
(Photo by rollerboogie)
In the first part of the Money Mindset Series, I highlighted some money mindsets that may be hindering our financial success and living a balanced life. In the rest of the series, I will take some common mindsets and expand on them. In part 2, I like to address the following common mindsets with regards to work and money:
- I have to work really, really hard to get rich.
- Striving for wealth won’t allow much time for anything else in life.
- I love my family, so I should work really hard to provide for them.
THE OLD SCHOOL MONEY THINKING

The old school money thinking teaches us to study hard, get good grades and get a well-paying job. Next, work hard and wait for the annual increments. If you are good at your job, there may be promotions every 3 to 5 years. With this concept, your income will increase over time as shown in the chart below. It definitely looks like a good idea, having the security of guaranteed income every month which is increasing every year. It does seems that good life is ensured with this approach… or is it?

With this mindset, people have to tendency to trade time for money. The longer the duration you’ve committed to a job, the more money you will have. The amount of salary that you draw is justified by the time that you’ve committed to work.
This mindset is still very apparent at the modern workplace today, where managers are overly concern about the issues like punctuality and if you are spending enough time in the office. Working from home is still very much a taboo topic and not encouraged by many employers. Managers also have a tendency to evaluate workers’ commitment based on how much time they spend at work.
YOUR SALARY - THE BUSINESS REALITY
Profit = Revenue - Cost
The above is a basic business accounting formulae - the bottomline of all profit-making organizations is to earn profits from the products and services that are delivered. As such, to maximize profits, one must maximize revenue while minimizing cost.
Salary is one common cost for business operations. By increasing employees’ salaries, cost is increased. This is contrary to the objectives of profit-making organizations. As such, the nature of business already presents little incentives to continuously increase employees’ salaries.
There’s a saying that I like to quote from Rich Dad, Poor Dad:
Workers work hard enough not to be fired, and owners pay just enough so that workers won’t quit.
As negative as it may seem, I have to say from my work experiences that there is a certain element of truth in this statement.
Business owners will pay you just enough so that you stay happy with your job and not leave for another company. I am not saying that all business owners are selfish and greedy mercenaries; I have worked with really kind and good business owners. However, the nature of business is as such, that we need to make such tradeoffs for a business to be sustainable.
In order to maintain the same amount of profit, revenue must increase along with cost. This means the employees with high salaries are expected to deliver more and help the company generate more revenue to justify their higher salaries. As shown in the chart below, a common reality for many workers is to work harder as their salaries are increased.

