The most common question we have received over the last month has confirmed that there is literally no competition to get to the top. None. The most common question is as follows:
“Isn’t it better to earn a smaller sum but be free to do what you want?!?!”
This is the most hilarious question we receive and we’re addressing it now. Excuse us for two seconds as we answer in a very immature fashion.
“ROFL LMAO at the guy with low standards!!!”
That is the initial reaction to this preposterous argument/question. But lets go ahead and see how this works out.
1) Run the Math: Lets assume you have a normal IQ. This means you know how to click “purchase” on securities. You know how leverage works and you understand how to do basic math. Now lets play a game.
Option 1: Decide to make $100K or so working for “yourself” after 3-4 years of building a location independent business. This means you’re working 24/7 just like any other business. You give up high income for freedom.
Option 2: Take an extremely high paying career and stack $200K+ per year. In Cold. Hard. Cash. You also have the optionality to start a business because you get bored relatively easily.
Back to the original point. Can you do basic math?
In 5 years, you’re going to get 7% returns on average… Year1… $200K… Year 2 $414K… Year 3… $642K… Year 4 $888K… Year 5 $1.15M.
So by year 5 you’re making 7% on $1.15M for literally doing nothing. $80K per year for zero hours of activity.
There you go, the financial answer is right in front of your eyes. In roughly 5 years, you’ve already created “location independent income” or *real passive income* and not a phony stream that requires actual time. Your zero hours of work is now equal to a decent online income.
For the worry warts… Maybe you get laid off in a downturn and your portfolio takes a 20% hit. Big whoop. You simply take a vacation, spend a few hundred bucks less and re-enter or move on.
By the way? Practically every business will take a hit during a recession anyway.
2) Online Income is Freedom: This is the main draw to the mediocre person. He or She wants to make money online so he can “travel the world and be free of the work shackles”. As if making money online suddenly means the business does not require work!
Hilarious at best, embarrassing at worst.
Make no mistake, if you want to make money online… you should. Go ahead and put in the long hours and create a second income stream, but don’t write to us explaining that zero hours are being put in. This is simply a lie. Overall, we put in about 2 hours of work per week into this hobby and we can already see the emails escalate to 10+/day. The amount of maintenance on a popular blog like Danger and Play is going to be significantly higher than that. As always, as your readership grows, so do your hours.
So there you have it on the online income piece “not being work”. No matter how you slice it, it will require time.
3) What They Are Really Saying: When you run across these mediocre types who want nothing but online income, what they are really saying is clear as day.
“I am not happy with my current life”
Lets stop and think. You’re trying to find a way to make money… to leave your current environment. By definition you simply hate where you are at present moment. Correct? Correct.
How exactly are you going to fix this without putting in large amounts of effort? You won’t fix anything.
To the people who wrote in with the counter argument, stated at the beginning of this post, here is your answer.
Quit your job/career and get a new one doing something you like.
If your life is so miserable that you assume the only good profession is one where you’re making money on the internet. You’re in a bad spot. It is time to move.
4) What They Are Really Saying Part 2: The second part of what they are really saying is that they were unable to make it in their current environment. That is without a doubt true. No one sees success in any country/city and is able to hate it. You won’t see Danger and Play complaining about the USA. You won’t see Financial Samurai writing about how hard it is.
Why? They already made it so what is there to B*tch about?
Tying points 3 and 4 together you see the question in itself is passive aggressive and backed with disbelief.
“Someone is happy in their current profession OMG impossible!”
“No way man he must hate his career and be a miserable person to hang out with!”
“The USA sucks man its impossible to make it to the top without losing your mind and health!”
We’ve heard them all. You *must* be 1) unhealthy, 2) unhappy, 3) looking for a way out, 4) jealous or 5) a liar. Of course none of this is true but that is what happens when you actually succeed. No one believes you.
5) No Competition: Lets close with the original premise. There is no competition based on the question. Everyone around you is looking for a way to leave because they believe their situation is hopeless. If everyone believes their situation is hopeless they will be stuck in a downward spiral… negative feedback loop hell.
More opportunity for you. As soon as you hear someone make *that* counter argument you should see blood in the water. Here is what will go through your mind.
……
(Smirk on the inside)
You know the person will quit.
You know the person is unhappy.
You know the person will settle for $100K a year.
You know the person hates putting in the time.
You know the person has low standards and will take advice from mediocre people.
You know the person won’t even be worth $1M by thirty.
He’s done before he even stepped up to the plate.
*Mic drop*
Hahaha. Don’t even get us started on taking advice from some of these people who are barely worth a hundred Gs!
