[2/5] Escaping the Rat Race and being rich

“The trouble with the rat race is that even if you win, you’re still a rat.”- Lily Tomlin

Hello,

Since I was 7 years old, I had a very strange side to my personality…

I just “had” to be an A grader. I just liked going to school and getting 98% on all those tests.

In fact, when in Grade 7 I scored third-highest in class on a test….I cried!

Yes, you read that right.

I bawled my eyes out.

I simply had to be first.

Apparently academics was the only reason why I was alive.

In fact, my passion for it was so high that I was even featured in the national newspaper (Dawn News) in Pakistan because I had topped my A level exams.

So why was I so hung up on acing my exams?

I personally think it was because it happened to be a very addictive sort of validation, especially in a country like Pakistan.

See, Pakistan is a country where the only good thing you can do in your life is either become a Doctor, Engineer or a Lawyer.

Becoming an artist, a photographer or a visionary was crap.

What people don’t realize is that money isn’t everything – your peace of mind is much, much more important. 

You being fulfilled on an emotional and mental level and you having total freedom isinfinitely more important than having a high paying job that you hate.

Anyway, I’m getting ahead of myself. 

What I am trying to say is that I wanted to ace those exams because…

I wanted to get a high-paying job!

Maybe become a director in a multi-national company (because that’s what all “winners” we doing, right?)

Little did I know how clueless I was, till I took admission in the school of hard-knocks (which meant migrating to Canada, applying to 50+ jobs and getting rejected every single time). 

In 2008, after a lot of trial and error, I realized something extremely counter-intuitive but life-changing:

A job, even if it is high-paying, is a definite path to a very average life. 

Yes, I said it. 

But you don’t have to believe me just yet. 

Let me go down memory lane and tell you a very profound story about my parents.

You see, my mom is a Doctor (as well as one of the top Licensed Homeopaths in Canada) and my dad is a Mechanical Engineer.

Here they are in Hamilton, ON attending a wedding in May 2019:

Both of them were pretty good at academics.

My mom has 8 other siblings and all of them are either Doctors, Engineers or Lawyers (one of my uncles is in NASA  and personally designed a satellite which took off into space in 2005. My other uncle was the Dean of California Institute of Technology)

My dad came to Canada on full scholarship (a pretty impossible feat to accomplish in 1970s).

He worked really, really hard to complete his Masters.

In simple words, both sides of my family were successful in the “conventional” way.

Now, coming to think of it, the reason why I loved acing my exams was because I wanted to be like my parents.

Anyway, when I migrated to Canada in 2006, I got admission at York University so I could study Accounting & Finance in order to become a financial analyst.

Why?

Because my friends & relatives told me that this profession was very lucrative.

Entry level positions offered a stellar salary of $70,000, which was a ton of money for me at that time.

Needless to say, I started taking all the necessary courses to land a job in finance.

In the meantime however, I felt something was strangely out of place…

I talked to some of my college seniors who had already graduated and had just landed decent jobs.

I remember asking them, “How is your job treating you?”

The funny part is, they would almost always reply with something to the effect of, “Oh it’s good – it pays the bills you know?”

Others would reply with a curt, “Can’t complain” and change the topic.

It was when a friend of mine got divorced, laid off his 6-figure job AND filed for bankruptcy in 3 short months that it finally hit me in the face…

Nearly all people work not because they love their jobs but because they have to survive. Also, most people are a lot closer to financial ruin than I initially thought.

In other words, they are hopelessly stuck in a vicious cycle called the “Rat Race”. 

For students, it looks a little like this:

For people who are working 9-5, it looks like this:

For 97% of the world’s population, the Rat Race never ends.

Unless you make a deliberate effort to end it. 

And it seems “totally normal” because… the entire world is engaging in it.

Here’s a quick test you can take to see you’re in the Rat Race:

If you have to wake up in the morning to rush off to work where you work for someone else AND you don’t have enough saved up to quit your job, you are in it.

The truth is that people who work full-time do not actually get ahead financially.

They work 5 days a week so they can live a decent lifestyle and so they can save very little for retirement.

Their income is taxed heavily (25-53% in US and Canada)

They have their monthly expenses, mortgages, student and car loans to pay off.

By the end of the month, the numbers just aren’t on their side.

If they are lucky, they might save $100-300 per month and that is a major overstatement.

Here are some statistics to put things into perspective:

Financial Post says that 48% of Canadians live paycheck to paycheck.

And CNBC says that 78% of full-time working Americans live paycheck to paycheck.

The interesting part is the case with US & Canada, which happen to be 2 of the most advanced countries in the world…

Imagine what the situation would be in third-world countries.

