I remember the days when experts predicted we would be working just 14 to 15 hours a week by now and would have so much leisure time we wouldn’t know what to do with ourselves.
Instead, the official work week is still 40 hours and many Australians work considerably longer hours than that in order to finance their increasingly expensive lifestyles.
The predictions…
According to CNNMoney, in 1930 renowned economist John Maynard Keynes predicted technological advancements would mean we would all eventually work just 15 hours a week.
That same year, evolutionary biologist Julian Huxley predicted the two-day work week.
Both men warned that someday, we would have so much leisure time we would be bored out of our minds.
“The human being can consume so much and no more,” Huxley said in 1930. “When we reach the point when the world produces all the goods that it needs in two days, as it inevitably will, we must curtail our production of goods and turn our attention to the great problem of what to do with our new leisure.”
More recently, I remember experts predicting that the advent of computers, the internet and the fast-paced growth of technology would mean we’d be able to telecommute and work from home. They predicted we would be able to work so much more efficiently that we’d have a shorter work week and longer vacations.
The reality…
There is no doubt that technological progress has made us more productive than ever before.
But rather than shortening our working hours, instant messaging, emails on our smartphones and the 24/7 news cycle just seems to have made life more frantic.
Then there’s the fact that our more expensive lifestyle, coupled with inflation and taxes, means that living how we choose to live is costing more and many average Australians are struggling to make financial ends meet.
You’ll never get rich by working longer hours…
However, you’ll never become wealthy working longer hours (or shorter hours as was predicted).
Sure, you’ll earn higher wages, but you’ll be taxed more; inflation will erode some and you’re likely to spend more.
And of course, you can’t save your way to wealth – that’s just too hard.
On the other hand, a group of Australians – strategic investors – have built themselves a substantial asset base of investment properties that act as a “cash machine” to replace their personal exertion income and fund their lifestyles allowing them to work two or three days a week if they choose to.
How did they do this?
Initially they worked hard, spent less than they earned, invested the balance and then kept reinvesting their funds following a proven investment strategy.
There were no short cuts. It took time, often 10 but more like 20 years to allow the magic of leverage, capital growth and compounding to grow their asset base.
But now they have choices in life. Now they can choose to work two or three days a week or not.
As Warren Buffett wisely said: “Wealth is the transfer of money from the impatient to the patient.”
Michael Yardney is a director of Metropole Property Strategists, who create wealth for their clients through independent, unbiased property advice and advocacy. Subscribe to his Property Update blog.
Michael Yardney is a director of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog.
