When the old formula worked
Several decades ago, the formula was study hard to get into a good college, get a high-earning degree, and then get a good job. The package was framed simply and marketed nationwide to provide us with our deepest desire: security.
This model worked for previous generations because inflation wasn’t as crazy as it is now. Wages were proportionate to costs of living, including housing, groceries, transportation, and utility bills.
People stayed with one employer long-term because investing their loyalty and time was rewarded and sure to compound financially. Pensions were significant. And raises were predictable and tied to tenure, not arbitrary. Housing (both buying and renting) was cheap. So was higher education. There were fewer credentials required to get into top schools.
The old formula isn’t working for Millennials and Gen Z
Even now, regardless of the difference in COL, that package is still being sold to millennials and Gen Z. Big universities invest big money to sell us a degree, a job, and a life plan. We still need security. That biological desire never left us, and it’s not vestigial.
Many people are “doing everything right”: getting amazing grades in school, going to a top university and getting a degree. Maybe even getting another degree from another top university. Likely even getting an amazing job at a prestigious company and rising the ranks, being recognized for hard work and success.
Yet many of us still feel financially behind. We’re still not happy. Many of us still feel insecurity in our careers, finances, and our lives. Why does the formula feel like it’s not working for us?
Because 9-5 jobs give us low wages that are not keeping up with inflation. We’re told that job-hopping is the fastest and easiest way to get a raise. We barely have any control over our schedules.
Working for someone else is an investment – we invest our time, energy, and money on appearances to look presentable for our jobs. We invest emotional labor to keep a semblance of pleasant relationships with our bosses and coworkers, so that we could keep said job.
And YET. Layoffs are massively common, even if you have tenure and have been more loyal than a golden retriever. Whether health insurance is tied to your job is almost always one big question mark.
Housing prices have skyrocketed, and so have the costs of attending post-grad university programs. Not to mention, the three total recessions and worldwide pandemic millennials have had to live through.
Something’s gotta give
Let’s face it: careers are just not designed for exponential growth. There are salary ceilings and limited upsides. Don’t get me wrong, I am not knocking this path. I understand that there are many great things about stable jobs and that it is a complete privilege to have one. I am very grateful overall for the job experiences I have had in the past.
With a stable career, you get paid to learn and build important skills. It provides solid, structured work and a paycheck to afford the things you need (and maybe even the things you want) in life. But my argument is that they are not the fastest or most reliable path to wealth.
The difference between earning salaried income and owning income
The difference lies not in working harder, but in ownership. While careers provide stability, ownership builds leverage.
With earned income, you get paid for your time but it’s capped by your position, hours, and your employer’s budget. Earned income stops coming in when you stop working.
When you own your income, you get paid for the value you provide and the reach you build. You can scale your income without working even harder. It continues beyond a single transaction or buyer. In many cases, it keeps working even when you stop.
Inc.com highlighted the following findings, mentioning the IRS Statistics of Income Division’s “400 Individual Tax Returns Reporting the Largest Adjusted Gross Incomes Each Year, 1992-2009.”
The data offers a look at how the highest earners in the country actually make their income.
In 2009, it took $77.4 million in adjusted gross income to make it to the top 400 earners. The average income of everyone on the list was $202.4 million.
Here’s how top 400 earners made their money:
- Wages and salaries: 8.6%
- Interest: 6.6%
- Dividends: 13%
- Partnerships and corporations: 19.9%
- Capital gains: 45.8%
The article’s author derives an important point: working for a salary is extremely unlikely to make you wealthy, regardless of your extraordinary saving abilities.
Investing in stocks alone also has a very low likelihood of making you rich.
The most reliable way to build generational wealth is to start businesses and acquire assets.
What does ownership look like today?
When I write about ownership, I’m not talking about rapidly scaling a startup, or building a corporate empire. Ownership has become more accessible than ever.
Modern ownership includes content creation (including a blog, newsletters, YouTube channels, podcasts, and social media platform accounts), digital products (courses, templates, ebooks, and memberships), physical products (ecommerce, print-on-demand, books, journals), and service-based businesses (consulting, freelancing, agencies, coaching). These models share a few traits: they require more time and skill than capital upfront, they can be built on your own time, and they can typically be scaled beyond one employer’s pay structure.
In comparison to traditional careers, time and money is invested differently when you’re an owner. In traditional careers, we’re rewarded and promoted for our credentials, resumes, and how well we can create and develop relationships within our workplace.
By contrast, ownership requires building an audience, wearing many different hats, stacking skills and creating things that solve everyday problems. It requires investing in apps, software, inventory, production, and distribution, and in your own continuing education.
It definitely does not come without risk. But it’s an intentional risk with potential for huge upsides.
Entrepreneurial attractions
Entrepreneurship is by no means a glamorous or romantic job. Sending e-mails, bookkeeping, planning logistics, and maintaining systems do not appear to be a far cry away from being an employee.
The difference lies in purpose. Ownership gives entrepreneurs the privilege of working on something they chose and are passionate about. For them, financial and emotional wealth become deeply connected. For most entrepreneurs, ownership is where these two finally align.
Reconciling job insecurity and ownership
Facing a job loss, burnout, or disillusionment have left me feeling sad, ashamed, and disoriented. It took me way too long to realize that shame after losing a job doesn’t mean I am incompetent or unworthy.
It’s just a result of existing in a system that equates employment with worth, a culture that treats stability as morality, and following invisible terms that we were taught but never actually agreed to.
Feeling shame wasn’t proof that I failed, it was evidence that I deeply believed in and relied on those terms.
Investing in ownership doesn’t reject those terms, it recycles them. I don’t believe that starting a business and owning something means “the system is wrong and I am above it!” I think it is more of a realization that I learned the system’s limits, and I would like to choose a wider playing field.
Success, redefined
Losing a job and having to look for a new one teaches us to how to present at our best when we know we’re being evaluated. It trains us to want to be chosen, to be picked, to be filtered.
Overtime, I do think this erodes dignity and creativity.
Ownership values progress over the approval of others. It requires learning over impressing, and agency rather than permission. It switches the perspective from “am I good enough to be picked?” to “am I willing to keep building something that reflects my values, even if it is imperfect and risky?”
And I think that’s the questioning that returns personal dignity.
Wrap-up
If there’s anything I hope that you get from this article, it’s this: careers aren’t obsolete by any means! They are just limited. Modern wealth increasingly comes to those who own what they create, control distribution, and build multiple assets alongside their income.
Thank you for taking the time to read this article!