The -60% Return Trap That You Should Know About

The goal of investing is not for money, it is for something bigger. Your freedom.

You need to recognise this, before even starting your investing journey. And if you still have not adopt this mindset, you really think to start shifting your perspective.

What freedom means is the amount of free time that you have and you need two elements to achieve freedom - health and wealth. Since, I'm not health expert, so let's talk about wealth.

Wealth is defined as the amount of time you have survive financially if you stopped working for money. This means that if your passive cash flow is more than your expenses, you will never have to work for money again. At that stage, the only thing that limits your wealth is your health.

Sadly, there are people whom in the pursuit of wealth, neglected their health. At the end of the day, both of these must come hand in hand. If you have $10 million in the bank, with only 3 days to live --> it is quite sad, isn't it?

This is why I invest in the first place. I want to get money out of the way as soon as possible, so that money is not a considering factor of how I spend my weekdays (i.e. working).

The -60% Trap That You Should Get Out

Let me make you an offer.

Let's say you give me $5, and I give you $2 in return. Will you take me on this offer?

No? Hmm...okay, how about I raised my offer.

You give me $500, and I give you $200 in return. How about that?

Still no? Wow, you are a tough bargain, aren't you.

Hopefully, by now you see what I am trying to highlight here. Clearly, the concept of 5-for-2 is a bad return. A negative 60% return. Nobody should be insane enough to do this for over 40 years.

Yes, you guessed it by now.

I'm talking about trading your Monday-to-Fridays of servitude for the two days of freedom that you enjoy during the weekends. Sometimes, people are asked to work over the weekends, and it could even end up being a 6-for-1 return, a devastating negative 83.3% return.

"Gin, life is not about money. Why are you always talking about money?"

Well, you are absolutely right and I agree with you. Life is not about money, it is about your TIME. Money is in abundance, the government is printing that pieces of paper every single day. But time? It doesn't take a genius to know that you only have 24 hours a day. Considering if you sleep for 8 hours, you are left with 16 hours.

And so, if you want to forever be trading 5 days of servitude for 2 days of freedom, here's something to think about, especially if you have kids.

Correct me if I am wrong, the last time I checked, kids grow up on Monday and Tuesdays as well. Wait, I heard they grow up on Wednesdays, Thursdays and Fridays too!

Yes, be it your kids and other relationships, they do not wait just for weekend to grow. This means if you are okay trading 5-for-2, then guess what, your kids are growing older and so do you. That's right, life is not about money. It is about time.

But you are not getting money out of the way, then sadly, you are going to suffer the negative 60% return for a long time. And yes, your kids are going to grow older as you continue to make that trade, and your relationships suffer as a result.

"Sorry, I will be late home today, take care of your own dinner"

"Sorry, I will skip dinner today, have a meeting tonight."

"Sorry, I have to work during the weekends again."

And soon enough, you get the question, "Why are you always so busy, and not have time for me?"

Or even worse. They don't even bother asking you that question anymore.

So yes, you are absolutely right. Life is not about money, it is about time. Time is the one that build your relationships.

This is the trap that you desperately need to get out of and the only way to do it is to create systems of passive income as soon as possible.

What's The Alternative?

I can tell you upfront, at the point of writing, that I am no longer in the 5-for-2 trade.

Don't be envious just yet.

I am in a 7-for-0 trade. Yes, a whopping -100% return. I am working 7 days a week, every single day. But I know, I will only be doing this for a few more years.

Because here's the thing, the 7-0 trade is intentional.

Because I know that eventually that 7-for-0 will eventually become 0-for-7 for the rest of my life. This means, I work only because I want to and not because I need to.

On Monday to Fridays, yes, I worked for others and I put in my 100% - because how you do one thing, is how you do everything.

But on weekday's evenings and weekends, I work for myself and I give it 200%. For those who say that you don't have time, most of it is bullshit. If you have the time to watch YouTube, Netflix and scroll Facebook - you have the time. You just don't have the discipline.

Don't get me wrong - I do indulge in Netflix time to time - but I allocate time for own personal development.

So what do I focus my time on? Investment and business.

Why do you want to focus on these two elements?

These two elements, once mastered, is what will allow you to divorce the marriage of time and money.

Yes, if you master either of these elements, you will eventually build up a system such that you no longer have to trade time for money. An example is how I sell options to collect cash flow every single month.

As a general benchmark, your portfolio should be able to yield around 1% cash flow every month (Yes, much better than any dividend stocks). However, I only recommend to look at selling options once your portfolio is larger, say $30,000 or more.

Today, I don't really need to focus on my investments since the process is already highly systemised and I just have to follow the process, and I know my portfolio grows over time. Heck, I don't even read the stock market news or annual reports. The secret? Fundamentally good companies tend to do well over time and those are the companies that I focused on.

Now, I mainly focus on running my Amazon business - simply because it is something that I can do outside of my working hours in a manageable way. It does involves a capital to start, so don't buy into marketing messages that say that you can start the Amazon business with as little as $300. It might be possible if you are based in the US, but outside of it, it will not be easy. A capital of $5000 will be a much comfortable amount to start it. Don't take my word for gospel though, after all, I'm still learning 🙂

The Bottom Line

Before I finish this article, I do have to emphasize that there is nothing wrong in a 9-to-5 job. I am in it as well, after all, and I am not complaining since the stability of the income allows me to leverage from banks to buy properties.

But there's everything wrong with it, if you find that your relationships or health is suffering because of the job. This is why I want people to get money out of the way as soon as possible so that working at a job is a choice and not necessity.

All in all, I highly encourage people to start exploring into investments and business. Focus on one at a time, don't try to master both at the same time, as it will be counterproductive. I started with investment first, because it was much easier - but if you are more ambitious, you can always start with business.

As a final thought, I hope that you now recognise that, while it is true that life is not about money - if you cannot get money out of the way, you will always be exchanging time for money. And time is the key contributing factor to build deep relationships.