If you’re the kind of person who is interested in running your own business, there’s no doubt you’re a proactive, motivated self-starter. After all, here you are putting in the time to do your own research and get a better understanding of the nature of the business. It is a hallmark of the self-starter mindset to be willing to work hard for a long time – as long as it takes to get the job done, in fact.
You’re not alone in this – in fact, polling has shown that people who own and manage their own businesses tend to work well above the usual rate, with almost half of all self-employed workers clocking in at over 44 hours per week. Now that’s dedication! And you do have to respect people willing to put in such long hours to achieve success in their goals.
But as the cliché goes, it is better to work smarter rather than work harder – which isn’t to say that hard work has no value, of course. But while there is no limit to the amount of money that can be generated (money being, as it is, just an artificial system of accounting), there most certainly is a limit to the number of hours in a day, or a week, or – most importantly – in a life. Even if you are able to set your hourly rates to sky-high levels, you are still facing built-in limits from the nature of reality, and Star Trek aside, reality’s laws are not so easily violated. No matter how hard you work, you will hit a ceiling. It’s only a matter of time.
That’s where working smarter comes in. By working for yourself and generating your own personal, independent earnings stream, you’re already taking the most important step towards financial freedom and security. But while the first step may be the most important, you’re embarking on a lifelong journey. One way you can advance on that journey is by taking advantage of a concept called “passive income,” also known as “residual income.”
While you may not be familiar with the term, passive income is something you’ve probably already experienced. If you have a bank account that pays you interest, or a savings bond from your childhood that you allowed to mature and then cashed in, you’ve experienced passive income. Rather than trading your time for money – the standard transaction – you’re doing work once (putting money in the savings account) and then allowing that work to continue to earn you money (the interest on the account) with or without additional input on your part. Other examples include collecting dividends from shares of stock that you’ve purchased, collecting revenue from your business associates in a multi-level marketing business, generating ad revenue from a website, or collecting revenue from operations through franchising. Any situation where you can put your money to work making more money for you is a good opportunity for generating passive income and bolstering your personal, independent earnings.
With that in mind, it’s clear that the smart money lies in keeping your eyes open for business opportunities that offer you the ability to develop your personal, independent earnings whether or not you’re “on the clock.” You not only want to be paid a fair and representative value for your labor; where possible, you want to set in place systems that continue to generate value for you even when you’re not actively engaged in developing that value.
People say work smarter, not harder, but the successful entrepreneur knows to do both!
