Introduction
In the beginning of every financial cycle, young individuals and new organizations earn their first income, either as remuneration or as revenue. This income or earnings serves as the core building block of all financial cycles; without this, there is no propensity to spend and no provision for spending. Only after spending, that is when individuals and organizations think of savings or investment, usually in very small amounts that do not move a needle. And because it was not part of the intended objective at the beginning of a financial cycle, many do not achieve good and continuous returns for lasting wealth.
Money is not just a currency of legal tender but a tool for solving problems and creating value for quality living. As a tool of good and high quality life, money is a transaction, changing hands from owners of systems to the earners of checks. Those who own systems behind money have a better and higher quality of life, than those who earn money from hard work. Every individual and organization goes through one of four financial cycles, including salaries, spending, savings and supplies in the ordinary course of life. For you to grow and keep your quality of life, you must move from one financial cycle into something unique, where money changes hand to achieve something.
“Everyone goes through a financial cycle. First is the salaries problem –to get rewarded. Second is the spending problem – to control resources. Third is the savings problem – to reserve some money. Fourth is the supplies problem – to multiply your returns.“- Dr. Wonders Pibowei
In a world obsessed with becoming affluent – very rich and powerful, many believe that having excess money in your pocket or bank account is the most important ingredient to becoming wealthy. However, having excess money does not give you the same outcomes as having unlimited cash flow from your investments and owned assets. When excess money is not deployed into investments and ownership; the future value might go down, when adjusted for emergencies, inflation and other uncertainties. Hence, it is wise, smart and prudent; to expand your capacity from how much money you can get from salaries as at today into how much money can be supplied to you in the future.
My Side Hustle! – The Salaries Problem
While there are other benefits from working, salaries remain the basic and major source of livelihoods for the middle and lower income class. Many times we hear, I dey hustle: believing that growing rich is tied to more effort and faster income; hence many of us try to do more and much more hard work. Effort is the conscious or deliberate use of physical and mental energy to achieve a specific goal or result. There are three types of effort used to break in or break out of a financial cycle, including hard work, smart work and network. The salaries problem is concerned with our ability to get rewarded through remuneration, revenue or relationships from any or all of our efforts.
Money cannot sufficiently reward those who work hard, because nobody has forever to earn enough money for wealth. In a world system run by only affluent people with so much riches and power, we believe that having excess money is the most important ingredient to a wealthy life. Hence, most people continue working harder, running from 9-5 jobs to side hustle; believing that earning more checks will give them better financial outcomes in life. In reality, working harder with much struggles of effort does not always equate to becoming wealthy with multiple streams of income.
a) Hard Work – You Are Working For Other People’s Money
Salary earners thrive on what only they can do as an individual, known as hard work. They put in long hours, consistently and continuously for days, weeks, months or years in an environment called 9-5. Hence, the level of income earned by them is in a direct association with their physical involvement and effort. If they stop working right now and your boss or client stops paying, then their source of income ends almost immediately. The length of time and value of skills in one job or contract is what determines how much they get paid and when they get paid. You are being paid for doing a job that creates money for other people’s use and enjoyment.
“As a hardworking man, the level of income earned is in a direct association with your physical involvement and effort. If you stop working right now and your boss or client stops paying, then your source of income ends almost immediately.” – Dr. Wonders Pibowei
Many people live in delusion, believing that working two or more jobs helps them to create a wealthy life in the future. Sadly, you do not have luxury of time and strength to create wealth for yourself, through the jobs you do for others. When you stop working for the sake of retirement, health, or death; the income suddenly disappears. Now people who depend on your physical effort and income, later regret that since one retired or died, life has not being the same. See time as a currency and live your short days in pursing things that converts limited valuable time for other people use and enjoyment, to limitless supplies of money from other’s peoples earnings
The rich is a final boss to the poor; that is, those who work hard are led by those who work smart. Here is how we see it. First, he who pays the worker dictates rules of the job description, hours and pay. Second, he who runs the bank dictates rates of interest on savings and borrowings. Hence, the rich man gets wealthier and the poor man suffers lack by passage of time. By default, working hard is programmed to keep you financially under the man who hires, pays, ranks or fires you. But, working smart is programmed to keep you financially above those who earn from you. If you were good at another man’s business, then you can be good at upgrading your life.
b) Smart Work – People Working For You and Their Money
Through smart work, we create a system that maximizes output by many experts and minimizes effort of one individual. This is where you hire, train and pay the best experts to work for you in a business environment where trade, manufacturing or services are executed on your behalf. Here, the power of agency brings customers to you and creates value for you; hence you no longer have to be physically present to execute ideas before earning an income. This helps to minimize time and resources that could be wasted by one individual trying to get many jobs done at once.
Also, operating as a registered legal entity gives you influence over value chains; from getting the whole revenue to spending money first and paying taxes later. You have leverage to spend first as you earn and get taxed at a later date, because he who pays the piper dictates the tune. Similarly, your personal liability is never subject to direct tax, unlike your job and side hustle which is assessable for personal income tax. Other than sales taxes or value-added taxes which are deducted as source or from original income; every other taxes are deducted from profit in all entities.
