The Salesman, The CEO and The Entrepreneur: How We All Get to Retirement

What follows is a look at Financial Independence, the correlation between time and money, and the common rites of passage that transcend many types of careers.

“What does he even do…?”

I’ve heard that question asked so many times in my career about CEOs, Presidents and other corporate leaders. It was so common that some time ago I started equating it with success subconsciously.  

The implicit second half of that question is “…to justify his position here”. Like a badge of honor, it was only asked about men and women that achieved a certain level, or stage, or income. I’d always shrug the question off with a response like, “apparently something valuable” or “enough, I guess” without really dwelling on it. I figured they had earned it, and who was I to question that?

Until one day I heard it asked about me.

That was an interesting feeling—I went through a wave of emotions:  

? From confusion (“how do you not know what I do!?”) 

? To anger (“boy, I do things you don’t even know need to be done!”)

? To self-conviction (“I’m clearly not doing enough to communicate my accomplishments down the chain”)

? I finally landed on healthy curiosity: “What does this situation say about me, and my organization, and about business in general?”

What I realized—or what I had always understood but never thought or bothered to articulate—was that I never really equated “doing” to “earning” the same way others around me do. Maybe it was reading Rich Dad Poor Dad at such a young age, or studying economics and finance in college, or something else entirely, but I always thought the goal was to work hard so that you could eventually separate what you “do” with what you “earn”. My mindset was to hustle and sacrifice while I was young so that I could relax when I got older. Isn’t that what retirement is? Isn’t that the goal of every employee: eventually do nothing; still get paid?

In fact, outside of the corporate construct, there exists a subculture obsessed with achieving retirement earlier than is traditionally possible.

By now, you’ve no doubt heard about the latest finance and lifestyle trend sweeping the country. If you ask me, “Financial Independence” as a concept is probably here to stay. While the idea of growing a business and then retiring is certainly nothing new, the methods, timeline, and culture surrounding Financial Independence have markedly evolved over time. The rise of Financial Blogging has played an integral part in this movement, both as a momentum shifter and as a self-fulfilling prophecy. In short: most financial bloggers blog about blogging. They take pride in achieving Financial Independence by advising others on how to achieve Financial Independence.  

I’m not going to dive too deep into the meaning of Financial Independence (FI) in this article, because I think there are plenty of resources out there that will do a better job of that. Tim Ferriss’ best-seller 4 Hour Work Week and (of course) the corresponding blog are a great example. My buddy in San Diego, Pat Flynn, has turned his blog SPI into over $2M in annual net profit. He is happy to share how and why to anyone that wants to follow him (it’s actually a great story, and he is a good dude). He’s done this since 2008. A newer name has joined the mix, under some cover of anonymity as “the girl who retired at 28 with over $2.25M”. You can read her story and blog over at The Money Habit.  

For quick reference, CNN Money defines FI as when your “income from your investments alone is enough to cover all your expenses.” Simple enough. 

But that just sounds the same as regular retirement…right? Yeah, but what is “regular” retirement today really mean anymore? My father is 60, has been a high-performing member of Corporate America for decades, and he’ll be at least 70 before he’s able to retire after raising 7 kids (thanks Dad!). If you’re under 50, do you really think Social Security will provide enough money for you to live on when you get there? If you’re under 40, what is the likelihood you’ll even have a pension to supplement your lifestyle? If you’re being realistic about your financial future, it’s likely that by now the FIRE concept, Financially Independent and Retiring Early, has at least caught your attention.

But I’m not here to sell you on the concept; I’m here to show you that you are already familiar with the steps of attaining FI by pointing out something about your career you may not have noticed. 

You are already working through the stages of gaining Financial Independence if you have a typical corporate career.  

You see, MY definition of Financial Independence is the same as my definition for workplace success: Reducing the correlation between the amount of money you earn and the amount of time you spend earning until it is (or is approaching) zero. I’m going to take you through my interpretation of the stages of achieving both FI and workplace success, and I believe you’ll see the substantial overlap.  

Stage 1: Getting Paid for the Time You Are Present

When you’re starting out in the workplace, the time clock is your revenue stream. Many people enter the job market as an hourly employee, often unskilled, just to make a little cash and gain valuable experience. In this level, it’s typically ONLY about the time you are there; you are not paid in correlation to what you actually accomplish. For you, the hourly employee, it’s a little bit ‘about the money’ but much more about gaining workplace experience to increase your value and capabilities in the next stages. For your employer, they are getting cheap labor to fulfill basic functions. The time/money ratio is very high, and the correlation between the two is 1:1.  

