There is a money trap. Almost everyone I know falls for it. Most people are so deep in this trap, they are in complete denial. They think it’s not a trap but a safety net. This trap apparently gives them stability and peace of mind.
I’m talking about traditional employment. People like traditional employment because it gives them a false sense of security. I say false sense of security because no employer will keep you hired if you’re no longer profitable for him. So in essence, his business risks do not just apply to him, but to you as well. But since it works best in the favor of employers, they love to sell this false sense of security. I think it’s a trap. You think it’s a safety net.
The second reason people resort to traditional employment is because of instant gratification. You get paid really soon. In comparison, if you choose to be self-employed or a consultant or a freelancer or a business owner, your pay-day may vary.
Lets explain this further.
This is because of the principal called time value of money. Money in your hand today is more valuable than promise of money to be given to you tomorrow. You can spend the money in your hand today. You can’t spend the promise of money. So naturally everyone is attracted to the money that you can get now.
However, there is a reward for waiting which is generally much larger than the combined money you’d have made with your instant monthly payments. And most people are so consumed by small, scheduled payments, they are unable to see the bigger picture.
I don’t expect all of you to become entrepreneurs or business owners. You could be self-employed or a freelancer or a consultant. You still get hired, but at your own terms and with a bigger pay-check as long as you’re willing to display some patience.