The Truth: Why Trading Time For Money is the Best Way to Make More Money

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Do you want to stop trading time for money?

Yep — you, and everybody else.

Thanks to the Tim Ferriss and his band of passive income pursuers, “not trading time for money” has become the rallying cry of people who are stuck in a job that they don’t like, and want to create the freedom to quit and do something different.

They say it with pride, confident that they are making the smart, strategic choice that their corporate colleagues don’t have the guts or foresight to make.

But most of the time, they go about it all wrong.

Most of them never see a dime, and years after they’ve started their quest for freedom, they’re still trapped in their corporate cage.

What are they doing wrong?

How can you avoid making the same mistakes?

Keep reading.

What It Means to Stop Trading Time For Money

Let’s start by getting on the same page.

I mean, “stop trading time for money” is an inspiring goal, but it’s kind of like “pulling yourself up by your bootstraps”, in that it isn’t actually possible. (Try to visualize the bootstrap thing to see what I mean.)

Here’s the truth:

Everyone trades time for money.

Even the guys who gross over $30,000/month from information product sales, affiliate commissions and iPhone apps. They spent time building their sites, promoting the affiliate products, and creating the applications.

And when they work, they work hard.

But they also work smart.

Here’s the difference between those guys and most people:

Each hour of work they do results in a large amount of money, which means that they can afford to work on projects that are more lucrative in the longer term, hire the resources they need to make it a success, and have enough free time left over to live it up with their friends and family.

So when people talk about not trading time for money, what they are really talking about is adjusting the relationship between time and money: how much time for how much money.

How to Spend Less Time and Make More Money

Let’s face it. The hourly rate of most corporate employees is pretty low.

By the way, an easy trick for calculating your hourly rate is to take your annual salary, divide it in half, and take off three zeros (this assumes a 40-hour work week).

For example:

  • $30,000/year = $15/hour
  • $50,000/year = $25/hour
  • $80,000/year = $40/hour
  • $120,000/year = $60/hour

Let’s compare those numbers with the effective hourly rate of the entrepreneurial projects that people aspire to when they think of not trading time for money:

  • An affiliate niche site that you spend 10 hours researching, 30 hours setting up, and another 30 hours promoting (link building, etc.), which then earns you $300/month for 2 years. Effective hourly rate is $102.86/hour.
  • An information product that you spend 800 hours building (Don’t kid yourself, that’s not a lowball estimate. It took us over 2,500 hours to create our Firepole Marketing training program) and then launch 4 times over two years, making $7,000, $20,000, $40,000 and $80,000. (You make more with each launch as your list and audience grow, and factor out your costs.) Effective hourly rate is $183.75/hour.
  • Build a business that you put $150,000 of your own money into, work on full–time (60 hours/week, 6 days/week, with no vacations) for three years, and then sell your stake in for $11,000,000. Effective hourly rate is $1,159.19/hour.
  • Deliver a keynote presentation at a major conference, billing $20,000 for a 90–minute talk (less travel costs and speaker bureau fees). Effective hourly rate is $8,665.62/hour.

The numbers I’ve listed above will change depending on the assumptions (how much you charge, how long it takes to set things up, and so on), but the fact remains that they are all significantly higher than a six–figure corporate salary. Which, of course, is why they’re all so attractive.

So, why isn’t everybody doing those things?

Why does anybody work a corporate job when they could be making many times that as a consultant, affiliate marketer, internet entrepreneur, or keynote speaker?

The Interval Trade–Off: Work Now for Money Later

The reason why most people are working corporate jobs rather than doing any of these super–lucrative activities is that they have bills to pay today, and a job is the only thing that will make them money today.

  • The affiliate site won’t make you a dime until it has been researched, setup, built, and promoted. Time to start seeing the money is 80 hours, and time to see all the money is two years later.
  • The information product won’t make you any money until you build it and sell it. Time to start seeing the money is 800 hours, and time to see all the money is two years later.
  • The start-up will make you rich when (if) somebody buys it, but in the meantime you’ll be living on peanut butter and jam. Time to start seeing the money is 9,360 hours and three years.
  • The keynote presentation may seem like fast and easy money, but before you will be invited to deliver that sort of presentation, you’ll have to spend a decade working hard to become the next Tony Robbins or Jim Collins. Time to start seeing the money is more hours than I can count, and at least ten years.