You don’t take accounting advice from homeless people.
“So by year 5 you’re making 7% on $1.15M for literally doing nothing. $80K per year for zero hours of activity.”
How can you get this return? By doing what?
Mix of stocks and bonds. We have also covered this in the past.
FFS this guy asks the same thing over and over. He is insane. They have stated many times you simply buy index funds and bonds. They even gave you the etf -VOO.
Enough is enough. Please.
May have to do a post on how to ask better questions.
Or how to use the search bar
Thank you for this piece. The first thing that came to my mind was that this piece is an indirect jab at Bold and Determined.
Ha not at all (we are not readers of the site). However, D&P recommends that website so it is good to us as well. According to a commenter the suggestion to take off the donation was made by him and we took it.
There is no point in “indirect” or “passive aggressive”. Just say what you mean.
As stated here, we’re making it very clear that you don’t *need* to have business X in order to be happy.
Indirect anything has no place here.
How else can I donate to WSP in the future then ??
if you really want to donate just drop an email and we’ll send a paypal link.
Otherwise keep the $ dawg!
You suggest that the only decent option is to “take an extremely high paying career” where you can save 200k per year. The problem I see with this is… you recommend finance as this career. Nobody is earning 200k+ in their first few years in finance. Following your method it would, I believe, take 5 or more years just to get to year 1 of this plan?
So this isn’t just “five years to passive income”… its gonna take a decade or more to actually do this.
Sure. At 25 if you’re decent you’re making $250K. So you still put a stick in the bank by 30 if you try.
Even out of college if you are decent you make $80+$80. Save your bonus. The math is moved to 7 years if you start out of undergrad at 22.
The point is the same, do what you want, but realize that everything is going to take time.
***Place your bets wisely based on your options.*** If you can really scale a business to mid 6 figures in 5-7 years by all means do it. We have stated numerous times in the past the best way to get rich is through a business.
Splitting exact hairs on having say $850K by 29.5 years old or $1M on the nose at 31.5 years old really misses the point.
(Side note: we already covered the only 3 viable careers worth pursuing. There are many Silicon Valley jobs offering ~$1M in 4 or 5 years. If you hate all three then you’re forced to start a biz, no real exceptions.)
I live in Chiang Mai right now which is full of people trying to do Option #1. Anyone who thinks online income is easy money should come visit for a couple days, there is very little “work/life” balance here. It’s all work all the time, we joke that we never know what day of the week it is because no one takes weekends off. Sure you can travel but for the first few years wherever you are a huge portion of that time is going to be spent sitting at a laptop. Anyone who is successful here realizes that the 4 hour work week is impossible unless you put in 3-4 years of 80 hour work weeks first.
Correct. If you want to be rich you have to pay the price. Earlier is better.
I think it’s the most common question you’d get and the most common topic addressed in Personal Finance blogs because the philosophy and frugality approach is not only easier, but it’s exactly what you guys preach, average. It’s safe. It works for everybody if they FOLLOW THE ‘RULES’.
Barring WS and Silicon Valley (typically no shot in your 30s if you didn’t pick the right path to begin with), starting a business is risky. You read all the time how many businesses fail after 2, 3, 5 years. Better stick with the ‘safe’ financial option of lowering expenses and take my 70k to the bank working for the ‘man’.
This topic is more popular because it has a wider audience. To your point on work life balance, the majority probably can’t even imagine enjoying their work/grind/process that earns them real money. Couple that with the risk of starting a business, it’s easier to settle into the frugal mindset of ‘earning a smaller sum but being free’. Plus, their entire education, social network, and media is telling them that’s the right move. Hell, they’re telling them that’s the ONLY move.
You get this question because the demographic on the internet is likely average, even if you get a slightly above average readership. And you’re effectively telling the largely religious society that there is no God. It’s an uphill battle.
Interesting comment Steve. Not really sure how to respond but say… There is less competion out there.
It seems most people are not even going to take a stab at the pie in the first place. More for you!
“We’ve heard them all. You *must* be 1) unhealthy, 2) unhappy, 3) looking for a way out, 4) jealous or 5) a liar. Of course none of this is true but that is what happens when you actually succeed. No one believes you.”
In my travels (three countries) the culture of the USA (mainly Hollywood) has infiltrated the major metropolitan centers. Ive talked to lifelong peasants who own televisions. If you want to experience anything else you have to get off the beaten path, which you can do in the US if you know where to look.
Funny thing is all it would take is a three second google search, in most cases, to confirm your success, but mediocre people cant be bothered to do that.
Agree with most of this.
