The idea that we should stop trading time for dollars is rooted in the idea that our work has value, and when we charge by the hour or price hourly, we’re limiting our income potential.
After all, our time is limited. Using basic math your business revenue is based on hours multiplied by your hourly rate.
However, this is a gross oversimplification designed to sell the idea that you should be making passive income so you can make exponentially more money.
Every story and marketing message needs a villain. For course and program creators selling us the dream of making millions, trading time for dollars is a compelling villain.
The hero is so-called passive income. But within online business, very little income is truly passive. A more accurate term for revenue generated at scale through courses or programs is leveraged income. There’s definitely still work involved.
The characterization of “trading time for dollars” as the villain is not a fair or entirely accurate one. It’s rooted in trying to sell us a path to freedom and wealth that’s unlikely to be accessible for the majority of us.
The online business industry is obsessed with the idea of the 7-figure business. However, despite what celebrity entrepreneurs teach, current data from the Spectrem Group shows that 3.5% of the general population in the US are millionaires.
That same research indicates that the likelihood of becoming a millionaire is greatly impacted by a multitude of factors including education, race, and age.
Additionally, research from Bell et al (2018)andMarinoni & Voorheis (2019) shows how “gains from an entrepreneurial activity are concentrated in the top of income distribution, implying a broader picture of unequal chances of entrepreneurial success.”
In short, if you have financial resources, you’re more likely to be successful as a business owner.
It may seem that millionaire status is more attainable as an entrepreneur, especially if you stop trading time for dollars, but there’s an additional factor to consider.
The reality is that having a business making a million dollars or more in revenue doesn’t automatically equate to greater personal wealth.
If you pay careful attention to businesses that are built on the idea of not trading time for dollars, many times you’ll see a shockingly low-profit margin as they have sky-high expenses.
While they’re hitting a big revenue number, the risk they’re incurring chasing a potential personal payoff is immense, and it’s not something that a lot of people have the resources or resilience to do.
