Swimming Pool or Slavery?

Brothers and sisters, we convene again. Thanks so much for all your comments and feedback! Much to talk about this week, so let’s get straight down to it…

You’re here because you want to be financially free, you want wealth and the security that brings. So I’m going to talk about this path to TRUE financial freedom, because this path has a treacherous bridge in the middle of it, and most people can’t cross it because they don’t know how.

Imagine two islands connected by this bridge. On one island the people live in slavery, day in, day out. On the other island, the people just sit by their swimming pools without needing to lift a finger if they don’t want to.

There are two types of people on the slavery side, and two types of people on the swimming pool side, so let’s see which group you’re in and how to cross that bridge, shall we?

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On the ‘slavery’ side of the bridge we have these two types:

1)    Employee

2)    Self-Employed

Employee.

The first group is the one most people are in. In The League of Power home study course we talk a great deal about this type of person and how they fit into the equation, so I won’t go into depth here, but they are obviously the most trapped of all four types.

An employee has to work for a superior, has limited time off and even needs approval for that, and they are, by definition, a liability on the corporation’s profit and loss account. Usually paid an hourly rate as low as the market will stand. Fixed income unless promotions can be engineered through the minefield of office politics.

The benefit of course is PERCEIVED security- you go to work, receive a steady paycheck that you ‘know’ will always be there each week. As a legacy of grade school, an employee usually wants to show up and suffer from 9-5, and then be able to switch off for evenings and weekends.

This isn’t to say you can’t be perfectly happy if you enjoy your work and have no great financial ambition, but I suspect the reason you’re here is because you’re NOT happy to be an employee.

Eventually, some employees (the smarter, more ambitious ones) wake up. They see themselves being fleeced like sheep by the boss who keeps all the money that their hard efforts are creating, and they decide they’d be better off being their OWN BOSS with their own business.

And so it’s only natural that this group of people then falls into The Big Trap. Enter the second type of person on the slavery side of the bridge:

Self-Employed

This is where most budding entrepreneurs and professionals get stuck. They now work for themselves, but note the operative word I just said: ‘work’. They still work, only for themselves.

Having a corporation or LLC does NOT mean you’re not in this group! Unless you pass a test I’m going to give you now, you may as well be employee or a 1099 contractor, I don’t care what kind of corporate structure you have. “I have my own corporation/LLC” is a phrase I hear a lot of people boast, but it’s a meaningless statement in most cases. They may as well be employees.

So how do you know if you’re in this group?

Simple. Just answer this question:

If you didn’t touch your business for a month and stayed in bed instead, would it still be there when you got back?

Very few people who have corporations/LLCs can say ‘yes’ to this.

If you answered ‘no’ to this question, YOU DON’T OWN A BUSINESS, YOU OWN A JOB!

All you’ve achieved is changing employers.

Sure, you may earn a bit more money now. You might even be able to goof off a bit here and there. You’re in charge of your own destiny now. So it’s certainly better than being an employee in most cases, but you’re still a slave. You may be the slave master as well now, but you’re still a slave.

In fact, many self-employed people work much harder than employees, and in some cases earn LESS. If many self-employed people did the math, they’d be better off going back to having a job, especially when you take benefits into account!

This is NOT financial freedom. You have to work on your business or you won’t have a business.

This is why doctors, lawyers, and other professionals will NEVER be financially free. They will NEVER cross the bridge to the swimming pool island (unless they follow the advice that follows shortly). Sure, they may all have swimming pools, but they’re unable to sit gazing into it all day (or doing whatever they want).

Here’s another good question to ask yourself about your ‘business’, in case you’re in doubt:

Is your business saleable? Could someone realistically buy it or would it fall apart without you?

Again, most people would say ‘no’. In which case, you don’t have an asset, you have a JOB.

You’re still a mouse on a treadmill.

You pretty much spend what you earn, often because you work so hard and need things like cleaners and childcare.

This is The Big Trap for most people who graduate from being an employee for this simple reason: BECAUSE THEY HAVEN’T STOPPED THINKING LIKE EMPLOYEES.

They’re still brainwashed by this antiquated notion of a ‘work ethic’, and they feel the need to shuffle paper from 9-5.

And that’s where they’ll stay in most cases- on the slavery island. Because they have no exit-strategy.

But it’s so sad, because their passage across the bridge to the swimming pool island could be so swift and simple! All they’d need to do is have two wise sentinels escort them over…

And those two sentinels are named: ‘System’ and ‘Royalty’.

They’re more than happy to escort self-employed people over the bridge, but they’re almost never asked…!

Now, on the swimming pool side of the bridge, we have these two types of people:

1)    True Business Owner

2)    Investor

True Business Owner

On the other hand, if you answered a big fat ‘yes’ to my questions, get over here! You win a first class trip to swimming pool island.

The True Business Owner had the help of the two sentinels, System and/or Royalty and now he has true freedom. He can just sit by the swimming pool all day if he chooses. Let’s look at each of these two powerful sentinels:

System. Does the CEO of McDonald’s flip burgers? Does the CEO of Starbucks steam milk? No. Because they systemized their businesses so a monkey could do it. They wrote a foolproof manual on how to run their business, and then had other people do it. What’s more, once they had a system, they could sell the franchise to their business and make even more money. But the point is this: if they didn’t show up for a month, the income would still come pouring in. They own a business, not a job.

Now, at this point I hear most people argue and insist that what they do can’t be systemized. In some cases this is true, but most times it isn’t- they just haven’t sat down and written out what it is they actually DO each day in simple language, and/or invented a way that anyone could do it.

