Personal Finance

3 Feasible Ways to Escape a Soul-Crushing Job, Reclaim Free Time, or Retire Early

Expertise: Real Estate Investing Basics, Personal Development, Business Management, Personal Finance
49 Articles Written

“How much money do you make per year?”

This is the typical question that determines your status and esteem in the working world. The most successful doctors, lawyers, CEOs, quarterbacks, actors, hedge fund managers, and real estate investors are apparently the ones that bring in the highest incomes each year, right?

I’m here on BiggerPockets because, like you, I enjoy filling my pockets and bank accounts with as much money as possible. Earning a lot of money is not a bad thing to me. But I also think financial success needs to be defined a little bit differently than just dollars earned.

Instead of asking how much do you earn, what about asking how efficiently do you earn?  

The first formula is simply this:

Income = Dollars Per Year

The second, more important formula, is this:

Income Efficiency = Dollars Per Year / Time Invested

Time is the key variable here. We are more efficient when we make more dollars and use less of our time.  

Without measuring for time, someone who earns $500,000 per year while working 70 soul-crushing hours per week at an unfulfilling job is more successful than someone who earns $50,000 per year working 20 hours per week and having a fun and completely flexible schedule.

Related: If You Ever Hope to Reach Financial Freedom, Master This Concept

Is it possible that the $50,000 per year person has more freedom, autonomy, and happiness—the very things most people are earning money for in the first place?  

If you’re curious (or skeptical), keep reading.

What Do You Need In Order to Live?

“Dost thou love life? Then do not squander time, for that is the stuff life is made of.” —Benjamin Franklin

The reason I am writing about this topic is because I see a lot of information about increasing our income, but I see very little about how to use that income to live a better life.

Income is needed for survival, for growth, and for some minimal security. But time is needed to actually live.  

What is living for you? For me it includes things like:

  • Long, slow trips
  • Slow time to think, read, and write
  • Slow time playing with and teaching my kids
  • Time and flexibility to do work I love (even if it makes less money)
  • Time and flexibility to do work how I want, at the pace I want
  • The ability to start a nonprofit for an important local cause
  • Time to exercise regularly
  • Time to dust off old hobbies
  • Time to have unhurried, interesting, deep conversations

All of these activities require time. Some of them also require money. Both time and money are important, but the trick is to keep them in proper perspective to one another.

In the rest of this article, I hope to challenge your thinking about defining success (or lack thereof) purely by the amount of income you bring in this year. I also intend to provide some practical tips about how to increase the efficiency of your income so that you can live more fully—whatever that means for you.

financial-independence

A Time for Inefficiency, A Time for Efficiency

Becoming the most efficient income earner is not always realistic. Especially early on, it’s perfectly natural to be inefficient.

When you are learning a new career, like real estate investing for example, you will take much longer to do everything. Thirteen years ago when I first started evaluating properties that I wanted to purchase, I would spend hours figuring out whether each property was a good deal or not.

Today I can take 15 minutes to make the same evaluation, and I do a better job.  

So, greater efficiency is accomplished in part by increasing your knowledge and skills.

Inefficiency might also be perfectly reasonable if you need to stash away a lot of cash. Our bills and our needs for cash don’t always present themselves at the ideal time. So, if you need to save for investing, pay off debt, or get yourself more stable financially, you may need to choose a job that pays more money—even if it requires more personal time and hassle.

But here’s the big point: The inefficiency period should last a finite period of time.

  • At some point, you should be earning more money with the same or less time invested.
  • At some point, those personal debts should be paid off.
  • At some point, those down payments should be saved up.
  • At some point, those investments should be made.
  • At some point, you shouldn’t have to keep selling out by working a schedule you hate in order to earn more and more money.

To me, selling out is giving up my personal freedom and autonomy for something that is not a good fit. I can argue for selling out for a few years—maybe even a decade—but there must be an end game!

If you find that your “at some point” keeps getting pushed back for years and decades, the problem is not with earning more money. The problem is the choices you make with the money you do earn.