SETTLING FOR JOB SECURITY
Despite the above scenario, many workers continue with their old school thinking.
From many of my friends, acquaintances and colleagues, the common stories I’ve heard about career are often similar - if one is passed over for promotion or increments, then the natural reaction is to put in more hours, take a course to upgrade, or to find another job. Essentially, it means work harder.
If this is the case, why do people choose to settle for such a rut? One reason I believe is that many of us have not realized the effects of old school money thinking (which is what I hope to educate readers through this blog), and the other common reason is the beloved job security.
We have bills to pay, debts to service and mouths to feed. With these financial commitments, the idea of guaranteed income every month is hard to pass over. On the surface, it may seem that the prospect of earning a stable income by appearing in the office from 9 to 5 is a good deal. As such, many of us settle for less by trading our precious time for job security.
For the sake of job security, many of us allow the amount of work to pile up and we react by pumping more time into our work. It is only a matter of time when the work level will raise to an unbearable level.
This, in my opinion, is one of the key reasons behind worklife balance challenges.
WHY JOB SECURITY IS BULLSHIT IN THE 21ST CENTURY
In recent years, the notion of job security is fast becoming a false reality.
The nature of business that I’d described has existed since the industrial age. However, it is only in recent years that this model starts to fall apart. With globalization and outsourcing of work to low cost countries. Businesses today are constantly facing pressures to deliver more with less resources. Competition has gone global; now, businesses need to cut cost and squeeze every drop of value from each employee to be sustainable.
If you are still thinking that by showing loyalty and diligence at your job, it will mean job security, you need to move out of this mindset quickly. Businesses today can no longer justify your salary by these same qualities. I am not saying these are not good qualities to have, but a business has other bigger considerations than these.
Globalization is a macro force that is well beyond the control of many of us, including employers and even governments. When there is a need to retrench a portion of the local employees and move operations overseas so that business is sustainable, then it has to be done. As such, from such a perspective, there is no longer any true job security per se.
IMPLICATIONS FOR EMPLOYEES - NEED TO CHANGE MINDSET
This article may seem rather pessimistic up till this point, but I truly believe that this is a bitter medicine that we all need to take before the disease of ‘old school money thinking’ becomes terminal. In any case, I do believe that it is not all doom and hopeless.
Workers of the 21st century need to move out of the old school thinking and adapt to changing times. The following are some of my recommendations to mindset changes:
- Focus on value creation - employees have to move away from the thinking of trading time for a fixed salary, and instead start focusing on value creation. Only when you are capable of contributing towards the bottomline of your company, then can you be ascertained of your job security. Ultimately, when there is a retrenchment exercise, people of high value creation will certainly be last in the list to go (not those who have worked the longest time). As you can see from the chart below, when the value that you create exceeds your salary, it is an easier task to justify keeping you around.
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Realize the true value of time - The only true resource that you own is your time. To be able to focus on value creation with the limited amount of time that you have, you have to start appreciating the true value of time. To illustrate my point, answer this question: “How much are you earning per hour now?” If you don’t know you can find out by using the following formulae:
Hourly Rate = Monthly gross salary / 22 working days / 8 hours in a day
The objective of this exercise is to help you focus on activities that can create value greater than your hourly rate. I understand that it is not always possible to quantify the exact value of your work but a rough estimate is still more useful than none. Once you have established your hourly rate, you can then focus on work activities that generate value greater than your hourly rate.
To achieve this, here are a few tips I can provide:
- Delegate lower value work to subordinates, assuming they have lower hourly rate than you.
- Outsource the lower value work to others.
- Outsource task you are not effective at to vendors who are more proficient at it than you are.
By focusing majority of your time on creating high value work, you avoid overworking yourself by trying to do everything. This not only applies at work but also at home. Personally, I have outsourced my household chores to a part-time maid who is paid on an hourly basis. I pay her about $150 per month to clean up my house once a week. To some friends, it seems like unnecessary expenses and over-indulgence. Little do they realize that with the hours that I save, I am able to create work with value greater than $150 every month. At the same time, I enjoy a better worklife balance.(Following the Money Mindset Series, I will be publishing another series on work and career. In this series, I will also expand on this concept of value of time. So stay tuned for it.)
- Stop depending on a single source of income - to enjoy true financial security, you need to stop depending on your primary job as the only source of income. There is simply no telling when the next economic downturn will affect your job security. You need to spend some personal time to develop secondary incomes sources as follows:
- Develop passive income streams through personal work e.g. blogging, selling stock photos etc.
- Passive income through investments in real estates.
- Capital appreciation through investments in mutual funds, stocks and shares.
Developing secondary sources of income requires that you be smarter and focused about how you spend your personal time. It will take some efforts upfront, but it will definitely be a better payoff over time.

INCREASE INCOME WITHOUT INCREASING WORK
To have more balance in your life, you need to shift your focus to value creation and generate additional income streams over time. The above 3 tips is aimed to help you develop the balance as show in the chart below:

Please note that I’m not saying that value creation does not require hard work. As the chart above shows, there is certainly some upfront efforts required. However, by focusing on value creation and creating additional streams of income, the amount of work you need to do will drop in proportion as the amount of value (and income) that you create increases. To a certain extend, the cliché statement “work smart, not hard” has its validity.
I believe that this is one truly sustainable approach towards living a balanced life. To do this involves changing your traditional mindset about work - working harder no longer matters as much; start creating value and additional income streams.
To do this, in part 3 of the Money Mindset Series, I will be expanding on the money mindsets related to investments in mutual funds, stocks and shares, which is a simple way of generating additional income. So look out for it!







