by Niall Doherty

In The Education of Millionaires, author Michael Ellsberg lays out four steps to aligning your money and your meaning. That is, getting to a place where you’re doing work you love and getting well paid for it.

The four steps…

1. Get on your feet financially

This means doing whatever it takes to get a steady stream of income, so you don’t have to worry about feeding yourself and paying the bills. Sell your crap, move back in with your parents, work a shitty job (or two), whatever it takes. We’d all like to go from zero to hero overnight, but reality usually dictates that hard work and sacrifice are required along the way.

For me, getting on my feet financially meant giving up chasing passive income and focusing on freelance web design for a while. That kind of work didn’t exactly fit the lifestyle design dream I had when I quit my 9-to-5 a year earlier, but I was able to pull in about $2k a month pretty steadily and finally stop draining my savings. I’m pretty confident I could have built it to a $5k-a-month business if I’d kept at it.

2. Create more room for experimentation

Once you have food in your belly and the debt collectors off your back, the next step is to free up some time so you can experiment and see what kind of work you find fulfilling. How do you free up that time? Maybe you can negotiate a remote work agreement with your employer and save yourself the daily commute. Or you could work long hours for six months and build up a nice savings cushion so you can afford not to work for a while.

I caught a break here, stumbling into a nice passive income stream that has allowed me to spend much of the past few months learning and experimenting. However, even when I was running my web design business full-time I was on the road to freeing up my time by building time assets (explained in more detail below).

3. Begin experimenting

Maybe you already know what kind of work you find fulfilling. In which case your new-found free time can be spent figuring out how to make good money doing that work. If you have no clue, then fill up that time trying as many different things as you can. Meet more people, read more books, attend more events, travel to new places, put yourself in unusual situations.

I’ve personally been experimenting with a lot of business stuff these past few months. I’ve learned a ton about outsourcing and automation, started an SEO writing business, and I’m currently practicing idea extraction and looking to build a software business with a friend. Because I have a pretty steady income stream flowing while I’m doing all this, I can take a few risks and endure a few failures, no big deal.

4. Strike out on your own

This step is for anyone who may still be holding down an unfulfilling 9-to-5 for financial reasons. Assuming you’ve pulled off steps two and three successfully, you should now be in a pretty good position to start working for yourself full-time. Ideally you’ll have set up a side-business and seen some encouraging real-world results before taking the leap.

Building time assets

Let’s jump back up to step two, which was all about creating more time for experimentation. I came across a great way to do this via Patrick McKenzie’s blog. I’d known about the concept for years, but never had a name for it. Here’s how McKenzie describes time assets and time debt.

Most people think, intuitively, time always rots.  You get 24 hours today. Use them or lose them. The foundation of most time management advice is about squeezing more and more out of your allotted 24 hours, which has sharply diminishing returns. Other self-help books exhort you to spend more and more of your 24 hours on the business, which has severely negative effects on the rest of your life (trust the Japanese salaryman!)

Instead of doing either of these, build time assets: things which will save you time in the future. Code that actually does something useful is a very simple time asset for programmers to understand: you write it once today, then you can execute it tomorrow and every other day, saving you the effort of doing manually whatever it was the code does. Code is far from the only time asset, though: systems and processes for doing your work more efficiently, marketing which scales disproportionate to your time, documentation which answers customers’ questions before they ask you, all of these things are assets.

The inverse of time assets is time debt. Most programmers are familiar with technical debt, where poor technical decisions made earlier cause an eventual reckoning where forward progress on the program becomes impossible until the code is rearchitectured. Technical debt is one programmer-specific form of time debt. Basically, time debt is anything that you do which will commit you to doing unavoidable work in the future.

Last year I wrote some documentation for common tasks in my $50 Blogs business. I wrote out the step-by-step process for setting up a blog for a customer, and separate documentation for hooking up an Aweber mailing list to their blog. Once I had those docs created, it was just a matter of ripping through the steps whenever an order came through, instead of trying to remember everything that needed to be done. Later I brought a partner into the business and he was able to do much of the work right off the bat by following that same documentation.

A recent example of time debt would be the process I had for tracking my spending and putting together my monthly finance report. I was using the Notes app on my iPhone to record my expenses, then entering them into a Google spreadsheet at the end of each day, then totaling everything up at the end of the month to produce my report. On average, it probably took me 2.5 hours each month to put together that report, much of that time wasted because of an obviously inefficient process. So I’ve been experimenting lately with a couple of tracking apps that should improve the process. It’s a little bit of extra time (and money for the apps) invested up front to figure out a better way of doing things, but once I have a handle on it I’ll have significantly reduced the debt.

Time assets you can build

Thinking in terms of time assets vs. time debts is a good habit to get into. Always be considering where you can invest a little time up front to save yourself a lot of time in the long run. Here are a few suggestions:

  1. Learn touch typing. I did this last year (using this free software) and it literally saves me hours each week nowadays.
  2. Learn shortcut keys for the computer applications you use most.
  3. If you have a business, write documentation for common processes. (By doing this you’re also likely to think of many ways the process can be improved.)
  4. Automate your finances.
  5. If you have a blog/website and people often email you with the same questions, post the answers to those questions online so they can be found easily. (This is exactly why I wrote Your Parents Vs. Your Dreams.)

I’m guessing you’ve already got some quality time assets built up for yourself. Which of them saves you the most time? Would love if you could share in the comments.

P.S. If you’re interested in self-employment and/or entrepreneurship, I highly recommend you check out Ellsberg’s The Education of Millionaires. I’ve gotten ridiculous value out of it already. Also, if you’re a freelancer looking to raise your rates, check out Breaking the Time Barrier from FreshBooks. It’s free, and you’ll wish you’d read it years ago.


Sign up to get access to all my finance reports since 2011