So what can you do? Are you just trapped in a cycle where the rich getting richer and you’re stuck in the same place?

I don’t think so, but the answer isn’t to stop trading time for money. Instead, you should try to start trading time for more money!

Start by Trading Time for More Money…

Instead of going after a route that takes hundreds of hours before you see any meaningful results, try a path that — although it definitely involves trading time for money — allows you to make money a lot sooner.

For example:

  • Consulting work, in which you bill $150/hour, but need to spend at least one hour generating business for every two hours that you bill. Effective hourly rate is $100/hour.
  • Group coaching services; each group has five members that pay you $400/month in exchange for four hour-long phone calls/month, plus an hour/month each of email support. Effective hourly rate is $222.22/hour.

The beauty of these options is that the effective hourly rates are much higher than a corporate job, but you can still be up and running pretty quickly.

Spend a couple hours of focused work per day on networking and finding clients, and you could have consulting clients lined up within a month. At $100 per hour, you don’t need many. If you line up just 5 hours per week of consulting work, that can replace half of a $50K/year salary.

Do you see where I’m going with this?

Transitioning to Higher Income Activities

It takes time to build up to the higher income activities, and unless you’ve got a giant nest egg set aside, you can’t just quit your job, which means you don’t have all that much time. That’s why the key to transitioning from a corporate job to higher income activities is that it has to be done gradually.

Here’s what a timeline might look like for someone who is making $50K/year.

  1. Day job working 40 hours per week and making $50K per year (which equates to $25/hour).
  2. Start a consulting practice, and grow it to the point of having 5 hours of work per week, billing at $100 per hour.
  3. Reduce your day job to part–time (the 5 hours/week of consulting replace the rest of the salary), and invest more time in building the consulting practice.
  4. Grow a consulting practice to the point of having 10 hours of work per week and billing $100 per hour. This fully replaces your day job income.
  5. Quit your day job. Now you have the same income as before, but you’re working a lot less.
  6. Use the time that you’ve freed up to setup a group coaching practice, so that you can spend even less time, and make the same amount of money.
  7. Using all of the time that you’ve freed up, you can build a real business selling information products or services. You could even do that startup, or lay the groundwork for the keynote speaking career.

Most people try to jump straight from step 1 to step 7, but that’s very hard, because step 7 takes a lot of work, and if you’re still stuck in step 1, you don’t have time to do it all.

Over to You

Do you aspire to stop trading time for money?

What avenues have you tried in order to achieve that goal?

Leave a comment below.

Danny Iny (@DannyIny) is an author, strategist, serial entrepreneur, expert marketer, and the Freddy Krueger of Blogging. Together with Guy Kawasaki, Brian Clark and Mitch Joel, he wrote the book Engagement From Scratch!

77 Responses to The Truth: Why Trading Time For Money is the Best Way to Make More Money

  1. Great, great piece Danny.

    I agree with you 100% that people greatly underestimate the time it takes to produce “passive” income.

    The beginning stages being anything but passive!

    Working smart with your time is how to make it really happen, and I really liked your analysis of time per hour on those projects you listed.

    Reason being is that once you’ve created a steady flow of income for yourself (through a lot of time and hard work!), your time can be used effectively by outsourcing and paying to have repetitive tasks done, while you handle the big stuff.

    This isn’t some sort of new age mumbo jumbo either, ask any small business owner who has grown their company to more than 10 or so people.

    I’ve talked with a guy who’s company did the marketing aspects for Wawa’s “Hoagie Fest”, and he said one of the biggest transitions that he had to make in his business was knowing when to “let go” and delegate tasks, since he had been such a hands on guy for so long.

    Point is, no business will grow itself, and “passive income” only starts to happen after a lot of legwork has been put in and you can start to delegate the more time-consuming but less skillful tasks.

    Really refreshing post once again, I guess it’s time I actually subscribed to your mailing list rather than just visiting your blog all the time ;) .

    • Danny Iny says:

      Thanks, Gregory, I’m really glad that you liked the post.

      It drives me nuts to see all the people out there talking about “passive income”, and you’re right – in the beginning, it’s anything but passive!

      That’s the recurring theme from everyone who’s really made it – at first it’s hard work, and only then can you start thinking about delegating and “not trading time for money”.