However, I have always felt the US is terrible for girls (as opposed to any non-Anglo metropolitan area)
That being said, you only have to work a few years in the US if you actually want to get out.
Which non-anglo metropolitan areas have you lived in?
Lived in Jakarta, Indonesia
Would give anything to be back there, but alas not possible for the next 5-10 years until I have enough money to bounce
What should one do if they didn’t pick a wall street career? For example if you are 29, only have about 150K in cash and make a measly 150K as a worker bee ( tech field )? Are you just simply fucked? The way I see it, starting some kind of business and only making 100K, but living anywhere and liking your job are a much better way out. Not everyone was lucky enough to know about wall street when they were 16, hence being able to plan out a 20-30-40 life plan.
If I knew the stuff on this blog when I was 15/16 I’d have picked a way different path in life.
Well in this case it sounds like you may have some options. Can you start a small biz with your current skills? If so do that while you work at the same time. We all know you don’t actually “work” for 50 hours a week.
Now you have 2 incomes…
Do that first then see if you can find a scaleable product… You know what to do from there
While we absolutely do not approve of time for money exchanges. Perhaps you should do some paid for consulting work, prove to yourself you’re worth more than what you’re being paid, then go and get to a business with your skills.
There are SaaS software sales jobs paying 250-300k OTE which go to 500k OTE before the startup IPOs or acquisitions
Another home run post. I have a few thoughts on this matter of trying to manufacture your online income.
Since the beginning of 2014 I’ve been trying to develop an online income. The problem is, this is very hard to do a la victor pride, meaning not showing your face until you’ve made it, and somehow getting people to buy into your product still. He did a very difficult thing. Most people don’t want to buy shit from a faceless blog and I don’t blame them.
Ironically, bloggers such as Pat Flynn and Victor make the VAST majority of their money from on thing: hosting signups and you can see this on Flynn’s monthly income report. Yea, they were making a little before, but you make $100 per signup by selling the dream, essentially telling readers “Get out of your dumbo 9-5 and don’t worry about a job!” and start mass marketing, that’s where their income gets really ridiculous. I also note Entrepreneur on Fire’s “Podcast tutorial,” which is grossing the man 100k + of income.
The problem is, how many of these piddly little blogs/podcasts actually work out?
I mean no disrespect by the above, I’m just trying to hack out the facts.
Of course you could also probably say I didn’t put enough effort in and that’s why I didn’t succeed. But my point is, your post is correct. Better to put all that time and effort into say, a commission based sales job. Plus you will learn shit along the way, make some contacts and, who knows, perhaps develop a legitimate business idea.
Yep your response is the reality. Most will fail.
The method is written out in “get out of the middle class”.
1) write emotional items to “inspire people to take action”
2) profit by saying you will help them take their first step
3) post up success stories
4) go back to selling emotion/inspiration
Works everytime just look at Tony Robbins!
Nice post. Work your ass off and get paid.
Although I agree with everything you said, online income is not capped at $100k.
Currently I am in the top 5 affiliates in a very competitive industry. I say ‘affiliate’ loosely, because I have transitioned from being mostly an online affiliate, to now having my own product which I get a much larger cut from. Anyway, I make around $500k a year.
The point I wan’t to make though is that, all these old jobs are dying and those that can fuse themselves with technology and develop valuable skills + have a bit of an entrepreneurial side will become millionaires online. I am not talking about blogging or any bullshit like that. I mean catering to existing demand or doing something seriously smart. This isn’t follow your passion bullshit. It’s building a skillset thats valuable and riding it all the way to the bank. There are gaps out there, the playing field is so wide open its ridiculous.
Yep online affiliate is sales so of course online income is not capped at $500K.
Agree on all fronts, more of a joke that people actually give “life advice” when they make $200K. No one should listen to these people.
Please somebody tell me the exact mix of stocks and bonds that consistently returns 80k on 1.15M
Dude, do people like you even read this blog or do five minutes of research?
There is no guarantee at 7%, but you just dollar cost average into s&p 500 and you should generate 7-10% over the long run. This was covered at least 15 times on this blog in the past.
Are you guys completely against online marketing? or just the idiots that think they can work 10 hours a week and make six figures a year?
BTW just found the blog. Good stuff. I don’t think I have ever seen people with standards as high as mine lol. But it is true. Even a million dollars isn’t a lot of money anymore.
Start an actual business or go into sales if you want to make money online.
Consulting or other such nonsense won’t make you rich.
What exactly do you mean by sales online? Isn’t online marketing technically sales?
Yes. Marketing is fine if you are good.