Related: Big, Fast-Growing Businesses Are NOT the Ticket to True Financial Freedom: Here’s Why

One of the biggest culprits is the insidious and silent money problem called lifestyle creep. It’s usually the reason high-income-earners get stuck at a job they initially loved and later hate (or at least love a lot less). Despite popular mythology to the contrary, it IS possible to earn a lot of money, work for a limited period of time, save the bulk of it, invest it wisely, and then do whatever you want for the rest of your life.

But you have to choose to value income efficiency more than absolute income in order to break the addiction to a high-paying job or career. This personal choice is the key first step.

3 Paths to More Income Efficiency

Once you decide to work for a finite time and stop selling out for more dollars, there are multiple income-efficient paths to choose from. Ideally, you would work on all of these paths at once, but if you’re just getting started, focus your time and energy on the low-hanging fruit where you can get the most improvement quickly.

The paths I’ll share with you in more detail are:

  1. Maximize your professional value (i.e., turn pro)
  2. Start a business
  3. Maximize savings and investments

Path #1: Maximize Your Professional Value

“No industry is immune and no occupation is safe. All of us need to begin to think in terms of our own inner strengths, our resilience and resourcefulness, our capacity to adapt and to rely upon ourselves and our families.” —Steven Pressfield, Turning Pro

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Whatever your career, your income efficiency will rise when you turn pro. You finally turn pro when you commit to becoming the best you can, day in and day out. The opposite of turning pro is dabbling, hacking, or just playing around at your chosen career.

As Steven Pressfield says in the quote from his awesome little book Turning Pro, no industry is immune and no occupation is safe. If you are not growing today and getting better, you are moving backwards professionally.

The people who make the most money in the least amount of time provide extremely valuable services. Reaching this state of extreme value typically requires years of education, training, and practice. A good example is a specialty surgeon who can charge thousands of dollars for a procedure that may take less than an hour or two.  

Side view of young female surgeon tying her surgical mask

If it takes a brain surgeon 12 years or more of training before he or she can become valuable enough to earn a large amount of money. What makes us think we can shortcut the process in any other field?

We can’t.

Whether we are a real estate flipper, a real estate agent, a janitor, or a plumber, the rules of value are the same:

  1. Learn and grow your skills in a specific, in-demand profession.
  2. Build a following of customers who will pay you for that service (or join an existing business that already has the customers).
  3. Deliver better and better value, day after day, year after year.

It’s true that some professions have a different income ceiling than others, but I wouldn’t necessarily get too hung up on the most popular choices, like doctors and lawyers. The key is to find something you enjoy and are good at so that you can spend an inordinate amount of time getting better.

I have personally met extremely high-earning plumbers and janitors who just became excellent in their trade. Their excellence led them to become so much in demand that they hired others to help, and they built a business around their core service. In this way, earning a lot of money per hour of input is no secret. It’s just not easy, and there are no shortcuts. You must actually put in the work to become better.

So, the first step is to figure out the fundamentals of your chosen job or business and to commit to mastering them. Give yourself the equivalent of a doctorate degree in the expertise and skills of your field. Find customers who need what you can deliver. Then, deliver consistently.

I am confident that if you do this, you will find that your income efficiency will begin to skyrocket.

Path #2: Start a Business

Not everyone needs to take the path of starting a business. It is possible to maximize path #1, skip to path #3, and then get out of the rat race altogether. A great example of someone who took that route is the blogger over at MrMoneyMustache.com.

But if you want to maximize your earnings, leverage systems and other people, while also maintaining some control over your time and flexibility along the way, starting a business is a great choice.  

You can make your business full-time or part-time. You can also grow it to eventually run without you, or more commonly, you can simply use it as a tool to extract a lot of income very efficiently until you ultimately sell it or just shut it down.

Working for someone else can become intolerable for a number of reasons. Sometimes you don’t align with the mission or the values of the organization. Sometimes there are strong personality conflicts. Other times an organization may impose artificial ceilings on your ability to produce income or to do it efficiently.  