“Through smart work, we create a system that maximizes output by many experts and minimizes effort of one individual. Hence you no longer have to be physically present to execute ideas before earning an income, through the power of agency.” – Dr. Wonders Pibowei
Many people never choose smart working due to the comfort zone of having stable incomes from personal effort; hence they get locked in the rat race of riches without wealth. Smart work helps you to achieve one of two goals or two goals at once: to mind your own business and/or to hold other people’s equities. Minding your own business is a smart way you create an idea as a legal entity with full ownership and controlling interest. Holding other people’s equities is smart way to invest in new or growing ideas with part ownership and significant interest. Your business generates passive income for you while their business supplies portfolio income to you.
c) Networking – Relationships Making Way for People at Work
In today’s climate, what you know gets you to the start but who you know takes you in the finish line. Networking is the art of building, keeping and leveraging social or professional relationships with the most valuable persons known to you, anywhere. Through relationships, we stand on people’s shoulder unlocking and exchanging shared values while creating new and better opportunities. As stepping stones, relationships allow you to get access to scarce resources and secret places, far above your maximum efforts or wildest imaginations. They open doors to new jobs, partnerships and knowledge that your skill or strategy alone might never gain.
Relationship is the currency behind networking and people are the linkages for that currency. In every relationship, value is created and shared between two or more persons towards a particular objective. Some relationships lift you from the bottom or middle to the top, they are your gatekeepers or sponsors. Some lead you into good times or out of bad times, they are your guardians or mentors. Some give you value in return for value, they are your generators or partners. Sponsors ensure you get into the boat, mentors teach you how to fish, while partners join the boat to fish with you. While the rest come in to help you at a fee, from coaches to consultants.
“In today’s climate, what you know gets you to the start but who you know takes you in the finish line. Sponsors ensure you get into the boat, mentors teach you how to fish, while partners join the boat to fish with you.” – Dr. Wonders Pibowei
From office after office, influence after influence; the Man at the Top is usually the most sought-after valuable person you could ever know. The kind that suggests valleys can turn to plain fields and mountains can shift from their place, at his word. The kind that convinces you, that he has mastered the complex art of negotiating all deals and navigating every powers. The kind that makes you believes that he is building networks that will last forever; however some connections or collaborations remain short-lived. What goes up always comes down. Those who stick to their roots, do outlive any hardness and hardship when times and seasons change.
Time As A Salary Problem, Not the Job
Of three of the efforts, hard work seems to be the most energetic pathway to human productivity and yet found to be the least impactful pathway to financial success. While, hard work comes with small beginnings and step-by-step growth in your journey to the top, it is not a medicine to close your wealth gap. Not many of us were born with silver spoon neither was most of us born into the corridors of power; hence we do not have the cards to play fair with the rich and powerful. By progressing into smart work and networking, we get to achieve more with less effort in a world that takes donkey years (very long time) to get proven and profitable results through hard work.
In 1896, an Italian economist Vilfredo Pareto observed that 80% of Italy’s wealth and land belonged to only 20% of the population. Developed by a management consultant Joseph Juran in the 1940’s, the Pareto Principle holds that a small proportion of work (about 20%) leads to a greater proportion of results (about 80%). This became known as the 80/20 Rule, principle of least effort, or law of the vital few; allowing us to work less, live more and be more successful. Most things in life are not evenly or equally distributed, as each unit of work done and time spent does not contribute the same amount; hence some will contribute more than others.
“Not many of us were born with silver spoon neither was most of us born into the corridors of power; hence we do not have the cards to play fair with the rich and powerful.”- Dr. Wonders Pibowei
The goal is to work smarter by maximizing your effort into a few high-rewarding or most-productive activities that truly move the needle, rather than getting caught in up to 80% of mundane repetitive tasks. By attending to 20% of customers or contracts with high-paying tickets, we can unlock 80% of sales or revenue, with the least efforts. By unblocking 20% of software bugs and customer tickets, we can prevent or mitigate 80% of software crashes and customer pain-points, with the least efforts. By accessing 20% of relationships with high net-worth individuals, we can unlock 80% of what we need to have or become, with the least efforts. By prioritizing 20% of important goals or problems, we can achieve 80% of results, with the least efforts.
The shortest distance between wealth and poverty or between success and failure, is measured as a unit of time. So why is time your greatest undoing as a salary earner? When you deal with a financially successful person, you will find that they treat time differently from others including you. While many of us think of more jobs and contracts to get richer; they look out for more people and holdings that create time value. While many of us spend most of our time to work hard for some of the outcomes; they spend less of their time to buy, build or borrow resources for most of the outcomes. If you can master time in your life, then you can fight your way to the top effortlessly.
About the Pre-Money Insider
Backed by Wonders Pibowei and Chris Emejuru of Lowase Capital Partners, The Pre-Money Insider is a series designed to advance million-dollars investment opportunities through knowledge sharing and wealth partnerships in the Global South.
The Series comes with a blend of training, publications, networking and summits that help first-time investors and high net-worth individuals to actively engage in high-stakes funding and partnership deals with key accounts across industries and economies.
Special Announcements
1) Join our upcoming Pre-Money Insider Mastermind, where we work with you to mobilize and structure patient-capital or partnerships for backing revenue startups, growth companies and development projects across Africa in a 90-day-plus venture round. For premium access, book here or royalty access, book here.
2) Join our inaugural Pre-Money Insider Masterclass; learn to design and deploy generational wealth systems to create long-term and future-proof investment advantages for yourself, family or company across any industry or economy in Africa. For general access, book here or corporate access, book here.