(By the way, these numbers even hold true for people making over $200,000 per year, which many people would consider “rich”).

Now you are probably wondering “Why does a job keep people stuck in the Rat Race?”

I am glad you asked.

There are 5 major reasons.

When you are working at a job (irrespective of if you are a janitor or a CEO):  – You are trading your most valuable asset, time (which is absolutely irreplaceable) for money(which is definitely replaceable) and because of that your income is capped, since there are only 24 hours in a day.  – You are making your employer rich at your expense because no one in their right mind would hire you if your efforts aren’t making them a lot more than what they pay you. – You are not using leverage or a system to make money – in fact, you are your employer’s leverage.  – You are taxed at a much higher rate (employees pay much more in taxes vs business owners and investors) – You are working for money.   Simply put, when you work at a job, the odds are stacked against you.

The centuries-old secret is simply this: The rich do not work for money.

They weren’t working for money in the year 1630 and they won’t be working for money in 3040. 

They simply have assets generating passive income for them 24/7 so they don’t have to work.

See, my mom and dad, both extremely successful in their careers, were not able to save a lot of money even after working for 30 long, excruciating years.

However, enough of the rant.

Here is the good news:

Once you understand that becoming financially free is simply the result of making assets work for you, your life will dramatically change.

How confident am I of this?

I guarantee it.

I even have a Mentorship Program which has helped 140+ people get there…

Now you might be thinking: “But Yasir, all of this is good but I don’t have a lot of money so how can I make it work for me?”

The simple answer is:

In 2008 I started my first online business (Quantum SEO Labs) with only $200.

By 2017, that startup effort sprouted into other businesses, investments, properties etc. and it had made me over $2.5 million.

What I am saying is that having a small budget willnot stop you from reaching the goal IF you are willing to learn.

In fact, 91% of millionaires today started from zero.

Kind of like I did.

Let me now unveil the simple but breathtaking secret of creating passive income for life:

This is very important so stop multi-tasking and write it down…

Assume that you currently have $1000 in savings.

If you were like most people, you would spend it on eating out, clothes or buying a fancy car.

However, if you cared even a little about escaping the Rat Race, you would at the very least keep that $1,000 in a savings account where it would pay you 1-3% interest yearly.

A financially savvy person would instead invest in stock of a company which pays out dividends or buy real estate by pooling his investment up with other investors for a much, much higher return.

Let’s only talk about dividend stocks right now since they are the easiest to get into.

As you might already know, buying a stock of a company means becoming a part owner of that company.

Doing so entitles you to profits which the company generates.

Once again, you have $1,000 lying around.

You grab your laptop, go to Google and search up a list of companies in your country which have the longest track records for paying out dividends. 

This is exactly what I did when I had around $124,000 lying around and wanted to create life-long passive income out of it. 

I did 2 hours of research and landed on Enbridge, which is a gigantic (and extremely popular) Utility company in Canada (Electricity, gas, fuels – you know the drill).

This company has been paying 5-7% in yearly dividends for over 27 years.

Yes, 27 years…

Also, these dividends are increased by 8-10% every single year so you get higher payments every year you hold on to the stock.

So I took the plunge and bought Enbridge shares at $38, at a huge bargain because I was able to get my hands on it when other investors were selling the stock.

Why were they selling the stock?

Because “the price was falling” which is the absolute worst reason you can have for selling a stock. 


Enbridge shares are now trading at $49.91 today (May 16 2019).

Here’s a screenshot of my investment in Enbridge:

If you look closely, the stock has increased in price, which means I have a $18,000 profit but I don’t care about that at all. 

What do I actually care about?

I care about the passive income it generates for me (i.e. dividends).

Income I get without working for it.

In other words, free money.

Till date, this stock investment has generated over $11,500 in dividends for me and my family and this income is taxed only 2-5% in US and Canada. 

That said, the dividends Enbridge pays out has been increasing every year for the last 27 years so in 5 years, I will be getting much more in dividends than I am now. 

This is how simple it really is to create passive income which can support your lifestyle and get you out of the Rat Race once and for all.

Let’s recap…

Permanent, life-changing passive income is generated when: 

1. You buy or create an asset which works 24/7 for you

2. You get others to invest their time, money and talents to work for you

Passive income is a fascinating thing, and an absolute superpower once you create it.

Stay tuned – tomorrow I’ll teach you how to use “leverage” to build wealth quickly and in a hands-off manner…

Want me to personally guide you on your life-changing journey to wealth and answer your biggest questions about creating multiple streams of passive income? Join Yasir Khan’s Wealth Mastery Program today…

Thanks, 

Yasir Khan


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