Make money while you sleep: Or Work Until You Die

John Cousins
February 7, 2023
5 min read

I always wanted financial freedom.

Why did it take me so long to learn how to get it? For the longest time I chased the idea that making more money would solve my problems and set me free.

I squandered that time chasing a mirage. The more I made, the more I spent. Our culture makes it tough to break out of the matrix and off the hamster wheel.

I yearned to be free of working for others. I wanted to be able to exercise my free will to choose what I wanted to do with my precious time and energy. I just didn’t know how.

I had all kinds of dreams I wanted to realize that were being crowded out by having to work for a paycheck. I was Johnny Paycheck. Not having a plan and seeing a way out made me sad.

It turns out there is not secret. We all know the way, at least the first important steps. We choose to ignore it in our futile search for a flashier faster way to achieve escape velocity.

Escape from Alcatraz!

Now after more than a decade of financial independence, I look back and it seems so simple. Simple but not easy.

There are four aspects to money and you need to understand and apply each of them.

Spend less than you make and save the difference. Live and spend mindfully. Frugality is about mindfulness and simplicity. Its freeing. The crap we own, or desire to own, ends up owning us.

The fourth step is the most important for wealth creation: invest.

You won’t get rich by saving.

You must put your savings to work through investing. You need to put the power of compound interest to work for you.

The magic of compound interest

Compound interest separates the rich from the broke. Albert Einstein said

Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.

Get into high interest debt and you are fighting against the force of compound interest. High interest debt like credit cards. Pay them off now and never go back. Get on the right side of compound interest: out of debt and into investing.

Don’t Argue with the Inevitable

Economic research shows that corporate profits flow to the owners of companies. It does not flow to employees in the form of increased wages and salaries.

This is because the rate of return on capital exceeds the rate of economic growth. Company owners win a steadily rising share of output as the rest of society gets squeezed.

You are not going to get rich working as a salaried employee.

We can complain and bemoan this state of affairs as being unfair. Or we can choose to accept it as the current existing reality. The choice is ours.

Our power lies in figuring out how best to get our share of those profits.

As James Russell Lowell put it:

There is no good in arguing with the inevitable. The only argument available with an east wind is to put on your overcoat.

One way to do this is to work for a startup and receive stock in the company as part of your compensation. This strategy can be very lucrative but also is very risky because you are tying your fortunes to one entity with uncertain prospects.

The best strategy is to invest in a bunch of companies with promising prospects.

The best argument is to invest. This is the best strategy because it is within our abilities to accomplish. We all can invest by spending less than we make and investing the difference. Its simple; simple but not easy.

Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty… I have never in my life envied a human being who led an easy life. I have envied a great many people who led difficult lives and led them well.

Theodore Roosevelt

Start thinking more like an owner, and less like a consumer and wage slave.

As Warren Buffett put it: “If you don’t find a way to make money while you sleep, you will work until you die.” That is the sobering reality.

Investing is the way to make money 24/7 while you sleep.

Companies are in the business of growing and getting more profitable. Hitch your wagon to world-class management talent operating high growth companies. Own them.

Make the shift from being a consumer in the economy to becoming an owner.

You do this by being an investor.

· Before you buy the Kindle and Alexa, buy Amazon stock.

· Before you buy the Tesla, buy Tesla stock.

· Before you buy the 4 pound chocolate bar or 12 pounds of nutmeg, buy Costco stock.

· Before you buy the Air Jordans, buy Nike stock.

When you buy Amazon or JPMorgan Chase stock, you become Jeff Bezos or Jamie Diamond’s boss. They are working to make you money as a shareholder. Think about that for a minute. Every time I do it blows my mind.

Their mandate as corporate CEOs is to create shareholder value. Investing is a sure way to increase your self-esteem.

Take control of your destiny. Put your money to work. Its your money, its time to take control.

Economic inequality is a serious problem. It is my fervent wish to share the world’s economic output broadly and equitably. That is a separate issue from participating in capitalism. It behooves us to become owners and investors to the best of our ability and circumstances.

Step out of consumer culture and into ownership culture. Learn to invest wisely and get rich carefully.

I am working on a new book about how to get out from under and make sense of the investment landscape. Please leave comments if this subject is of interest to you and what you would like to know. What about investing is intimidating or mysterious and needs explaining? Thanks!

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John Cousins
Author, Entrepreneur, & Teacher

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