Why you can’t buy back your time … yet.

A lot of people have the dream of retiring early and being able to live their dream. But unfortunately for a lot of reasons this dream remains just that. A dream.

With life changing at faster rates, personal risks and pressures are higher and opportunities to break free seem to be vanishing at the same rate.

Things were different twenty years ago

To say that things were different back in ‘the day’ is a cheap comment to make. Of course they were. 20 years ago, the internet was slow. Mobile phones were an emerging technology. The fax was still around. Daffy duck was able to reference himself by colour.

Related: A Letter to Parents

But nowhere have things changed with a larger impact to personal living than when it comes to being able to accumulate asset based wealth, particularly for your financial future.

In 2019 the average price of a home is $808,800.

In 1999 the price was a paltry $227,900

If you were in position to get yourself into property 20 years ago I have no doubt it would have been a scary time. The decision to make such a large purchase or investment would surely have been nerve wracking. But 20 years ago this is what happened.

For twenty-somethings today, a property at this price is barely within comprehension. Especially when inner city property is going to $12,500 per square meter.

Related: Wilful Ignorance and why you have to read this

Mortgage Income ratio

One statistic that truly shows how difficult it is to purchase your biggest asset is the Mortgage to Income ratio.

Knowing the average price of a house in 1999 at $227,900, but the average salary at that time was $44,964 per year. At this time the Mortgage income ratio was 5.07 or the value of the home was 5.07 times greater than the income.

Before that in 1979, the Mortgage Income ratio was only 3.10 where the home was worth $38,000 and the income was $12,241 per year. Needless to say back in 1999, the 1979 situation would have been extremely attractive.

In 2019 the situation is far different with the Mortgage Income ratio at 9.54, which is bordering on the unaffordable.

And this is where we truly start to see why that dream of living the life you dreamed of can truly remain only as a dream.

The value of residential property is and has been growing at a faster rate than the salary taken home and as long as this remains the case the Mortgage Income ratio will continue to increase. The further this increases, the further your dream drifts away into fantasy land, and the further your future becomes compromised but;

This is only one situation.

The best ways to make money are the hardest to get into.

Anyone who has listened or read ‘Rich dad Poor Dad’ will understand the concept of Employment, Self Employed, Business Owner and Investor.

99.999% of people will understand employment – working for someone else, and for the majority of people out there and their income this is the most they’ll ever know.

Being self-employed means you’re still trading time for money, but instead you have control over how much you get paid.

Being a business owner puts you onto the other side of the employment equation and becoming an investor is the goal of where you want to be. This is where the money you have does the work for you, and where you can have your dreams. But it comes with a big fat asterisk.

You need money to start with.

And today, now and tomorrow, the best ways of making money to secure your future through investing either in property or even through stocks means that you need money to start with. You need seed money.

The answer here is relatively simple; Get a job, albeit this puts you back into the time trading game or to start your own side hustle in order to get that seed money.

The added question is how much seed money do you need?

To buy the average property you’ll need $160,000 just for the deposit on the average residential property. To get into Stocks and to make a good go of it, you’ll need the better part of $60,000 and the education to know how to play and navigate the markets, just to mitigate risks. You’ll also need to put the effort in.

In fairness I have to say there are other ways to invest and gain cash flow, but there is no silver bullet out there. If you don’t have seed money today, and the job isn’t getting you toward it, the job won’t work!

If you can’t buy into investing – manufacturing cash flow is your only option

Let me say that again. If you don’t have seed money today, and the job isn’t getting you toward it, the job won’t work!

If you want to live your dream and who doesn’t, then there is an absolute need to stop thinking ‘job.’

This is where the side hustle comes in. The ‘Job’ is a poor financial performer and earlier figures show that it’s performing worse than ever before. When Investment is too far away the side hustle is an extremely effective way to manufacture cash flow. And cash flow is what you need to buy back your time.

Related: The Mindset shift to being your own boss

Make no mistake there are ways to generate cash flow, some of them can take time to mature while others are more exotic, but the one thing that generates cash flow is value. And there is nothing more valuable than what you know. And everyone knows something valuable.

Related: Why you should not trade crypto

What you know is what will solve real world problems and the bigger the problem the more valuable it is. The more frequent the problem the more opportunity there is to capture it. When your knowledge is captured into a specific educational business model, the opportunity to take your knowledge and turn it into a highly leveraged cash flow machine becomes a real possibility. And this is what will allow you to make your dream a reality.

Related: Why being an educator means you have no competition

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