The Compounding Interest of Entrepreneurship

By On · 20 Comments · In Mobility

Firstly, check out this cool (well… kind of cool) slideshow I created using powerpoint & uploaded it via slideshare.net. It’s for my newest website www.OracleLaunch.com which is also my main business…

Secondly, after this post read How I Built a Blog with 6,500 readers on Viperchill.com (weird URL, awesome blog) this is probably the best blog post I have read this year and is all about how to make your blog or online business mucho profitable. He outlines great tactics that he used himself and for those of you who are striving to be extraordinary in your blogging or entrepreneurial pursuits this guy is for you!

Now to the main attraction…

The Compounding Interest of Entrepreneurship

When you first start any business expect to work really, really hard. Imagine a graph where effort is one side and ROI but instead of the more effort = more ROI it goes less effort = more ROI. This is the art of compounding interest applied to entrepreneurship and its totally real.

I work less now than I did 6 months ago, get more done and make more money. How did I do it? Well heck I don’t know but I know it follows the 80/20 principle and the theory of compounding entrepreneurship.

With every investment, business opportunity & even personal relationship, eventually you hit a tipping point & push through, then the going gets a lot easier.

So what is the catch?

I often refer to the four hour work week, a bestseller on escaping the 9 to 5 and one of my favorite books. But one thing the 4 hour work week left out is emphasizing the insane work it takes to get there. You may have to work 80 hours a week to build your own business or to develop a passive income stream that will allow you to truly work only four hours a week but isn’t the effort worth the payout?

Crunch the numbers…

The entrepreneur’s route: You work 10 hours a day, 6 days a week for 1.5 years = 4,695 hours of work.  Then the road gets a little easier, you only work 6 hours a day for 4 days a week for a whole year = 1,248. Soon there after you get to the goal of working only 4 hours a week to sustain your business and you work for 10 more years before selling your empire and retiring = 2,080. Total hours worked for millions of dollars in the bank and the ability to lead life on your own terms: 8,023.

Now at first glance you may think, wow! I don’t want to put out that much effort. If so grow up and stop reading now.

Now lets observe the regular 9 to 5, work for the man job. 8 hours a day for 5 days a week for the next 30 years (yes i know I’m not taking in holidays/vacations etc) = 62,4000 hours of your life! How much return to you get on that? Maybe a decent retirement package, maybe some money in your 401k. Definitely no social security (get real people it’ll be WAY dried up by then) and you lost 30 years of your life.

Entrepreneur’s journey or the typical 9 to 5 grind? Which do you chose?

8 hours a day for 5 days a week for the next 30 years.

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  • http://twitter.com/LeJonR LeJon Ratchford

    I was working 54 hrs a week along with working on my business in the evenings, it takes dedication. Some times we want instant gratification and when we do not see it we have a tendency to give up (I did this twice) NOT THIS TIME !!!!. I have currently reduced my hours to 45hrs and i am close to closing three deals. Six months from now I want to walk away from my employer. I plan to purchase the four hour work week. Great post!

  • http://www.innovativepassiveincome.com/ JadeDragon

    Agreed – hard work but you build something valuable for yourself. This time around I'm focusing on creating passive income from my efforts – and a business with no employees.

  • http://www.shaunkilgore.com/ Shaun

    Way to put it into perspective, Maren.

  • http://www.mastermindblogger.com S Ahsan

    Great post in details! Must thank you for taking the time to write it. Thanks Kate! :)

    PS: Posts like these motivates me

  • http://experimentsinpassiveincome.com/ Moon Hussain

    No thanks, Maren! I refuse to do 8-5 for the rest of my life! It's simply not worth it. Tied to one location… dislike your co-worker(s) or boss? Can't do anything about it. Plus, loyalty doesn't pay off as it once did for our grandparents and parents.

    Nice way to put it all into perspective.

  • http://www.Escapingthe9to5.com/ Maren Kate

    Phew 8 to 5 is even more brutal than the 9 to 5! haha… yeah it does suck to do something for 30 years that you don't absolutely love!