      And yeah, it’s definitely time that you headed on over to Firepole Marketing and subscribed! ;)

  2. Karen G says:

    This is a great post! I’m sure that a lot of the “don’t trade time for money” folk haven’t completely thought things through, and you’ve now put this in perspective. Time is essential to making money, but it’s how we spend our time and the value we put on that time that makes the difference between being financially successful and just scraping by.

    There are very few “overnight sensations”…they may seem that way because you haven’t heard of them before, but a great deal of time went into preparation and building for success.

    Thanks for putting this into perspective. I love the actual dollars you’ve attached to the examples. It makes working smarter, not harder crystal clear.

    • Danny Iny says:

      I’m glad you liked it, Karen.

      Yeah, that’s the problem – not trading time for money sounds great in theory, but so does living on a beach and collecting paychecks – the question is how do you make it happen? ;)

  3. I like the fresh take on the breakdown of entrepreneurial projects that pay off in the future. That’s something that’s obviously hard to quantify, but it’s great to understand the general concept and get the ballpark numbers.

    I’m definitely working on trading time for more money since it also seems impractical to me to try to jump to passive income. I’m doing this through consulting at hourly rates that are higher than my day job and rates that will continue to grow, too.

    • Danny Iny says:

      Jeff, you’re right, it’s almost impossible to quantify, and of course my numbers are just shots in the dark – but they serve their purpose by illustrating the relative differences between the different activities.

      I think you’re doing things exactly right – ratcheting up your effective hourly rate, until you’re in a position to work on projects that have a much bigger payout, but over a much longer time horizon.

  4. Paula says:

    Very timely article. I already run a successful service business but am in the process of establishing several “passive income” businesses. Lots of time invested now for payoff later but because I’ve done it before with my current business I know the effort will pay off.

    I like that you’ve outlined the steps very clearly. There’s no reason why someone, who is willing and able to put in the time, can’t succeed and transition over from a job to a business. But putting in the time is key and there’s no short cuts or get rich quick here.

    • Danny Iny says:

      I’m glad you liked it, Paula.

      And yeah, you’re exactly right – it’s a lot of time invested now for payoff later, and the only reason you can afford to spend that time is because you’re already running a successful service business now.

  5. Interesting break down. Affiliate niche marketing is my biggest passion, but I still take on freelance writing work as well for this exact reason.

    Affiliate sites can pay off, but there’s a delay. And since I have bills that need to be paid now, I still use a combination of day job and freelance writing because I know my efforts will result in a defined payout right away.

    • Danny Iny says:

      Hey Sarah, great to see you here!

      The delay is the real issue – and it’s why not everybody can do what you do (and won’t reap the rewards that you will eventually reap, either).

      In the long run the efforts pay out, just as long as you can stick it out long enough, and are in a position to do so. :)

  6. Mena says:

    I’m a college student in my last year. I’m starting my Graphic Design freelancing job. The income is low even “none.” I’m marketing myself every day or as possible I can.

    Do you have any ideas/articles can help more?As I was thinking a bit about working in design company side by side with my freelancing job thanks.

  7. Liz says:

    Really interesting. Why spend your life making someone else rich? Learn to earn what you are worth.

    • Danny Iny says:

      I absolutely agree, Liz – the important thing is to be smart about it. :)

    • James says:

      We spend our lives making each other rich. Yes some take a lot more than they give given their position. However, those that collect big paydays with perceived “little effort” often have empire depending on them and/or their family.

  8. Tram Tran says:

    Danny, awesome article. You just confirmed my belief that nothing is easy but nothing is impossible too. may I add we should do things that we are passionate about and the work and hours put in will seem like nothing. I’m building my blog from scratch and I’m inlove with it. I put in heaps of hours both writting great contents, generate new ideas as well as doing networking. The results have been very worthwhile;)
    keep up the good job Danny;)

    • Danny Iny says:

      Thank you, Tram. I love it: “nothing is easy but nothing is impossible” – that’s exactly how I see it.

      And yes, I completely agree with you – if we aren’t passionate about it, we won’t stick through to the end point of getting the results that we really want to see. :)

  9. Paz says:

    I needed this today! Thank you. I am currently trying to transition out of a day job and have lots of different avenues that I can go into…but which one is the right one and which one is the most time/cash effective is the biggest question!!! I love the way you broke it down. Thanks a lot!!! Gave me some perspective when I needed it.

    Take Care,

  10. Mohul says:

    Whoa! So accurate and true.. My eyes widened and heart beat raced ahead as I read the words.. and as the picture cleared before my eyes.. as if this content had been written for me.. the fog slowly gave way to sunlight.. and prompted me jump in the joy!

