FBC – 127 – Why A big salary doesn’t mean a thing

You probably think that having a big salary protects you from hardship or guarantees you a stress free life. Well you would be surprised. In this podcast we are going to discuss how and why a big salary is in no way shape or form a guarantee of success.

I just came back from Conor and Ellen’s and we've been playing the cash flow board game. So it's a super awesome game and it's a game for investors.

So it's basically it's a game for adults. Right. Where you learn the investment techniques and you understand how pretty much life works in terms of if you're in the rat race, how you get out of the rat race, how do you invest your money and how you keep track of your ledger and all that stuff.

One thing you can learn and this is what I want to talk to you about is that appearances can be misleading. I will give you an example of this. So basically one of the main takeaways that you'll get from this game is your salary doesn't matter. All right. So however much money you make, it doesn't mean that you're safe. And I'm going to explain how and why.

So the cash flow quadrant is basically the four different levels and different conditions of how people earn money and how they live their life. OK, so you basically have the employee level. You have a job. That's what you have. You go to someone's company and they pay you in exchange for your time and stuff. OK.

So a lot of people are in the employee state. And, you know, when people are complaining about corporate wealth, they're complaining about corporate, they're complaining about that state there, which is the employee state. You exchange your time for money. Someone is basically paying you and bossing you around and stuff. Right.

So what a lot of people do is they will try to get a job and open a practice or something. So you become like a doctor, you open your own practice or you're a lawyer or an accountant, some something like that. And so in your mind, you're like a business owner, right? You're like, oh, man, I have this business and all this stuff. It's just me.

But the thing is that you're just self-employed. So basically you own your job. So you own that job. So it's an upgrade from the employee state, you have a higher paid job. That's what you have. Because most of the time what happens is that everything revolves around you.

So you still have to show up every day because, if you're a doctor, people want to see you. They don't want to see the practice. Right. They come to see you. So you have to be there. So it's a job. It's the same thing. Just, you know, you're getting more money.

And then the third state is a business owner. So the business owner is when you have a system that works for you. OK. So me, for example, I have my business and I'm a business owner. I create some systems that just run for me. All right. And while people think that this is the ultimate level, this is what I thought as well.

Why A big salary doesn't mean a thing

But, you do want to get to the stage where you're a business owner and you do like me. You create automated systems or you have people who actually run the system for you. This is when you're like a real business owner, because I mean, the business doesn't need you.

But there is another level. So, you know, in the business you have the system that works for you. But you can become an investor. And when you're an investor, the money works for you. OK. So you inject a little bit of money into something and it comes back with more money. All right. So ideally, what you want is this.

So how can you be both? Well, basically, whatever money your business brings you, you can then invest this money afterwards into something that will generate passive income for you. OK. And this is what you want to do. So you want to be a business owner who invests that money.

So remember, I told you that the profits, you know, after you saved money for taxes, etc. what goes in your pocket? You don't take the 100 percent of what goes in your pocket and spend it right. You’ll take a big chunk of that. And then you reinvest it in the business because you want your business to grow.

Another chunk of that needs to go into some other investments. Right. So these investments, down the road, they will bring you more money it’s not even about the money, but it's going to bring you that peace of mind because it's going to generate passive income.

And then afterwards, you obviously have a percentage that you keep for yourself and you need to live and enjoy the results of your hard work. You know the rewards.

And so Kiyosaki, he created this game because his mission was to be able to teach people how to invest. And if you ask people to go to seminars and stuff, they always find an excuse or something. But whereas if they're playing a game, then they learn by having fun. Right. And the game is super fun. You can buy game on the Amazon for like 100 bucks.

You learn how to invest that money and it helps you get out of the rat race.

About the Author

Martin Ebongue is the founder of martinebongue.com, an online business and lifestyle design blog focused on helping aspiring entrepreneurs build location-independent businesses. Since 2014, he has been creating and scaling online ventures across multiple niches, from digital products and affiliate marketing to SaaS and content platforms, while traveling the world. He shares the real-world strategies, tools, and systems that work, with a particular focus on AI-powered automation for solopreneurs. Follow him on YouTube, X (Twitter), and Instagram.

Frequently Asked Questions

Why does a big salary not equal financial freedom?

A high salary funds a high lifestyle that locks you into the job. Many $200,000 earners have 30 days of savings and zero assets because expenses scaled with income. Freedom is determined by assets that produce income without your time, not by the size of the paycheck.

What should you do with a salary increase to actually build wealth?

Save and invest the full delta for the first 12 months before adjusting lifestyle. If a $20,000 raise goes entirely into an index fund or a side business, it compounds. If it goes into a bigger apartment, it disappears and the next raise creates the same pressure.

How do you start building assets while still working a job?

Block 4 to 6 hours per week for a single side project that could produce income without your time. After 18 to 24 months of consistent effort, most operators have a small asset producing $500 to $5,000 per month, which is the start of optional employment rather than required employment.

What financial board game teaches the difference between salary and assets?

Cashflow by Robert Kiyosaki demonstrates the gap by forcing players to either escape the rat race through assets or stay trapped on salary. Twenty minutes at the board changes how most players think about their next paycheck and their next purchase.

Related Reading

• FBC – 4 Part 1 – This is the story of my life: Success, Failure and The Hurdles.
• FBC – 3 – Escape your life of sacrifice! Don’t settle for less than your dream lifestyle.
• FBC – 8 – The Weirdest Challenge To Boost Your Confidence
• Other really cool tips that will give you an unfair advantage

Further reading

• Martin's story page: the full origin story on Martin's story page.
• LinkedIn Newsletter (Diary of a Virtual CEO): operational tactics covered weekly in the LinkedIn Newsletter (Diary of a Virtual CEO).
• HubSpot Blog: sales and marketing benchmarks on the HubSpot Blog.
• Harvard Business Review: research on solo and founder-led operations from Harvard Business Review.