  • http://www.Escapingthe9to5.com/ Maren Kate

    Thanks glad it was motivating!

  • http://www.Escapingthe9to5.com/ Maren Kate

    Businesses with no employees rule because your overhead is zip & your profit is exponential.

  • http://www.Escapingthe9to5.com/ Maren Kate

    definitely buy it & read it, it will encourage you and get you uber motivated to fulfill that dream!

  • http://bloggersmarket.com/ Jeffrey

    I once meet this guy in camp one night while out hiking, that owned a successful construction business. He had already retired from his life's work. When I ask for that all important entrepreneurial secret, he replied. “I just did whatever it took, at whatever time of day, to get the job done”
    Nuff said !

  • http://www.Escapingthe9to5.com/ Maren Kate

    Wow I love that!! That is such an awesome quote and so inspiring… I try to do that every day. I am reading 'The Dip' by Seth Godin, it talks alot about that… great read.

  • http://noelbautista.com work at home dad

    Nice post. I went and read the How I build a blog with 6500 readers. Nice find. I think that's the key to have a successful blog. Engage with your readers

  • robmack07

    I've read the 4hww also and it's funny, Tim Ferris does write in his book that after he quit his J-O-B to start his own company he finds himself working 80+ hours which prompts him to steamline his business. He just doesn't give it much thought (in the book) like you've said.
    He also seems to totally immerse himself in any new activity he picks up, and spends a huge amount of time perfecting that skill and I'm pretty sure he tells us that is why he's able to pick up new skills quickly – because he studies the details and totally immerses himself in it. aka working 80+ or whatever hours at it. He just doesn't call it W O R K because he enjoys it, but you still gotta put your time in!

    Also I read your about me page, and in the first 4 points, you described me to a T! I'm pretty sure I have those written down for why the reasons I want to quit my job. lol Enjoying your blog so far….. so keep it up!

  • http://www.blogandlearntoearn.com/ Robert Love

    Another good read Maren, thanks.

    I owned my own brick and mortar business for a while and it was killing me, long hours and all that. But the real problem was that I wasn't enjoying it anymore. I took a bit of a backwards step, dropped the business and went back to erhemm – paid employment.

    Now I'm striving to build online businesses and I'm enjoying the interaction with like minded people so I don't see it as work which makes it easier to put in the hours at the beginning.

    Do something you enjoy for work and you'll never work again – almost…

  • http://www.Escapingthe9to5.com/ Maren Kate

    Haha, its true, if you love it then it really doesn't feel like work… but you still get paid :) Which is always good stuff

  • http://www.Escapingthe9to5.com/ Maren Kate

    Thanks so much! Glad you are trying to escape the 9 to 5 as well… how goes your journey towards entrepreneurship so far?

  • http://www.Escapingthe9to5.com/ Maren Kate

    That post is great isn't it? the 6500 blog readers one? I read it twice and was wow-ed!

  • robmack07

    It's going OK so far. I actually quit my job in late Oct. in nyc and moved to FL to pursue real estate. I didn't take a job down here and have just been researching/learning the market and looking for a project. I found one and am in the middle of one now that should sell next month and pay me more then my salary I was making. If I was smart however, I would of had a part-time job at least during the last 3 months =) I am looking to start a blog possibly about my real estate investing.

  • http://www.getridofclutter.net/ Chris

    Its interesting that the common theme running through any entrepreneur's bio is that they all worked their butts off to get where the are. Folks like Tim Ferriss, Glenn Allsopp and the like all became experts in what they do by putting in the hours in. Unfortunately, nothing comes easy. Despite all the internet programs promising as such :)
    Interesting blog btw.

  • http://www.Escapingthe9to5.com/ Maren Kate

    Thank you Chris and I agree with you, the beginning of the entrepreneurial process is seriously butt kicking… like right now I am sitting in an 24 hour cafe working away on a Friday night in Vegas. Fortunately I love what I do though :) thanks for reading!