    This is exactly what I was thinking since last 2 years, while working in a 9-5 ‘secured’ job as SEO Consultant.. Why, why and WHY I am not able to kick start my own online marketing ventures to become a self sustained entrepreneur..

    Reason: I need money now to pay my bills.. and passive income will only start after it takes some blood and sweat of mine..

    Awesome post!! I will take a printout and keep it everywhere I read.. and read it again and again..

    I shall plan it out.. phase by phase.. and make it happen.. coz it has to happen..

    Thanks a lot!!

    And apologize for the long ranting.. words just kept on coming.. Cheers, Mohul

    • Danny Iny says:

      Mohul, thank you for your heartfelt comment – it really made my day. :)

      I wish you lots of luck and success as you plan out your path to freedom, and then make it happen – cause it’s got to happen! :D

  11. AJ says:

    Good for everyone to read. We all get stuck in this hourly mindset. We should look at what result we can deliver instead.

  12. Danny Iny says:

    Yup, I couldn’t agree more. :)

  13. Robyn says:

    Great article! I work a full time job in the corporate world and have a side business. I’ve been trying to work more on my own business and create my own equity (and more income :) ).

    I think I’ve been making it too complicated and overwhelming. I like the way you simplified it. It’s in ‘bite size’ chunks.

    Thanks for the article!! :)

  14. Sergio Felix says:

    Hey Danny,

    I’m afraid I started doing it exactly the other way!

    Instead of telling my clients I would charge them by the hour I said “I’ll charge you on the task, no matter what it takes…”

    Oh boy how I regret having said that.

    Specially when even the client doesn’t knows what he wants/needs it is a huge waste of time, efforts, money and in the end you may look like you ended up under delivering.

    Not without saying that they think every day is a Black Friday.

    Big NO-NO, period.


    • James says:

      Just give them a maximum hour cap that you will spend on a specific project and then allot that time out. Include any support in that bill. Anything over the budgeted hours? They pay for that. Double the amount of hours you think it will take and ask double for what you think it will take to complete. If they turn you down, you dodged a bullet.

      • Kevin says:

        I’m becoming an avid reader, James (and thanks for this post, Danny!) — but this tidbit above from James speaks so true to me: sometimes better to aim high (and make double what you would otherwise) or just dodge a potential-trouble-client altogether! (been there…hah)

  15. Cindy Capps says:

    I just fell upon your website today and it gives me hope. I am so tired of sitting behind a desk 40 hours a week. I would love to offer my time to others in need…need of their house being cleaned or groceries being bought or just simple errands run for them that they may not have the time to do themselves. How would I go about offering my services? How would I even begin to think of a scale of charging people for this type of service? Thank you so very much…..

    Tired of Wasting My Time

    • Chris says:

      Cindy, it’s great that you want to lose the j-o-b and work for yourself. I started housecleaning in high school and that led me to other things that have been very good to me. My suggestion is to contact cleaning services and find out what they charge. There are plenty around. Call several, as local as you can get. Then, don’t try to compete with them at all, start letting the people you know and run into daily what you are trying to do. Put up fliers at places you actually do business, talk to the owners/managers, etc. You want referrals from people who know YOU (or think they do). So let everyone know, even offer a referral fee to them if you get a job through them. On your first job do the best work you possibly can, be fair with time/pricing, and ask for more business. It will come, if you provide a good service for a good price. For picking up groceries, etc.. that all depends on your location, logic would dictate that it would come down to the same hourly rate as for housecleaning though. Just my opinion. Good luck!

  16. Another thought-provoking article, thank you!

    I definitely agree that the “money while you sleep” dream is much harder than most people are lead to believe, and despite what some gurus are touting, there’s no magic pill formula! I find for my clients, the easiest path to leveraged cash is group coaching programs and spin-off info products created from the content of the coaching programs. Cheers!

    • James says:

      If your only goal is to “escape a day job” so you can be lazy and pursue nothing, you will fail. There are too many people who are extremely passionate and excel at what they do in industries that fill valid needs. If you don’t stack up against them you sure as hell aren’t going to beat them in the marketplace for limited resources–especially if your chosen industry carries a dubious reputation.