That way may not be as perfect as the way you would do it, but McDonald’s doesn’t care, as long as people buy the burgers, because they understand systems. And because Ray Kroc wanted to sit by his pool.

You don’t have to be a giant like McDonald’s or Starbucks (they certainly didn’t start as giants!)- any business, large or small, can achieve this. Again, most people are resistant to this because they’re still thinking like employees- it’s not in an employee’s best interests to figure out a way to be replaced by a monkey!

Next, Royalty. You know what this is- a payment for the use of something you created. Like an App, or a song, or a sales letter and product. Once the initial work is done, you just kick back and collect a royalty while you splash your feet in that pool. People stuck in the employee mind set have trouble with this because there’s a feeling of working with no guarantee of payment. Get over it if you want the pass to swimming pool island.

Investor

The other resident on the swimming pool island is the Investor. This is someone who’s made good money as a True Business Owner, and now he doesn’t work for money, money works for him.

He probably doesn’t stop being a True Business Owner because why should he? He’s both.

The Investor is able to sit by the pool because he made enough money to put into stocks and/or property. Stock dividends and/or rental income.

So step over to Swimming Pool Island. It’s nicer here…

Investment Round up:

Moving on, I’m going to make an important call here and now because I sense a turning point…

I believe we’re at the bottom of the real estate market. It’s prices up from here.

I don’t say this because I’m optimistic about the economy (I’m not) as much as The Great Inflation will soon bite hard. I’ll talk a lot more about this next week because it’s critical, but I just wanted to make this call today.

And I’m voting with my feet. I’m keeping the investment property I was residing in, and I’ve just bought on an acre and a quarter in the best part of town with a 6,000 s.f. house on it. Why am I telling you this? Here’s something important: I’m buying this property with cash, BUT as soon as it closes I will be getting a mortgage even though I don’t need one and I HATE debt.

Why? Because interest rates are so stupidly low. Would you like some free money? Then just borrow all the mortgage you can at these low rates and with the proceeds go and buy something that pays more and pocket the difference! There’s a good REIT (Real Estate Investment Trust) called Two Harbors that pays SIXTEEN PERCENT!

So if you borrow mortgage money at 4% and put the money in something that pays 16%, that’s 12% free money, or a FREE $1,000 a month for every $100k you borrow. Strange times we live in…

Anyway, I’ll give my quivering hands a rest now as, speaking of swimming pools, I have to go and see the pool designer for my new house, so very excited today.

I searched for images on the Internet to get some ideas, and you won’t believe some of the amazing pools people have. A few selections below.

Perhaps this can be some inspiration to make that crossing onto Swimming Pool Island…

More next week (when I’ll probably be a bit poorer after I’ve gotten carried away with the swimming pool designer)…

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Regards,

Jim Sheridan

3 Responses

  1. Paulo Teller

    Yes, every single word on this article is true. And yes, I’ve lost a lot in the past too! By the way, thanks for the pictures. They are very inspiring and a great help for the moment we achieve the wanted results, with the side kick this publication is.

    Best wishes to all,
    PT

  2. Allistair

    Dear Mr. Jim Sheridan,

    Thank you very much for your (above) report.

    Your report is most useful to anyone reading it, as long as the current World economic system exists.

    You see, the “class structure” you refer to (i.e. the “Slavery side” and the “Swimming Pool side”) is linked to the very foundation of our economic system – a system that is based on the exploitation of MAN (i.e. the “Monkey/Employee”) by MAN (i.e. the “Business Owner/Investor”). That system of exploitation is also between rich/advanced countries (i.e. USA, Canada, UK, etc.) and poor/underdeveloped countries (i.e. “third world” – much of central/south America, Africa, Asia, etc.).

    However, observe that over the past 50 years, or so, the “poor” (“Monkey/Employee”) the world over, are getting relatively poorer and more numerous, while the “rich” (“Business Owner/Investor”) are getting relatively richer and fewer. (right?)

    With the forgoing, we can see clearly that the current World economic system, IF left to run it’s NATURAL course, is unsustainable. The natural (inevitable?) tendency of this economic system is massive (world-wide) poverty. The “Slavery Island” will get relatively bigger and bigger, while the “Swimming Pool Island” will get relatively smaller and smaller – towards a total collapse of the system.

    Under the current economic system, the solution will not be even to make the “Swimming Pool Island” bigger and bigger (and do away with the “Slavery Island”) – because, now get this, the smaller “Swimming Pool Island” exists in direct (and indirect) relations to the existence of the much larger “Slavery Island” (right?).

    In conclusion, we can see clearly that the REAL solution to man’s economic and social problems is to dismantle the current economic system, and replace it with a popular and sustainable alternative, in which we see the (eventual) end of exploitation of man by man and country by country.

    I call that alternative a “Free Enterprise” alternative, ran by a community of “Free/Independent Producers”, in which production of goods and services is driven mainly to meet the needs of society (and with due care for the environment), and NOT to meet the profit/greed needs of a FEW (i.e. Owners/Investors who control and direct the current system). This is the REAL solution that will ensure the future wealth and happiness of the human race. Otherwise, even the “Slave Island” will cease to exist.

    Thank you for reading.

  3. Gordon

    Great Articule enjoyed reading it got a couple laughs but have to say it is good advice and an accurate window into life.
    Still trying to get mine on auto pilot with a satisfying cash flow.

 
 
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