Owning a small business as a full-time real estate entrepreneur has been my choice ever since I graduated from college 13 years ago.  I wouldn’t have it any other way. Small business was also the path of the high-earning plumber and janitor I told you about in the last section.

In actuality, most of us know something about business. Except for those of us who work for a government agency, we all work for a business of some kind.  

The only question is: who owns the business? Is it you? Or is it someone else? I like the first choice.

The easiest time to start a business is after you’ve already built a strong ability to add value using in-demand skill sets (see path #1 above). To build these skill sets, it makes a lot of sense to grow and learn while working under someone else who is a lot better than you. But once you possess the valuable skills, you can then choose to go on your own by creating systems and a team of people around you (i.e., a business).

The real estate skills my partner and I have built our business around are the ability to market, to negotiate, to use creative financing structures, to evaluate real estate values, and to focus under pressure. If you’re looking for an example of a business blueprint, read my article “The Ultimate Guide to Adding Systems & Outsourcing to Work Less in Real Estate.” In it, I share a detailed outline for a real estate management business.  

When you get started, it also helps to do a lot of brainstorming, and in my case, make a mind map. If you are serious about starting a full- or part-time business, I also recommend you read the following excellent books about entrepreneurship:

Path #3: Maximize Saving and Investing

Paths #1 and #2 explained how to maximize the amount of income you produce per time invested. This is a good start.  

But remember my challenge at the beginning of this article?

The ultimate goal is to hustle and work hard for a finite period of time. At some point, maximum income efficiency means you don’t have to work at all. This happens when your income is produced primarily by investment assets and not by your time or efforts. This does not mean you don’t work at managing your investments. You always will.  

Related: Of These 4 Financial Paths, You Can Only Choose One. Does Yours Lead to Financial Freedom?

But managing a portfolio of stocks, bonds, income properties, or notes is MUCH different in terms of time investment compared with a traditional job or business. This stage is truly the pinnacle of income efficiency, because you can do whatever you want with your time.

The path to this stage of maximum income efficiency is once again fairly simple but not easy. It comes down to a few basic steps, which I personally focus on and measure as yearly goals:

  1. Maximize earnings (see paths #1 and #2)
  2. Minimize expenses
  3. Invest for maximum safety and yield
  4. Compound earnings for exponential growth

Articles and books are written about each of these simple steps. You certainly need to acquire knowledge and skills in each of these areas.

But I would offer that the crux of your success in quickly moving down this path to maximum income efficiency comes down to self-discipline.  

The key measurement of success is your savings gap, or the difference between the income that comes in and expenses that go out. The bigger your savings gap, the faster you accumulate enough equity to get out of the rat race. It’s as simple as that.

For the math nerds in the room like me, check out “The Shockingly Simple Math Behind Early Retirement.”

Real estate investment is an excellent vehicle to quickly and safely carry you down path #3. It is the vehicle where I spent 99 percent of my time, money, and effort. But other vehicles, such as investing in the stock market, are also legitimate paths.

Whichever vehicle you choose, focus on the personal discipline of saving your money, and then invest it conservatively so that you don’t lose it. Those are the most important steps.

Making a Dying? Don’t Sell Out For Life

The topic of this article has been about avoiding selling out long-term with a job or a work schedule we hate. I know those are strong, challenging words, but the frustration and anxiety I see in the faces of my working friends and colleagues tell me it’s a real problem.

In reality, we all sell out to some extent just by becoming adults. We have responsibilities. Life happens. We juggle different priorities. Time gets away from us.

But the trajectory of our working career is too important to leave to chance. Work takes up most of the time in our adult lives. The question we must ask is, are we working to make a living or to “make a dying”?

Let’s all choose to live. Let’s rekindle our energy and our motivation so that we stay focused, create a plan, and move forward financially in a productive way.

I wish you the best on your journey!

I’d love to hear your thoughts about income efficiency and the three paths outlined above.

Please leave your comments or questions below.