      From the time I was 12 until I was 18 I tried every “get rich quick” scheme in the book. Ebooks, affiliate marketing, eBay business, multi-level marketing. The only thing that ever paid off was gaming online casinos by taking advantage of their “signup” bonuses. Made $1200 in 2 days. I capitalized on the greed of the casinos to get new customers. For everything else, I spent thousands of hours on various businesses and more often than not never made a dime–and sometimes lost money after expenses. After working a job at Quiznos making minimum wage, I realized putting sandwiches in people’s mouths paid more in a day than years worth of “online business” effort did.

      I’m now a television casting director and make an OK living. I live on the beach and I collect paychecks. But as this article suggests, I work for those paychecks. I’m looking to grow my business, and I’m under the opinion that if you haven’t been paid in a particular industry in the past, you’re probably wasting your time to try and enter that industry ALONE with no experience or relationships. Paying someone to teach you is also a big mistake–you should WORK and be COMPENSATED by the best in the industry until you can go off on your own.

      If “affiliate” marketing is really your jam, then go ahead and work as someone’s assistant and learn the ropes that way. I urge you to resist the temptation to spend thousands of dollars on “ebooks,” “seminars,” and “coaching” in hopes that you’ll be able to turn around and do the same to other people, so they can turn around and do the same to others, etc.

      Don’t fool yourself–you will work the majority of your life in a specific trade. If you can hire, outsource, license, and sell–you’re on your way to increasing your effective hourly rate.

  17. Alexander says:

    Duuuuude. This is really really good.

    I don’t know why it smacked me in the face, but it did.

    I haven’t seen such a clearly written “scale up” strategy yet on a blog. It seems like a lot of people today (myself included) are doing that whole ‘serial entrepreneurship’ thing (I hate the phrase).

    The thing is, most of us also are trying to go from 0 to 100 — and neglecting the inbetween steps is pretty difficult to do.

    Unless you have a ton of money, or a ton of free time, or are young and willing to starve, then what you talked about scaling is crucial.

    I especially liked where you talked about improving your per hour income, thus freeing time, and thus providing a timeslot to work on your next project.

    I love systems.. and thus loved the idea behind that.

    Awesome, thank you.

  18. Susan says:

    I’ve freelanced for over 10 years. Either full-time or on the side. Sometimes it works, sometimes it doesn’t. It really depends on what your’e trying to accomplish.

    I trade time for money. Sometimes I hit on something where it’s fairly automated and just makes money for periods of time. Sometimes I make no money but I’m working toward a bigger goal.

    It’s dangerous to funnel it down to one system until you truly know what works. And what works for one service, business, or product doesn’t work for everything.

  19. Maryam says:

    Hi Danny,
    Is the bottom line courage and skills or, both? Thank you for doing the math, I love it. My middle school aged son is reading this with me, I can use this article to help us both. Enjoy all the good.

  20. Cassie says:

    Interesting piece. I would say the people who’ve put the work in to build their businesses are then leveraging those years of work. So, you can then earn a lot from sending out one email (which is why the internet marketing sales letters sound so compelling, it doesn’t work for most people who haven’t built the list to have that sort of leverage).
    I love your section on transitioning from the corporate world to creating your own fortune. Exactly what my corporate to home business mums need, and so well written.

    Thank you!

  21. Kit says:

    I have been trying to do “consulting” with schools for the past 6 months and have 0 clients! And I’m an experienced educator!!! Any ideas?

    PS: I do not have a day job so it’s this or….???

  22. Emily says:

    Absolutely loved this piece. And I appreciate your advice to the recent college grad looking to start a graphic design freelance business–which encourages him to essentially broaden his work experience in conjunction with his freelance goals.

    Just subscribed to your Passive Panda listing, can’t wait to hear what else you have to share.

  23. Shirley says:

    Hi there,

    I’m from Singapore.

    Thanks loads for the awesome, inspiring, thought-provoking article! It makes me realise my follies – I’d lost much due to kindness by giving away many hours of free time (I’m a tutor) to students. Now, I’ll stop trading time for more money! Thanks for this financial literarcy!

  24. Ana says:

    Hi Danny,

    This was a terrifically thought-providing piece. I love your sense of realism in a world where dreaming is the norm. Nothing wrong with dreams, I’m doing everything I can to make mine come true. But yes, we do have to trade hours for income and I know I’ll be trading mine for some time to come.

