Living The Dot Com Lifestyle – Rule 2

This is part two of my Living The Dot Com lifestyle series. It’s based on a presentation I gave at Third Tuesday Vancouver call how to run a million dollar business on two hours per day. To read part 1 of this series, go here.

Rule 2 – Never Trade Hours For Dollars

Most people make money by trading hours for dollars. There are many ways to trade hours for dollar. The most common is call a job. You go to work for a set amount of time in exchange for money. Or you’re a professional, like a doctor, lawyer or social media consultant and bill your clients for the number of hours you spend working for them. Either way, you are trade your time for money.

If all you want is to have money, there is nothing wrong with trading hours for dollar. However, if your goal is to live the Dot Com Lifestyle and have both time and money, then trading hours for dollars isn’t going to work. As a matter of fact, trading hours for the dollar is quite possibly the worst method of earning a living one can make.

You Are Taxed The Most

If you trade hours for dollars, congratulation! You are the government’s biggest income source. And there is no way for you to escape it because the company you trade hours for dollars with will withhold the tax money from your paycheck. And speaking of taxes, you are number one! The more you make, the more the taxman takes – up to 50% of every dollar. Of the three entities that are subject to income tax (individuals, corporations and trust), no other entity is taxed as highly as an individual trading hours for dollars. Give yourself a pat on the back for being the government’s biggest money train.

You Have The Fewest Tax Breaks

Not only are you taxed the most but you have the fewest tax breaks available. While a company can write off pretty much anything that is used in the course of their business, you have to use after tax dollars to get to work, eat your lunch, buy cloths, fill the gas tank, etc. About the only real tax break available to people who trade hours for dollars is the RRSP (IRA or 401K in the US). And the most amazing thing is, most people who trade hours for dollars don’t take advantage it!

You Only Earn Dollars When You’re Trading

Trading hours for dollar creates no residual or passive income – if you’re not trading, you’re not making any money. It’s a tough balancing act. You want to earn a living but you also want to spend time with family and friends. It’s give and take. When you trade hours for dollars, you can’t have both. If you want more time with family, you have to trade less. If you want to make more money, you have to keep trading. But then you run into the next problem.

There Are Only 24 Hours In A Day

It doesn’t matter how many dollars you trade your hours for, you are limited to 24 hours just like everyone else. And it’s really hard to trade hours for dollars 24 hours a day. That puts a cap on your income. Even if you’re a high power lawyer that bills out at $500 an hour you still have a cap. And while you’re making good money, you’re still trading hours for dollar. The instant you stop trading, the money stops.

Eventually a time will come when you can no longer trade hours for dollars. This will happen either by you becoming sick, in accident or are forced to retired. What happens then depends on the decisions you made earlier in life. If you planned well, you’ll have enough to live on without trading hours for dollars. However, statistics shows that the majority doesn’t plan well and will be force to take some kind of social handout – either by the government or family.

You Want Time & Money, You Don’t Want To Trade Time for Money

Now, I am not advising anyone who currently trading hours for dollars to quit their jobs. That would be stupid. However, I do want you to keep in mind that if your goal is to have both time and money to live the Dot Com Lifestyle, then a job is the wrong way to go about it. You want time and money. You don’t want to trade time for money.

To be continued.


43 thoughts on “Living The Dot Com Lifestyle – Rule 2”

  1. Good tips… just read part 1 too. Time is money!

    Chris Jacobson’s last blog post: Sunday Chatter – 5/24

    1. That is hard to understand though. In my mind every buck needs time to earn. Unless you can live on the interest of your bank account you will have to trade time for money.

      Ideas of making money on stock trading

      StockTradersBlog’s last blog post: Questions About Option Trading

      1. But your time doesn’t have to have a set value.

        The idea is that you may start working for 2 hours per day and earn $50. As time goes on you keep working that 2 hours per day but start earning $200. Then, if you take a couple of days off of work you’re still earning the revenue.

        Money can only be earned via the expenditure of your time, but the amount of money you earn doesn’t have to correlate to the time worked.

        David Turnbull’s last blog post: 11 tips for modern day mastermind groups

      2. Aansa says:

        Time is priceless. You can charge as much as people think that your time is worth not per hour but for the complete service.

