Last year, I decided to calculate how many hours I actually worked. The busiest period for me was in November and December when I was focused on renovating a rental house.
At the time, it felt like I was working endlessly—five days a week, dedicating every available hour. I was designing, cutting, smashing, building, tiling, and nailing, often bleeding or swearing in the process. Lunches were eaten on the go, and weekends barely gave me enough time to catch up on groceries and cooking.
But when I added up all the hours, it was just over 200 hours of work. If we assign a wage of $35 per hour—a decent working rate—that equates to $7,000. Enough to buy a reliable used car or cover a year of frugal living. It felt rewarding to accomplish that even during retirement, though the payout won’t technically come until later.
The Silent Workforce of Money
While I was sweating away, my existing investments—my “forgotten money collection”—were also working. Here’s what happened during the same two months:
- My rental property generated two rent checks, netting about $4,000 after expenses.
- Living mortgage-free in my primary residence saved another $3,000 in interest payments compared to someone with no money down.
- Dividends from index funds reinvested themselves, adding over $1,000 in returns.
- Avoiding student loans, car loans, and credit card debt saved at least $1,000 in interest.
- Energy-efficient home improvements saved several hundred dollars more.
All together, my investments earned at least $9,000 over those two months—outpacing the $7,000 I earned from all my hard labor.
This realization struck me: it’s entirely possible to create an “army of dollar bills” that works harder than you ever could.
The Growing Gap Between Effort and Wealth
At this point, my investments are nearly outworking me. Without them, I’d need to work full-time just to maintain my lifestyle. A job loss could spell financial trouble. But as the “army” grows, its earning power will accelerate.
Since I reinvest the majority of the income from my assets, their productivity will double in about 10-15 years. By that point, they’ll be earning more annually than I ever could as a software engineer. The income generated will dwarf my expenses, allowing me to reinvest even more.
If I had continued working and saving aggressively, my portfolio would already be in the millions. By age 65, with consistent reinvestment, that could translate into tens of millions of dollars, generating passive income of $100,000 per month. That’s enough to fund private jets and extravagant lifestyles for generations—a path many wealthy people unfortunately take.
The Power of Small Choices
This isn’t groundbreaking news; it’s the basic principle of capitalism. But what’s remarkable is how quickly the snowball of compounding wealth can form.
I’ve led a relatively normal life. I went to school, got a job, and made similar choices to my peers. The difference? I skipped the flashy car purchases, expensive gadgets, and shopping sprees. I avoided self-imposed commutes and opted for a simpler, more efficient lifestyle.
Now, that “snowball” of cash has grown so large that it feels like it’s chasing me down a hill. All because of a few modest choices made consistently over time.
The Value of Starting Early
If you’re just starting out, don’t be discouraged by the seemingly small size of your savings. That tiny snowball has the potential to grow faster than you realize.
Instead of spending $100 today, consider adding it to your cashball. Over time, it will outpace your ability to earn, pushing you toward financial independence.
A Better Perspective on Money
Lastly, let’s revisit the way we think about money and lifestyle. Every choice you make about what to own—whether it’s a house, a car, or a fancy gadget—comes with a cost. You can either borrow money and pay interest, or use your savings and save on interest. Either way, your money is working for you.
If you choose to own a house outright, it effectively generates a “return” equal to the mortgage interest you would have paid. This is true for everything you own. Your money is either saving you interest or earning it through investments.
The trick is to balance lifestyle expenses with investments. A $50,000 housing cost can work for you if your assets generate $50,000 annually. But if your expenses exceed your assets’ earnings, you’ll struggle to maintain financial stability.
By thinking carefully about money and lifestyle choices, you can set yourself up for long-term success.
Remember: small decisions now can lead to significant rewards later. Whether you’re starting your cashball or already enjoying its momentum, every dollar you invest today works toward securing your future freedom.
Have a productive Monday!