The Hidden Gems of Investing
1) Say you earn Rs 1 lac salary as an Employee
2) You are dependent on your employer and hence obey orders and work in keeping with what your employer wants you to do
3) If the employer is a good soul, you can expect to be happy. Otherwise you can have a miserable time
4) So basically ‘Salary Income’ has external dependency
5) You can earn the same Salary of Rs 1 lac as an Freelancer
6) How is this different from the first example
7) As a Practitioner or a Freelancer, you earn Rs 1 lac without any external dependency on an entity like an Employer
8) You realise the value of your core skill
9) You feel independent and experience more freedom
10) You feel more secured
11) There is a sense of realisation of self worth
12) You also start working harder to increase your income
13) So if you were working for 5 hours, you try to work for 10 hours to double your income
14) This is known as Practice Mindset. While it is liberating, it is also limited and hence gives birth to a Scarcity Mindset in the long run. Therefore may Practitioners like Doctors, Architects etc go through a mid life crisis
15) In System 2 (Practitioner), you are on your own
16) In the first case you were like an employee in a large ship but now you are sailing a small boat all by yourself
17) The Boat may be small but it is yours and you need not listen to orders from within and experience Freedom like you never did in the past
18) Now let us look at a third case
19) You still make Rs 1 lac per month
20) But now you have built an organisation
21) You have hired employees, you have other business partners, you have build assets like an office, brand, systems and processes
22) You are now the owner of an Asset
23) The main difference in this stage is the opportunity to scale up your freedom which was limited in System 2 (Practitioner)
24) In the previous two stages, your income would have got adversely affected had you not gone to work
25) But in System 3, your Income continues to flow irrespective of whether you go to work or not
26) Hence System 3 is all about building an Asset that puts money in your Bank whether you go to work or not
27) This the main difference between earning Passive and earning Active Income
28) In both Stage 1 and Stage 2, your ability to expand the business was limited to your finite man hours
29) In the 3rd case, your ability to expand your business is unlimited / infinite
30) The first two cases represented what we can term a Scarcity Mindset System while the 3rd Case is a reflection of an Abundant Mindset System
31) Asset Ownership is seen to be very crucial because it lends “Freedom” to the Asset Owner
32) So what does this mean?
33) Does this mean a Salaried Person or a Practitioner cannot Experience Independence?
34) Certainly he or she can still experience Independence of System 3 even if he or she is operating in System 1 or System 2
35) Everyone need not be a creator of an Asset although building a Brand and Business Ecosystem is an awesome experience because it allows the business owner to build wealth not only for himself but for Employees, Partners and other Stakeholders
36) But that does not mean others in System 1 and 2 have no recourse other than to toil harder and harder, perspire more and more
37) They too can experience the magic of System 3 if they make Money their best friend
38) They can send their Money out to work and return with more Money
39) This is known as Investing
40) By being Investors, they too can become Passive Income Generators along with their Active Income Activities
41) Passive Income provides a safety Net for those operating in System 1 and System 2
42) It gives them the freedom to continue with their Job (System 1) as long as they are happy with their Employers
43) It even gives the Practitioner (System 2) to work in the way he or she wishes to and not get pressurized to slog more for the sake of earning a little more Money at the cost of Personal time / Family time
44) It allows the Practitioner the freedom to judiciously use his or her, ‘TIME’ inorder to maximise the awesomeness of Life
45) Thus “Investment” is not just about building a nest egg for a rainy day
46) Investment is the basis upon building an Awesome Life can be built on a Sturdy Foundation of Freedom & Self Respect
47) To conclude, in System 3, you become the owner of the Ship and not just earn your income but are able to help the ecosystem by becoming a valuable Contributor to the Ecosystem on the whole which is achieved by manufacturing jobs for employees and awarding projects to other Entrepreneurs
48) In System 3, you have the opportunity of realising a Mission because Life is full of Meaning when you are able to not only work for Self but moreover to work for Others and make the world a better place for one and for all
49) When you are dead, nobody will ever remember you for your Bank Balance
50) But everybody will remember you for what you were; what you became; what you built; how you changed lives and the ecosystem
51) Lata Mangeshkar will always be remembered for her songs but never for her Bank Balance
I rest my case