    I have a freelance editing business that’s just getting underway (at least as far as getting clients), so that will definitely have me trading time for money for a while yet. Next comes ebooks and other informational products, some physical products as an affiliate, and coaching. For the last, I was really wondering … with the economy as it is, is there really a viable market anymore for coaching? I mean, who can afford to hire a coach anymore?

    • Ana says:

      Oh my … a mistake from an editor! “Next comes ebooks …” becomes “Next come ebooks …”

      I’m a stickler for such things, and it was my own mistake. Kudos to you again — and to your respondents here who really seem to have the get-go.

  25. Bojan says:

    Although I liked the article a lot, it assumes a lot of things that are pretty hard to stomach. I have been working for the past year and I find it hard to believe that someone would hire me to consult for them for $100 an hour. The other is that after this starts gaining some steam it would be easy to transition to part time work. It’s very hard to persuade an employer to switch you from full time work to part time work.

  26. John says:

    Hi everyone, I am new here. Nice commentaries I can see. OK. I need some pieces of advice. I live in Africa. My goal is to make $60,000 online in 2012. i figured if I can make $1 x 60000 I will achieve my dream. Please I need your suggestions on very simple steps you have done to make $1 daily and how I can duplicate that.


  27. John says:

    Very motivational post! Lately I’ve been questioning the corporate ladder myself. Right now as an engineer I work 4 x 10s, a great schedule for the side hustler. But, if I was going to move up to a supervisor position I’d probably end up putting in 20% more time for about a 30% raise. So when you think about it. I wouldn’t really be effectively increasing my hourly rate that much, especially if I had to give up my side hustles.

  28. Layth W says:

    Great post.. I really appreciate PP for the very logical and down to earth approach to issues all of us face. As it is I work a supervisory position but spend a lot of time and effort for how much myself and my family still go without. I am looking to greatly improve this and the motivation I get from PP is most definitely a help factor.

  29. Nandhu says:

    Awesome… Awesome… I will say 1000 awesome to this excellent post for a guy who wish to quit the rat race and then become self employed and a investor and then finally an entrepreneur… Nice guideline to make this transition… Awesome again…

  30. This was such a powerful blog post. Their are so many people that don’t understand what you broke down because you have to invest time and setup a strategy for yourself to become truly successful in areas that you choose to go into. A lot of people get lost in these info products,books, and audio courses without really setting up a plan to leave their job and be successful in their venture.

    Just as you suggested if you start at a lower rate but higher than your per rate as what you’re at right now you can then leave the position of where you’re at right now in a lesser time.

    But, a lot of people don’t understand this pattern and look at the figures of making $30k per month but not the side of the plan as if how am I going to get their in a shorter time without having to sacrifice as much.

  31. Jarod says:

    So Danny,

    I know a good understanding of how to make passive income online (affiliate marketing, cpa, cpm, cpc, and such), but I’m still learning, and one of my main concerns is if making my first penny will be difficult, as I want to blog/write and make money too ($28,000 by the end of 2012). How long do you think it’ll take me to make $28,000 if I invest 11 hours each week on my blog (I’m a college student)? And is it even possible? Because I’m not really sure if it’s a realistic goal are not (check out my blog’s 2012 Goals page by the way).

  32. Shondell says:

    Great post. These steps are perfect for transitioning out of a full time job into your own business.

  33. Mark Evans says:


    One of the best pieces I have read in a very long time! I too never understood the passive income mentality.Until now, I had never heard anyone verbalize it. You are spot on! Investment income is the only truly passive income I can think of off the top of my head. P.S., heard you on a podcast last week and it was sensational. Thanks.

  34. Nick Carter says:

    I never realized how much I had blindly adopted this mantra from Ferris. That’s an eye opening article.

  35. Donna says:

    My situation is I work full time as a web designer, do freelance writing and some freelance photography. I also sell plants (hostas). I would like to develop the hostas to a full time internet business. That along with maybe some publications as gardening is not a year round hobby. So the post has given me a lot of ideas, maybe too many. I feel like I need to sit down with someone and just bounce ideas off of them. Am I going in the right direction here? Where I live jobs don’t pay well and I really need to find some other way to make money.

    • James Clear says:

      Hi Donna,

      That makes sense … and it’s great that you have a lot of ideas. Passive Panda will be launching a service soon that might be a great fit for you. It will help you narrow down the ideas that make the most sense and then scale up the best one.

      Keep an eye out for it. And thanks for reading!