Chad Carson is an entrepreneur, writer, and teacher who used real estate investing to reach financial independence before the age of 37. He wrote an Amazon bestselling book
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    Michael Trizzino from Long Island, New York
    Replied over 4 years ago
    Nice to see MMM plugged on BP, been reading his stuff for a few years. Thanks for this article, Chad, you’ve got a great perspective on time and the efficient use of it.
    Chad Carson Investor from Clemson, SC
    Replied over 4 years ago
    Thanks Michael! Yeah, MMM spreads some good ideas over on his blog. I like to share it when I can.
    Elizabeth Grahsl Lender from Dallas, Texas
    Replied over 4 years ago
    Love this article and totally agree. I wrote a post about how wealth is actually defined by time, not money, which can be found here if you want to check it out (it’s currently the homepage). http://www.worldofwealthblog.com/ I started buying property 10 years ago this year when I graduated from college, and now have 10 rental units. It’s amazing to look back and see how naive I was when selecting and managing those first properties. Yes, I learned a lot of lessons the hard way, and in hindsight I know I could have made SO much more money. But had I not started investing I wouldn’t have learned them at all! Now I’ve been working for a decade in my professional career but find my motivation and engagement waning. I’ve been planning to hang in there a few more years and super save until I can early retire, but this article has me thinking I could just make the switch to self-employment in something I like better instead of continuing in a career track until I can quit working entirely. It’s hard to pull the plug once you’ve worked to build a career and a network and are finally making good money though. I shared this post on my FB page and will check out your site. Thanks for the morning inspiration!
    Chris Makrinos from Bethel Park, PA
    Replied over 4 years ago
    I really enjoyed this article, thank you! 1. Your Income Efficiency formula is insightful. I spend two hours per day on the trolley travelling to work and it kills my flexibility and efficiency. While I maximize this time by reading, I still lose the ability to manage more important priorities, if needed. 2. The ultimate concept of retirement is being able to do what you want, when you want. So I agree, choosing something you love to do for work gets you 90% of the way there. We are not guaranteed a future, so doing something you hate for 10 years in order to retire is an interesting problem. 3. I think in general, people underestimate the importance of their health. I want to make sure that when retirement comes, I can do what I want to do. I will not compromise sleep, poor food choices, or extreme amounts of stress in order to make a few extra dollars. In my mind, it doesn’t seem like a good long-term trade-off.
    Hong Sellmann
    Replied about 4 years ago
    Hi Carson Dose this practice only in USA market?
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Hi Hong, I think these basic principles apply anywhere. The specifics in each location will of course vary some.
    Bassidiki Diarra from Philadelphia, Pennsylvania
    Replied over 3 years ago
    Outstanding article Chad!
    Matt Dunn Renter from New Orleans, Louisiana
    Replied over 3 years ago
    Thanks for the great post Chad! Been working a sad job since college, just started Ubering on the side and putting all proceeds to a down payment fund for a duplex-fourplex. Time to get some freedom back!
    Chad Carson Investor from Clemson, SC
    Replied 9 months ago
    I love it! Go get it Matt!
    John Murray from Portland, Oregon
    Replied over 2 years ago
    My journey into wealth started when I was about 6 years old. I did not like school although I graduated high school with a 4.0 and National Honor Society. Got a full ride to a Big East school, turned it down and went in the military to learn more about the world. I always had the doctrine of constant learning of the big picture, never did I ever concentrate on the small trivial human drama. My military training served me well, and upon ETS entered an apprenticeship. I never limited my learning to one trade. Most people have a narrow band of skill sets. I used my mind and hands to develop skills to generate capital. Raised a family and continued on becoming a multimillionaire. If I have to offer any advise to an aspiring entrepreneur, graduate high school, serve your country, never narrow your skills, continue to learn, stay married and most of all become the person that people will say “I never thought you could do that”. I’m going to take a load of scrap steel for recycle, bet you don’t think a multimillionaires do stuff like that. Yup we do!
    Robert Biggerstaff Contractor from Pensacola, FL
    Replied 9 months ago
    Thank you so much very well done!
    Chad Carson Investor from Clemson, SC
    Replied 9 months ago
    thanks for reading, Robert!