        Aansa’s last blog post: Handymen Squad – Ottawa

        1. rana says:

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          my no is 07503536252

  2. Momekh says:

    Well said …
    But I have had a point of objection on one thing though … it really should not be called the Dot Com Lifestyle 🙂 … I mean, this “time AND money” objective can as easily (or not-easily) be achieved in the Offline mode of business as in the Online one , what say you?

    Momekh’s last blog post: Real Life vs. Text Books

  3. John, you said that to have a dot com life, a job isnt the way to go…what do you call your position of employment?

    [email protected] last blog post: Freebie Monday #25 – Free Coffee (USA) and Codes for SwagBucks!

    1. Michael Kwan says:

      John has a hobby that happens to pay the bills.

      Michael Kwan’s last blog post: Public Holidays and Working at Home

      1. David says:

        I wish I had a hobby that paid the bills too!!! haha… maybe one day! or at least.. I like to dream about it…lol

        David’s last blog post: Housing Market in Vancouver

    2. John Chow says:

      What employment? I’m unemployable! LOL It will start to make more sense in part 3.

      1. Liane says:

        LOL. unemployable sounds good to my ears.

        Liane’s last blog post: What is a Giveaway Event and How to Take Advantage Through Two Ways of Participating

        1. MLDina says:

          Aside from MarketLeverage Promotional Director, I would say John is an entrepreneur…maybe a blogtrepreneur?

  4. Cam Birch says:

    I agree. I am currently working towards that end in my business. It can be rather difficult to change your business processes to enable it but I believe my investment will be worth it in the end.

    Cam Birch’s last blog post: Where Does Money Come From?

  5. Wow, really good post John. One of the worst things for consumers when they’re stuck paying money for a set amount of time is that they don’t actually know how much service they’re going to get. Are you going to get what you want in that amount of time? Or, is the person selling you the product going to try and procrastinate to get you to “buy more hours”.

    @Amen – The difference between John and everyone else is that it seems like he does this more as a hobby that brings in money rather than him working just for the sake of making money…. I must say though, that it is quite the hobby.

    It’s important to not forget that we need people like Lawyers and Doctors. Without them our world wouldn’t be where it is today.
    Again, Great Post John

    bradleybradwell’s last blog post: Get More Exposure Online By Creating a Podcast

  6. Jackie Chia says:

    Absalutly right.

    Jackie Chia’s last blog post: How Do You Make the Most out of Networking

  7. Brian says:

    I definitely agree with you. Nothing frustrates me more than having to go to work everyday and that being my major source of income. I am taking steps towards generating more passive income, such as dividend income and income from other investments. I hope I can make strides to become even a tenth as successful as you are.

    Brian’s last blog post: Terminator Salvation

    1. Liane says:

      It just amazes me how blogging is so fun yet rewarding (both personally and financially).

      Liane’s last blog post: What is a Giveaway Event and How to Take Advantage Through Two Ways of Participating

  8. That´s true, whats the good on having money and no time at all to spend it. It would be like living in Golden Jail.

    Time it is the most valuable asset we have. I will not trade it for simple dollars.

    Marketing Business Review’s last blog post: How To Do A Niche Research In 4 Quick Steps

  9. James says:

    John,
    Great post and so true! Most of us (to include myself) just work more hours on contracts or jobs that will provide more money at the time, but give us no passive income when we’re not working! Definitely a good read to help realize what the heck we all work for!
    Cheers,
    James

    James’s last blog post: My Top 3 Favorite Freelance Writing Gigs

  10. Excellent one John once again you have proved that time is money and day has 24 hours for sure. I am wondering when i would be able to live this kind of life style, if you can give me few personal TIPS would be great Sir.

    Ricky Peterson’s last blog post: Methods to show Online Acts of Kindness

  11. Liane says:

    Good one john. You’re just making people realize more and more how job sucks. Let’s blog!

    Liane’s last blog post: What is a Giveaway Event and How to Take Advantage Through Two Ways of Participating

  12. Yep, job sucks indeed 🙂

  13. Norm says:

    I totally agree, but you must earn money first and invest into things that make money. Whether you working on your own business or working for someone you are still trading time for money.

    Norm’s last blog post: The Secret to Making Money Online

  14. Aansa says:

    It is somewhat true that charging by hours is not a good option. Mostly charging for complete service is what people also prefer. However, there are still people who would like to pay by hours, so should one not take their job?