In the outside world, when you are working on building your own business or working towards FI, your time/money ratio is nearing “#DIV/0%” status and the correlation between the two is still very high—you have to put in lots of time to get a little bit of money. You’re building something, and it takes effort, but often the results aren’t showing up yet. Just like the hourly employee, you’re laying a foundation for future success and creating the habits and work ethic that will get you through the next stages successfully.

Stage 2: Getting Paid for the Work You Do 

Unlike my favorite old time Nintendo games, there is a huge jump between Stage 1 and Stage 2 for a career employee, and frankly, some people never make into this next realm. This could mean a step up from hourly to salary, and the acknowledgement that you are getting paid because you have a real skill that adds value to the enterprise. No longer is your boss primarily concerned about the amount of hours you put in, but rather with the quality and amount of work you are turning in. There is a slight weakening of the correlation between time and money, but it is not completely eroded.

For those outside the Rat Race, the jump is less severe, and sometimes even happens in parallel. Maybe you’re still in the building mode, but slowly, sometimes seemingly inconsequentially, people start to notice. Now you have something to offer. It’s still quite an effort to produce a result, but those results start making you a little money. This gives you the confidence (and maybe even capital) to get to the next stage. The time/money ratio and correlation weaken just a bit.

Stage 3: Getting Paid for What You Produce

This is the world in which most people in my industry currently reside. It’s the world in which most salespeople across industries operate. No base salary. No safety net. No time cards. If you want a raise, sell more. Recruit more. Produce more.  

Some people hate it, and could never take the risk of working in a sales role. Others thrive under the pressure, and couldn’t imagine accepting a role where a base salary and discretionary bonuses cap their income. Like it or not, this is evolution, baby. Even working for a large company, you can now really deteriorate the correlation between time and money by being better at selling more in less time. It’s no longer directly about the time you spend, or how much work you’re doing; it’s about the results. Sure, more time and more work could help you produce more, but now you have the opportunity to move beyond relying on those two factors alone.

Of course, it’s not just sales people that get here. You reach a point in the corporate management structure where your compensation depends on the work of your team—whether or not you “do” anything directly or elicit the results from your underlings doesn’t matter. Just hit those Balanced Scorecard targets and enjoy those bonuses.

For those going an alternate route, building their own retirement vessel, this is where the proverbial rubber meets the road. You’ve built it, and they came. You put in the work, you’ve sacrificed, you’ve fought through the initial sales and fulfillment challenges, and you’ve introduced some of the FI secret sauce—automation—into your routine. Again, just like the employees above, it’s no longer directly about the time you spend, or how much work you’re doing; it’s about the results.  

Stage 4: Getting Paid for What and Who You Know

In my career, I’m working hard to move fully into this stage from the previous. Honestly, one thing I should mention here is that these stages don’t have stopper valves installed between them…life, or the economy, or bad luck can send you backwards in a hurry and without much warning. I’m always careful to remember that I haven’t “achieved” anything in my career. Instead, I am seeking to stay in the process of achieving. It aint’ over til it’s over, and sometimes not even then. I can’t say this enough: Stay Humble, Hungry and Smart.

Back to the point, if you get here, you’ve seen some things. You’ve met some people. Your value is in your experience and your network. Your organization, whether you built it yourself or are tasked by someone else to run something they’ve built, is relying on you to know what resources are needed. You are the one who knows where to get them, and how to do so in a way that benefits everyone involved to ensure growth and sustainability. It’s not about time, it’s not about what you do. Instead, it’s about your ability to put the right people in the right situations to succeed. It’s their success you’re getting paid for, and you’ve now pushed yourself farther from the ground floor where you used to mire in that high time/money abyss.  

Game Over: Getting Paid for What You Have Built

Welcome. You’ve made it. You did it! You saw opportunities, capitalized on them, and had a little luck along the way. Sure there were setbacks, but you didn’t let those stop you, you just let them guide you.

I don’t really need to explain what this means, do I? This is it! This is Financial Independence! You’ve accumulated enough assets, been fortunate enough to earn a Pension, or built a business that you can now profit from without continuing to involve yourself in ANY day-to-day operations.  

At this point, you’ll notice that it doesn’t matter how you got here, the result is the same. If you went the career route instead of avoiding the Rat Race, it may have taken you longer. But hey, retirement is retirement. You’ve completely eliminated any correlation between the time you need to work and the money you need to live on. If you choose to keep working in a limited fashion, that ratio of time/money is microscopic—little time/lots of money.  

The terrain that we all pass through on this journey looks very different, but these main checkpoints seem to have the same look and feel across most types of careers. Have you noticed that in yours? What stage are you in? Do you have a goal other than retirement—maybe philanthropy? 

I’d love to hear the answers to these questions and whatever thoughts you have in the comments.