Do Your Investments Pay You More than Your Job?

I’m not sure how many times I’ve told people, “you need to get your first $100k as soon as you can.”

It’s a pretty big milestone for a young investor. One, you’ve socked away more than most people will ever do in their lifetime (sadly). B, you can finally start to see the stock market working for you.  What do I mean by that second point?  Well, it’s no secret, my site focuses on stock investing.  It’s my investment drug of choice, despite having dabbled in just about every means of investing under the sun.

Once, you’ve hit $100,000 in investments, you might finally realize something cool.  You can make more in 1 day from your investments than actually working your day job.  Now don’t quite you job just yet, it works both ways too.  You can lose a lot more than working your day job as well (I lost $45,000 in 1 day, it sucked).  But lets think about this for a little.  There are a number of days in the year where the stock market moves +/-1% for the day.  If you have $100K socked away in the markets, you’ve made $1,000 without having to show up for your day job.  Pretty cool stuff, huh.

Now lets think about it another way, in multiples of that $100K.  Say you’ve got 5 times that socked away, so $500,000.  A 1% move in the markets gets you $5,000 in 1 day.  $1,000,000 gets you $10,000 in a day.  That should be blowing your mind.  Now this is getting you in the area of making more in a day from the markets compared to working a whole month (or maybe 2 or 3).

What I hope you realize from this post: You can make more from investing than from having to work your job.  There is a catch.  You have to work that job for a while, and slowly but surely build up your investment portfolio.  Eventually, some of these numbers may just apply to you…then you’ll start telling youngsters they need to hit their first $100k as soon as they can.

Here is an overly generic calculator to use.  You can plug in some of your variables and see if you make more from investing vs working.

Feel free to download and make the document editable.  That way you can plug in your own figures.  Just a fun different way to think about money.

For about the last 8 years, I made more from investing than working.  It’s an awesome feeling and I hope you get there too.

Last story.  I remember when I was younger (probably 23 or 24) and on a work trip with a coworker a few years older than me.  We had about a 2 hour drive to get to our destination and that’s a lot of time to talk.  He was a former engineer, entering the world of finance.  We got to talking about investing, me planning to retire early, and other stuff.  I remember somehow talking about making more from investing than working, it’s what the rich did and I wanted to do that some day.  He didn’t think it was possible for an ordinary person to make more from investing than working (a mindset problem).  My response “you’re an engineer, you should know math and compounding.  Money is no different from math, just add a $ sign in front of the numbers.  Anyone should be able to do it if they really want it bad enough.”

On one of my last days at work, I saw him in the lunch room.  Told him I was leaving after all of these years.  I asked him if he remembered our trip from years ago, yes… I said “Told you it was possible.”

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