- in Mindset
Since you are now streaking like an arrow towards financial independence, you are eventually going to start asking yourself more questions about your career and earnings potential.
I’ve got a dirty little secret for you. Your earnings derive more from where you are in the food chain of the economy or a specific company than from your hard work.
What’s The Economic Food Chain?
The best way to explain this is through a few quick examples. If you are employee number 20 at a very successful startup, you could in theory make millions, but it will earn little compared to the founders. They are the majority owners of the business. You are not.
If you work for an oil and gas company as an engineer, you have a fantastic job, but you will never earn anything like the returns of top executives.
Some Of The Characters At The Top Of The Economic Food Chain
- Private Equity Investors. They work hard. They invest. They own. If the business does well, they make a great return on their time.
- Venture Capitalists. Ditto.
- CEOs. They marshal the efforts of others to build value–and get paid very well for their time and efforts.
- Entrepreneurs. This is the hardest route, but often has the most upside.
- Professional Investors (owners of assets) in general.
Have you noticed the trend here? The people at the top of the food chain either own significant assets or run an entity that has many, many people creating value on behalf of the owners of the company. The next rung down the economic food chain would include elite professionals (doctors, lawyers, Ivy League professors).
I could have included professional athletes, actors, singers, and the like, but these birds are so rare that they hardly merit discussion. The media keeps our attention on this sub-group because they are interesting and unusual, but their lives’ are irrelevant to almost all of us (from the point of view of emulation). What’s not rare are owners of real estate, owners of stocks, owners of bonds, founders of small businesses, and entrepreneurs of all stripes.
Are You Playing Monopoly or Working At The Park Place Hotel?
Another way to phrase this question would be are you a person playing the game of monopoly, owning assets? Or do you simply work at Park Place Hotel (a spot on the board) drawing a salary? Almost everybody fits into the latter category, so don’t feel bad if that’s you!
Mindset And The Food Chain
The strangest aspect of the economic food chain is that our assumptions about where we fit in the chain stem mostly from how we grew up. We mimic what we see in our immediate environment. Indeed, we are often totally unaware of levels significantly above or below us in the economic food chain. We tend to work with and interact socially mostly with people from the same place on the food chain. We often even live in a neighborhood filled with people at the same rung on the food chain.
Mighty Investor is here to rescue you from your own limiting beliefs. If you made it this far in this article, you can move up the chain. You have the drive and brains to not be off sucking down Kim Kardashian videos in your free time!
It goes without saying that the life and career of a work-a-day employee can be a truly joyful life, and many are called to serve in specific professions. This is not a discussion of the overall value of someone. This is simply about where you are plugged into the economic food chain. Indeed, the economic values discussed in this post and on MightyInvestor.com teach you how to amass wealth, but they are not the only values that should drive life decisions. For many of us, other callings take precedence over becoming a master of the game of monopoly.
Nonetheless, for purposes of MightyInvestor.com, the further you move up in the economic food chain, creating equity in companies you found or garnering long-term wealth by purchasing assets, the wealthier you will become and the more quickly you will amass a financial buffer.
A Word of Warning
You should not take from this article that you are not making smart moves unless you are the founder of some massive company or the owner of a hedge fund. That’s just not realistic for all but a tiny minority of individuals. Indeed, expecting that from yourself could be analogous to expecting that you become the Babe Ruth of investing. So the trick here is to be realistic about what your background, talents, and general life situation allow–rather than shift to pie in the sky thinking.
Where Are You on The Food Chain? Where Will You Be In The Future?
Moving up the economic food chain doesn’t happen overnight. Yes, a shift in mindset is crucial, but an improvement in your career and financial circumstances takes hard work and consistent application over years. It’s quite doable, but it takes focus, effort, and strategic thinking. Can you see yourself owning stocks? Real estate as an investment? Starting a successful company? Why or why not? What would you like to do further up the chain that scares you? Why?