Why Owning Assets is Better than Having Job Experience

2 min read

I rolled out of bed this morning, logged into my brokerage account, and saw that I had received $30 in stock dividends. That’ll be worth about $25 after taxes.

In a couple hours I’ll show up to work and earn about $38 during my first hour in the office. That’ll be worth about $30 after taxes.

The beauty of the first income stream is that it required no effort on my part. I bought shares in a stock index fund a couple years ago and moved on with my life. Now, every three months that index fund pays me dividends. I don’t even have to walk to the mailbox to collect the payment.

The second income stream, by contrast, requires work. I have to get out of bed, get dressed, drive to a specific location, sit in a specific spot, and work on a project that was assigned to me.

I earn income from dividends through being an owner and doing no work. My income is purely dependent on how many shares I own. Conversely, I earn income from my 9-5 through being an employee and actively doing work. My income is dependent on my productivity and my job experience.

I much prefer to earn income through being an owner rather than being an employee, which is why I am making the conscious decision to acquire assets.

Stocks and REITs reward me for being an owner by paying dividends and generally increasing in value over time. 

This blog is also an asset. Each article works hard to earn me a few dollars each day through ads and affiliate links.

By owning stocks, REITs, and a blog, I have a group of assets that work to earn me money without my oversight. These income streams don’t require me to adhere to a strict schedule, a commute, or a dress code. They merely require ownership.

This simple truth is why owning assets is better than having job experience.

I work with plenty of people who are in their 40s and 50s earning $60+ per hour. They truly deserve their hourly wages because they have years of experience and expertise that add real value to our company.

The problem is that their job experience only buys them the right to earn a high income for their time. It does not provide them with the luxury of earning income while they sleep. They still have to follow a dress code, commute to a specific place during specific hours, and answer to a boss. They still have to trade time for money.

Of course, there’s nothing wrong with being an employee if you enjoy the work you do. But work situations can change without warning. Layoffs take place. Great bosses leave. Cool coworkers move. Bonuses get cut. Shit happens. If you don’t own assets that provide passive income, you could be stuck in a miserable work environment that you’re forced to embrace to earn income. 

This is why owning assets is better than having job experience. Assets provide income and time while job experience provides income at the expense of your time.

My favorite free financial tool I use is Personal Capital. I use it to track my net worth, manage my spending, and keep an eye on my monthly cash flow. It only takes a few minutes to set up and it makes tracking your finances simple and easy. I recommend trying it out.

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Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

8 Replies to “Why Owning Assets is Better than Having Job Experience”

  1. Zach, I am new to your blog and really enjoy your posts. Great information and visuals on investing and how to enjoy life along the way.
    I opened a savings account at the age of 8 or 9 and really enjoyed making money (interest) on a very small amount. Today some 40 plus years later my interest, dividends, and capital gains were more than what I made at my regular job. This “extra” income has allowed us to travel and enjoy life even on a modest income.

    1. Rick, thanks so much for the kind words, I’m glad you’re finding the blog to be valuable. Congrats on the ability to travel and enjoy life as well, it sounds like the savings in your early years has given you serious flexibility today.

  2. As someone who has reached FIRE, I find it hard to find blogs that keep me interested post after post after post. Yours is the one I keep coming back to. Your data analysis is unparalleled. Your graphs are beautiful and thought provoking. I love the frequency and brevity of your posts and find inspiration in many of them. Fourpillarfreedom has its own tab in my browser that never gets closed, only refreshed. Keep up the great work and enjoy the journey!

  3. I couldn’t agree more with this article. Income funds assets, assets create wealth.

    Compound your wealth with companies who are just not supplying you with income, but offer employee stock purchase plans or year-end bonuses that have a stock-option component.

    Assets are like little elves constantly working while you go about your business.

  4. I am 100% on board with this line of thinking. The key is to build enough capital (through your normal W2 job typically) so that at a certain point your capital starts working for you.
    Passive income streams are incredible in so many ways. First your money earns you money while you sleep. Second there are so many more tax advantages for money earned passively versus actively. Typically a lower tax rate. Especially if your dividends are qualified dividends with a max 20% capital gains tax (+ 3.8% ACA).

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