  15. Dean Saliba says:

    Totally agree. I am proud of the fact that I do not spend a single penny on my blog, all the money I get is 100% profit. 🙂

  16. Asswass says:

    The 24 hours a day is soooo true. There’s nothing worse than having a limit of earnings, knowing that you would never earn more than a limited amount.

    Asswass’s last blog post: Using Avatars to Brand your Company, Blog or Yourself

  17. Pheak Tol says:

    I wish i didnt have to trade my time for money – each day i go to hell, oops i mean work, and it just bores me out of my mind with the frustration and set time that i have to meet with deadlines that cant be meet realistically..

    but while im at hell, there i go again – really meant to say work, i usually work on the projects i would do at home – so i guess you can say im doing both?

  18. Very interested in hearing the rest of this story. I’ve been trading my time for money for too long. Building a website is trading time for money too, right?

  19. Marita says:

    John’s right. These principles can be applied by just about anyone in any industry. An excellent book on this topic is

    Rich Dad Poor Dad by Robert T. Kiyosaki.

    Marita’s last blog post: Target Facebook Bullseye Campaign

  20. Danny Croft says:

    Im currently trading time for money but i hate it, i carnt wait to make a decent living online, since im only 19 well 20 next month i think i have plenty of time left in my life to quit work and hope to make it to the dot com life style

    Danny Croft’s last blog post: ShoemoneyX

  21. Tran Harry says:

    Great message John but aren’t there two things that need to be considered, you get taxed no matter what. Sure if you’re a business than you can deduct more but you can’t be saying you have found a way to completely avoid paying taxes on income. And second even if you start a business and it grew to a reasonable revenue stream most businesses don’t become that way overnight so while someone is toiling away 40hrs at an office and making $40,000 a year or a business owner puts in 100hr weeks making zilch for the next 5 years before the business is sustainable or the drug dealer who makes $150,000 a year but with the potential to serve life in jail time is always traded for money.

    1. Dan Mihaliak says:

      I see it this way if you could charge $100 an hour for your services then the most you could make per day would be $2400. (24hrs X $100) But if you had two websites and each made $100 per hour in sales the most you could make would be $4800 per day.(24hrs X $100 X 2 websites). Keep adding more websites to the formula and see how trading your time for money is making you poor.

      1. Tran Harry says:

        That may be true, but there are definitely variables that aren’t taken into account by your analysis.

        For one, there isn’t a 100% positive correlation that your second website will do as well as your first one would, so it may not be a dollar for dollar match in gains, this is good none the less because it still means you’re gaining more money than if you only had one, until you take into account the second part, the more stretched you become in your dealings than the more likely you will jeopardize your initial websites earnings thus reducing that hourly earning in order to compensate the time necessary to make money with the second website.

        I mean yeah I understand why its possible with John’s own empire of websites, but its not as easy as breaking the time = money barrier just yet.

        By adding more websites you dedicate more time towards them not less, even self run websites will require maintenance and upkeep unless you want it to idle away and fail in this era of constant change.

        Let’s see part 3.

        Tran Harry’s last blog post: Daily News Feed May 27, 2009

  22. Dan Mihaliak says:

    Hi John
    I’ve been reading your comments and I’m not sure your readers get it. By working the Dot Com Lifestyle you can build a website and sell a product and even while you are sleeping or on vacation people worldwide can buy your product. Thus you are not tied down to only 24 hours a day. If you can develop multiple products on other websites you are now making more money than if you were trading time for money. That I believe is the great thing about the Dot Com Lifestyle.

    Dan Mihaliak’s last blog post: Living the Dot Com Lifestyle With John Chow

  23. This is awesome, awesome advice john. More and more people need to break out of the employee mindset and become system builders.

    Thanks!

  24. Sometimes I wish there were more hours in a day. I could get a lot more done.

    TYCP Entertainment Magazine’s last blog post: Courtney Van Dusen Interview

  25. Saved this one and would like to read it again and again in spare time. Certainly these kind of posts are always nice to read and every time they give you new reason to think.

    ZK @ Web Marketing Blog’s last blog post: 10 Tips to increase your Twitter followers

  26. That one is really a different approach and I do not think that any one have elaborate it in such a nice manner.

    SW @ Quality Squidoo Lens Service’s last blog post: Social Bookmarking Service

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