  36. Sheyi says:


    I’m following you everywhere!

    I love this post more than the one’s I’ve read so far from you (guest posts).

    Please, permit me to choose a good topic for my blog post from this post. I’ll like to write on the investing arena $150k – $11Million (I’d make some research and do case studies).


  37. Bob says:

    I totally agree. Spend your time on your business, not someone elses. I am in Network Marketing working on my fortune part time, working on my own brick & morter business fulltime. I have a 3-5 year plan for my Network Marketing business.

  38. Peach Front says:

    I’ve been a freelancer for decades and I can tell you there is a huge gaping hole in Step 5, QUIT YOUR DAY JOB. You have to earn SIGNIFICANTLY more money as a freelancer to be in the same place. IMHO if you are earning $25 per hour on your job, you need to be billing $100 an hour as a freelancer. Not to get ahead…most freelancers never get ahead if they do it full-time. Just to stay in the same place.

    Reason: You pay self-employment income, you pay for your own health insurance (if anyone will sell you health insurance at any price), you pay for your own down time (getting called for jury duty or going on vacation can deep-six your finances in a hurry as a freelancer). You probably pay more for credit or get turned down for credit, so there’s lost opportunity while you save up for the things you want to buy. (I pay upfront in cash for my cars; are you ready to do that?) In some states, some people should probably never quit the job until they are of Medicare age, no matter how much they earn free-lancing, because if you can’t buy health insurance that will actually cover you then you will need to either be married to a spouse in a secure job who can get the health insurance or else you risk not being covered.

    I agree that free-lancing is a way better way to earn money than the passive income nonsense, which is just a scam. But my advice is to look at free-lancing as a way to improve your life and finances, not as a way to quit your job and your benefits. If you want to quit your job, you have to look at taking other steps, such as finding a spouse who has a secure job in a secure field with health benefits.

  39. Michael says:

    Great article overall. The only downside was bashing Ferriss. He makes it very clear that it can take hours of commitment to run a business. He also makes it clear that you can outsource to help free you up.

  40. Richard says:

    Very motivational post! Lately I’ve been questioning the corporate ladder myself. Right now as an engineer I work 4 x 10s, a great schedule for the side hustler. But, if I was going to move up to a supervisor position I’d probably end up putting in 20% more time for about a 30% raise. So when you think about it. I wouldn’t really be effectively increasing my hourly rate that much, especially if I had to give up my side hustles.

  41. Belinda says:

    Bull’s eye! You hit me!

    There’s truth in every line you have written. The very reason why it seems that my actions don’t go along with my goals is that in my mind I wanted to stop trading my time with money. Which I now understand to be wrong- it should have been adjusting the relationship with my time and money.

    The point on delayed gratification is highly appreciated. Most individuals rarely land a sufficient passive income because their thoughts and actions are focused on current financial demands. I’m just glad that I have now shifted my perspective. Thank you for this post.

  42. Andrew Groat says:

    Brilliant article Danny!

    I’d always considered consultancy and transitioning to higher income activities, but the way you have laid this out as a concise roadmap gave me an amazing moment of clarity.

    Great work!

  43. Zoran says:

    HI Danny

    Your article is so true, and now when I read it, it just confirm some things that I keep back in my mind for years. I am working full time as web developer, and freelancing trying to boost my income.

    At this point, my freelance income is about equal to my monthly salary. There are months when my freelancing income is bigger than my salary. My yearly income from the day job is about 12.000 euros, and I am charging my hour as freelancer 15$ per hour. This involve of course many times working for the weekends and after work,until late at night.

    The next step is to produce more works, so I can increase the hourly rate that I am charging as freelancer.

    One aspect that should be considered however, is that my corporate work pay for my health and pension insurance, which if I quit my day job I will have to pay from my earnings as freelancer.

    Therefore, to quit my day job, I have to reach somewhere about $30 per hour, before to make that move. Or it should be even higher? I have yet to calculate that. Yearly my insurance costs about 6.000 euros.

    It would be interested to hear from you how you would you calculate this (insurance) and other costs connected with the work as freelancer.

    From the other side I will then work at my own pace, no bosses around, and have possibility to start earning more at some point… However, there is still risk involved. It may happen very well that at some point you simply have not enough customers.

    It would be nice if you address some of the doubts that I have about risk that is involved in quitting the day job. When is the right moment? Which point should one reach to make that move?


