Real Wealth Comes From Owning a Business

(edited)



(Courtesy of 99signals)

Naval Ravikant has a very clear view of working through financial freedom. Today we will look at his view through examples and decide whether Naval is correct or his view is just a pony show.

Employment Towards Financial Freedom

In most modern time peoples' careers start at getting an education up to college level and then get a paid job. From there work for 40+ years and save for retirement at around 67.5 years. At that point if they do retire they have technically reached financial freedom. Yet what if a person wants to achieve the financial freedom earlier and earn more even before they reach retirement age? This is where Naval explains that people who own businesses have the best chance of reaching financial freedom.

Employee as a Bricklayer

(Courtesy of homebuilding.co.uk)

In construction if you are hired to be a bricklayer you earn a hourly salary. The work you do is not very skilled so the pay will not be high. Meanwhile the accountabilities for being a bricklayer are toward mainly your boss and no one else. Specifically if you do not do a good job you answer to your boss where he or she is responsible for overseeing your work.

General Contractor

(Courtesy of istock building contractor)

Moving up a step in the working ladder would be working as a general contractor (GC). The GC manages people working trades and require more skills than a bricklayer to perform. As a GC pay is higher than a bricklayer because of the increase requirements and increase accountabilities. Still as a GC you would be getting paid a salary.

Developer

(Courtesy of mashvisor.com)

The next level above a GC is being a developer. As a developer you oversee the cost of the project, work toward getting funding for the project, and manage the GCs all workers on the project. A developer has more unique skills than that of a GC which makes developer's salaries even higher than that of GCs.

Venture Capitalist

(Courtesy of entrepreneur.com)

Then there are venture capitalists who specializes in real estate that may have multiple construction projects that they oversee. This means venture capitalists are held with higher accountability since they work on multiple projects. With more responsibilities comes more pay.

Opendoor Real Estate

(Courtesy of Dallas Daily News - Opendoor Story)

To get one step future is to open a company that manages real estate properties just like the latest and great Opendoor platform. In essence users of Opendoor are using leverage and computer skills to earn more.

Conclusions

Each step in the ladder towards earning more in construction business comes down to more earning if your position requires more skills and more accountabilities. In any of the positions from developer to Opendoor owner there is the opportunity to owning one's business. Naval said it best. With owning the business you get the unlimited upside while having a salary you are fix to the amount of earnings given to you.

None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!



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10 comments

Many people are conditioned to climb the corporate ladder. While there are few who realized this and prefer to build their own ladders for other to climb.

Thanks for sharing.

!1UP

0.02895890 BEE

Great analogy and agree. By the time ones that climb to the top of the ladder they may think they wasted a life climbing since that’s mostly where theirtime was spent.

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I don't think it's always just businesses. In a way, as businesses grow, they also need to understand how to scale. However, I do agree that a business does help but I think an idea such as investments can replace a business.

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Idea here is owning the business so no cap on profit. Investing in businesses I agree can be a substitute but in this case the profits and split !LOL ! wine

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Businesses is always best for anyone and i appreciate what you said here. Good day.

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Owning a business can be a lot of work but the ownership is what removes ones ceiling on earning potential. !wine !LOL

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@mawit07 I hope you don't mind, I would like to know if the images are:

  1. free to use images
  2. paid and use bought them
  3. paid images but you don't buy them and used them.

Feel free to answer this or ignore this comment. I wish if you sourced them or written this information somewhere I wouldn't have to ask this out of curiosity.

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My apologies for not sourcing image sources and will do so for posts from here on. I edited the post to include link to source. I use google image search for the images and will from now on link original source. Thanks.

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!PGM Reblogged

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A bit overrewarded, also don't forget to source images you use in posts.

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Will do link sources for images used in my posts. Thanks.

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