, you undoubtedly have figured out that there is an incredible amount of time wasted during these jobs. I would guess that most employees could do the same amount of work in 75% of the time that they actually are at work. Unfortunately, many employers frown upon leaving work early or anything different than the traditional 9-5 work schedule. How 20th century of them…
If you’re able to convince your boss or employer to grant you the freedom of being judged more on your results and production rather than the time where you’re sitting at your desk or in your cubicle, you might have the opportunity to increase your hourly income by decreasing the number of hours you are on the job. If you’re fortunate enough to give this a try, make sure you surprise your boss to the upside to potentially grant you even more freedom because clearly, this freedom thing is resulting in more productivity. Who knows, your boss might tell you to start working remotely every day.
Cash Flowing Assets
Obviously, passive income or cash flowing assets definitely increase your income per hour of work because these assets typically take either no work or minimal work in order to maintain them. Whether your focus here is a portfolio full of dividend paying stocks, cash flowing rental properties or cash generating websites, developing cash flowing assets should definitely be a part of your strategy.
The Cost of Working
Another area that impacts how much income you’re generating per hour of work are the expenses that you incur by working. The most common expenses here are gas (commuting), work attire, eating lunch out, coffee breaks, parking fees, dry cleaning, etc. We don’t think about these much, but these are real cash outflows that are taken right out of our hourly wage.
For example, I have an entire wardrobe of work clothes that I wouldn’t buy if I didn’t work in a corporate office environment. Sure, I’d own a few pairs of slacks and dress shirts, but they would be for rare occasions. Also, I’d spent close to zero each month on dry cleaning instead of close to $50 each month. Grooming, gas, lunch, coffee, they would all decrease. Heck, you could maybe even sell a car if you didn’t commute to work (if you are a two car family). I recently did an exercise where you calculate your real hourly wage based on factoring in all of these costs of working. You might be surprised at what it is.
The Real Goal
The ultimate goal here that this goal is hinting at is working for myself and/or being financially independent. Free from a job, free from a boss, with assets in place to generate income without having to commute to work, work a 9-5 schedule 5 days a week, and spend money on silly work uniforms to feel more official at work. Now, don’t get me wrong, I don’t not want to work. I just want to work more smartly and on my own terms. Building a portfolio of online income streams and developing serious investment skills are a means to this end.