How do we all make money?

In rough terms, there are only two ways to make money. Trade your time for money or trade your capital/assets for money. Most people does both throughout their lives. They have a job where they trade their time for money and they have some assets in form of surplus capital in a savings account or in investments that generate some money.

With this in mind, there are only four ways to increase your income. On the “time for money” side, you can spend more time working or you can learn unique skills so you can demand a higher salary for your time. On the “asset for money” side, you can acquire more assets or use the ones you have more efficiently.

The good thing about trading your time for money is that it is straightforward and our society is build up around it. The first 15 to 25 years of our lives are spend in school getting ready for a job and then suddenly the salary ticks in every month. The downside about it is however that there is a cap of how much one can earn. Our time is a scarce resource (only 24h a day…) and most of us can’t scale up the hourly pay because other people who have a similar skillset are willing to do it at a market wage.

Our focus is therefore on increasing our assets/capital income. We like the idea of this kind of income, as it does not require our precious time and does not have a cap. We do not currently have a goal attached to our asset/capital income, but we are certain that it will give us some benefits in the future whether that will be through a spending spree or a reduced need to trade our time for money.

How do you make your money?

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