When starting out your career you trade in your time for receiving a salary. At first this is an incredible method of achieving wealth. When you are learning some new skills you are already getting paid slowly becoming an expert. However the older and the more experienced you become you start to realise that it isn’t as powerfull as you first thought. You get paid more for your work but you can’t get paid exponentially more. The reason for this is you may get more efficient, but you are getting less motivated and/or less youthfull.
Both a 20 year old and a 50 year old have the same amount of time they can spend working for the company. While older people are generally more expensive due to their experience and knowledge on the job market. So instead of trying to work more and more hours for the same return use your money to grow on itself. After putting some money aside start investing with some money that you are willing to lose and taking a chance for a better return.
One pillar to wealth is having residual income – Nipsey Hussle
The benefit from investing is that you are able to create residual income. Instead of trading your time for money you are able to slowly let the money do the work. Compared to working for your money, residual income is able to increase exponentially. Every start is difficult. The first few months to years you only add a small amount of extra income. The more you learn on investing, the better you invest the higher your additional income will become.
From the moment you start activating your money you build up an additional stream of income. If you are patient enough some day you are able to quit working for your money. You will have a passive income that can be enough for maintaining your current lifestyle. That being said to start doing this at an earlier age you should look at decreasing the cost of your living. If you need an income of 5000 a month you will achieve your financial freedom slower than if you have enough with 2500.
The biggest risk of working for your money is ending up incapable of working anymore. If it happens while you are building up your passive income you will have something working as a backup income stream incase of an emergency.