  44. Alex says:

    Passive income is really easy to achieve. Let’s say you want $10K/month in passive (truly passive) income.
    Save $2.4M (or find a rich uncle, sugar daddy, angel investor, etc. who would give you $2.4M). Then buy a portfolio of stocks and bonds that pays ~5% dividends/interest.
    You’re done!

  45. Very good and down to earth article, Danny.

    I agree fully with a graduated approach you suggest. I would also add that changes like starting your own business, on the side or full time, requires patience and engagement/love to what you do. Also understanding of effective and strategic time use is often different than as an employee – every decision requires your full attention and also responsibility for potential failure.
    A graduated approach gives you time for testing without high risk. It will also teach you some strategic decision making so important for every entrepreneur.

  46. Mark_Bennett says:

    As all successful entrepreneurs say, “Time is money”. If you learn the art of time management then you can succeed literally in any business. The more time you spend in a business, the more you learn about it.

  47. Great article! I believe that we are always trading time for money in some form or fashion. I did it for about 40 years in the corporate world; however, you can rarely build wealth that way. Now I work in real estate which is solely commission based; however, it also allows me to build my multi-level marketing travel business at the same time. It works well because all the customers we meet in the real estate business become prospects for my MLM business.
    We have a 5 year plan for passive income that should us the type of lifestyle that I ultimately desire.

  48. Dan Snow says:

    Love this article, Danny.
    It’s straight forward and the truth. Most people will never live the way they want to because deep inside they know it is going to be a grueling start with long hours of investing TIME before it pays off. You also gave a great example of how to ease into generating more money for less time.

    Thank you, and keep this stuff coming!


  49. Patrice W says:

    Wow! I am doing this RIGHT NOW. It’s amazing. This article is exactly what I needed to read to ensure I’m starting down the right path to starting my consulting business. I had my first client last week and I’m exhausted! But, I can’t wait to do more. I’m at my regular job now, but I know it will take time to transition out of it, so that I can focus on what I really want to do. Thank you so much!

  50. Mike Kawula says:

    Super powerful Danny and thanks. Started an online dropship company 3 years ago for that purpose and we’ve rocked to #144 this year by Inc. Magazine . Problem is that I’ve created a job for myself and I am know working at restructuring so I can step back and focus more on better output for greater returns. This hit home, thanks!

  51. Scofield says:

    Its an awesome post. You did a great job and I like your ideas about making money online. Thanks for sharing.

  52. joshua says:

    Why spend time making someone rich. i told myself i will work for myself for the rest of my life. each minute is mine not making a company or any other person rich yet i get peanuts and die poor with loans to pay

  53. This is a great article. You’ve managed to present in an easy to understand way some of the consulting practices that people spend several years and read many books trying to understand. With just a little marketing know-how, I think a majority of motivated people could implement this plan.

  54. Anne Botha says:

    I love the article! You couldn’t have expressed it any better. Reminds me of something I bumped into a few weeks ago.

    I was looking into taking on a business partner and I had a number of interviews with people who had expressed their interest.

    Oh boy, talk about wanting the dream lifestyle with no clue at all about how much hard work it takes to get ramped up and a foundation in place.

    It made me want to rip my hair out at the myopic, lazy, “filled with a sense of entitlement” approach that many of the people I spoke to had.

    For myself, it’s been a long road to build up my credentials as a consultant. What really pushed me to dig deeper was immigrating to a country that doesn’t recognize my qualifications and is culturally the opposite of what I knew and understood about doing business.

    While painful at times, it was a gift. I dug into learning the culture like a farmer sent to Mars. Study, apply the process, wait for progress, test the results, variate where necessary and do it all again.

    If I could sum it up in one sentence:

    Build well now so that you can massively leverage for future to-be-realised gains.

    The end result, I have doubled my rate every year for the last 4 years since I got to my new country. Now I work fewer hours than I did before, but make a considerable amount more.

    That would not have been possible if I didn’t work like crazy for the first 3 years to re-engineer my personal brand, learn a new culture and keep getting up no matter how awkward or frustrating things became.

  55. Taran says:

    Great post.. I really appreciate PP for the very logical and down to earth approach to issues all of us face. As it is I work a supervisory position but spend a lot of time and effort for how much myself and my family still go without. I am looking to greatly improve this and the motivation I get from PP is most definitely a help factor.

  56. Josh says:

    Most interesting. Thank you.

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