[…] Why You Should Stop Working Hard For Job Security (Money Mindset Series II) […]
Hi Lawrence, Do you mind to share how and what kind of money do you manage to get/earn from blogging? thanks for your sharing. Its very true indeed!. keep it up!:)
Hi Onehubster,
Although I have to be honest that earning passive income through this blog is one of my long term objective, I am still very new to blogging and cannot claim to be qualified as a good reference for earning passive income via blogging.
I certainly look forward to the day when I am in the position to teach people a good way to earn passive income by blogging, but I believe that it’s still be some way to go.
However, other than blogging, there are other ways to earn passive income over a longer term. I’ve some minor successes with investing in mutual funds and it has been a great help for me financially. Which is why I will be discussing about investing in part 3 of this series. So look out for that in the coming days.
Yes, this is a great theory. Although I can imagine it would be very difficult to put into action by those who are not business-inclined. I’ll be keeping my eyes peeled for part 3
Hi Jblu,
Thanks for highlighting the difficulty. I will pay some attention to your feedback. Indeed, I learned about these concepts only when I moved my work focus from technical software development into business development. I feel that it’s valuable knowledge that everyone (including non-business folks) should know.
My aim for this article is not to provide the know-how of value creation or generating passive income. Rather, it is to create awareness of the need to move away from the old mindset.
There is simply too much about the know-how portion to cover in one article. As such, I will be discussing about investing as one of the options to generate passive income in part III of this series.
As for value creation, it is something that I have learned lately from a Jay Abraham course that I am attending. It has a great impact to a successful career and business, and I intend to cover this in my next series on Career.
Hope this helps to put things into a better perspective.
Hi Lawrence!
I think this is your best article about money so far! I love the graphics, too!
One suggestion for later articles is that you explore the concept of leveraging as a way to increase value without increasing workload (to demystify the idea of a magical “passive income”, if you know what I mean…)
Hi Luciano,
Glad that you enjoy the information.
Thanks for the suggestion. I think that’s a good idea. Leveraging is indeed a concept that’s abstract and difficult for beginners to understand. I believe there a few ways to leverage, depending on different context:
1. leverage on others’ expertise - as in outsourcing.
2. leverage on money and time - as in investing.
3. leverage on internet - as in blogging for passive income.
I will cover them in this series and my next upcoming series on Career.
Thanks again for this great suggestion.
Those are great tips Lawrence! I’ll look forward to reading your next article
creating value - what is it?
i’ve always wondered what exactly does it mean to “create value”? in the context of your article, does it mean doing more than what you are paid for? “going the extra mile”, so to speak? some examples would be great. ^.^
Hi Guan70,
this is a great question. I remember that I used to struggle with this question and have given much thoughts to it. Many gurus out there advocate value creation, but what exactly is that and how do we create value??
Depending on context, there are different ways of looking at value creation, and I intend to talk about value creation in more details in my next series on Career.
However, here’s a quick and dirty answer to your question. In the context of business and most office jobs - value creation is tied to the accounting equation:
Profit = Revenue - CostAs such, any activities that have direct/indirect impact on either increasing revenue or cutting cost can be classified as value creation.
A simple example for a salesman is - closing a deal is definitely value creation as it generates revenue. The more deals he closes, the more value he creates. Clearing emails, attending sales seminars are not value creation. However, they are necessary activities to support value creation activities.
Hope this helps.
Excellent article!
Well laid out and thoroughly discussed.
Nice post, and nice way to build on that RDPD principle. Read that book about 5 years ago and it changed my whole way of thinking. I’ll RSS you so I don’t miss the next installment. Cheers!
Hi SEO Guy,
thanks for the encouragement and support.
Multiple sources of income is one of my main goals these days. If you can build up a few streams, then losing one will not mean the end of your (financial) world. It will simply be a small setback that can easily be overcome.
Blogging has been a huge gift to me, and is my first additional income stream besides my day job. The larger it gets the more I think about the day when a day job may not even be needed.
Seo guy -
What is the RDPD principle, and what book did you read it out of?
Lawrence, that was one of the best articles I’ve read on the subject for quite some time! You covered the angles and kept it short without being banal.
Hi Bart,
RDPD stands for Rich Dad, Poor Dad.
And thanks for the compliments. I’m glad you find this useful.
[…] part 2 of Money Mindset Series, I will be talking about the old school money thinking, and how this money mindset is actually not […]
Great post Lawrence. Somehow it seems I was once aware of most of what you explain in this Money Mindset Series. I believe that social conditioning and/or business companies have successfully implanted the figurative carrot permanently in front of my face. But no more. Hearing you say “WHY JOB SECURITY IS BS IN THE 21ST CENTURY” makes all the difference for me.
Hi Gil,
It’s been some time! Glad to have you back
Yup, that’s what the message is about and I glad that it helps you.
Just want to reiterate that Business folks are not necessarily mercenaries. It’s just the nature of business. As employees, what we need to do is to adjust our expectations of job security and focus our efforts on building security ourselves.
[…] start to worry about job security because you have debts. For job security, you compromise your standards and your ideals. You settle […]
Lawrence,
Excellent post! Particularly for those of us who were raised with the proclamation: “If we just work hard enough and long enough our lives will turn out fine – eventually – and it will all be worth it in the end…”
David
This is a great series. I enjoyed the way you brought forth your argument and reasoning. I see where you are coming from with the mindset of an employee as opposed to business owner. These are great points if you are business-inclined.
I also do agree very much that there is no such thing as job security. This is something that every one should be aware of.
CC Jesup
your ideas make me want to start rigth now
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Nice Content Very Usseful
In the first part of the Money Mindset Series, I highlighted some money mindsets that may be hindering our financial success and living a balanced life.