subject: Breaking The Financial Trap: Creating A Secure Retirement (part 2 Of 5) [print this page] Part 2 of 5: A Bold Solution Part 2 of 5: A Bold Solution
Sooner or later we're all going to find ourselves face-to-face with the
consequences of the financial trap that is being spun around us every
day. Like it or not, there are those who will, if they can, keep us in
debt for the duration of our lifetimes - and beyond. The sooner we
accept this fact, the sooner we can focus on creating the extra income
strategy necessary to successfully fight back.
I call this strategy the "Millennium System" - in other words, the
system for creating financial security in the new millennium. So if
you're ready, let's roll up our sleeves and get to it.
In order to understand the "Millennium System" concept, we must first
understand how income is generated. There are basically 4 ways
to legally earn money in a capitalism-based economy (not including
inheritance or gambling):
1) as an employee,
2) through self-employment,
3) by owning a business, and
4) by investing capital.
Let's take a quick look at each of these.
1) Employee - If you think that working harder for a promotion, or
taking on another job, is the solution to your financial worries, then
let this be your wakeup call. Unless you are at the very top of the
entertainment, athletic, or corporate pyramids, the fact is you will
never be able to trade enough hours for dollars to make a real
difference in your wealth.
There are two unavoidable negative realities working against every
job holder: taxes and the nature of business. As with gravity, you can
fight against them for a while, but they will always win out in the end.
Capitalism is a system designed to reward those with capital, and
consequently punish those without it. That's why your bank charges
you an extra fee for a bounced check; you're punishment for not
having enough money is to have more money taken from you.
As an employee, because you don't have much capital, your
punishment is you get to pay the highest taxes of anyone in the
economy. And there are virtually no tax shelters available for your
income. It's like being the fox at a fox hunt; the game is simply not
designed for you to win.
The very nature of business works against you for the same reason.
For example, even though studies show most Americans would prefer
to telecommute at least part of the time, and the environment would
certainly benefit from less traffic on the roads, productivity demands
and management's need for control will prevent the vast majority of
workers from ever discovering the joys of working from home.
Businesses turn a profit by keeping costs lower than revenues - and
labor is far and away the largest cost center for most businesses.
Therefore, if your primary income is from a job, understand this basic
fact of life: a company's ownership will never pay an employee more
money than it costs to replace them.
For example: ever heard of age discrimmination? The reason so many
employers get away with it is because it's easy to legally justify
replacing older, expensive labor with younger, better trained, hungry
workers willing to work for less.
(And as for the value of experience, it's actually overrated. Most
10-year employees don't have 10 years of real experience; often
what they really have is one year of experience repeated 10 times.)
It's the same with automation - if a computer or robot can learn to do
your job faster, better, and cheaper than you do, you'd better face the
fact that your days on that job are numbered. It's simple economic
wisdom - and it's good business sense if the company wants to stay
competitive.
It turns out that your economic progress, and your family's security,
is determined much more by how well you use your mind to creatively
add value to the marketplace, than by how long and how faithfully
you're able to follow other people's directions.
So the moral of the story is this; a job is meant to sustain you while
you prepare yourself to become a business owner. It was never
designed to make you financially independent, and it never will. The
solution? Instead of fighting the system, get financially educated,
