Why Profits Are Better Than Wages: Lessons from Jim Rohn for the Modern Executive
My very favorite personal and professional development guru is the late Jim Rohn.I have learned a lot from him that applies to my personal life and my work as a franchisor advisor. One thing I buy into wholeheartedly is that PROFITS ARE BETTER THAN WAGES. This timeless insight offers profound wisdom for middle-aged executives navigating today’s corporate landscape.
Every day I speak with executives in various industries and roles. Their career success has been built on climbing the ladder, securing promotions, and earning substantial salaries. While this path provides financial stability, it often comes with limitations that profits can overcome. Let’s delve into why profits are a superior pursuit and how this shift in mindset can redefine your career, wealth, and life.
The Limits of Wages
Wages—whether earned through a salary or a steady paycheck—represent the value of time and skill exchanged for money. While they provide financial stability, they are inherently capped. No matter how high your salary climbs, you are still trading your time for income. The constraints include:
- Time Dependency: Your earning potential is limited to the hours you work. Even in leadership positions, the demands of the job mean your time belongs to the company.
- Tax Burden: High-income earners face steeper tax brackets. Wages are taxed at some of the highest rates, cutting deeply into your take-home pay.
- Lack of Scalability: You can work harder and longer, but there’s always a ceiling. A salary is a linear growth model, and breaking beyond it often means sacrificing work-life balance.
Why Profits Are Superior
Profits, on the other hand, embody the freedom to create, scale, and multiply income streams. As Jim Rohn famously said:
“Profits are better than wages. Wages make you a living; profits make you a fortune.”
This principle is the key to unlocking exponential growth and wealth creation. Here’s why profits outshine wages:
- Unlimited Potential:
Profits are not tied to the number of hours you work. Whether through business ventures, investments, or side hustles, profits grow independently of your time input. - Tax Advantages:
Profits often come with significant tax benefits. Capital gains, business deductions, and other incentives allow you to retain more of your wealth. - Scalability and Leverage:
Through profits, you can scale your business. A successful product, a strategic investment, or a well-run side business continues generating income without direct daily involvement. - Ownership and Legacy:
Profits come from ownership—of a business, real estate, intellectual property, or stock portfolios. These assets can be passed on to future generations, creating lasting financial security.
A Path for Middle-Age Executives
As an executive with 20 – 30 years experience, you’re at a pivotal point in your career. You’ve likely achieved professional stability, but now is the time to think beyond wages. The years ahead offer opportunities to diversify your income and build wealth through profits. Here’s how to start:
1. Build a Side Hustle
Leverage your expertise into a profitable venture outside your day job. Whether it’s consulting, creating digital products, or having a small business. Side hustles can scale into significant income sources. Be sure to check out which franchises that can be run as a side hustle.
2. Invest Strategically
Shift a portion of your earnings into assets that generate another source of income. This might include dividend-paying stocks, rental properties, or an online business . With compounding returns, profits can grow exponentially.
3. Create Intellectual Property
If you have specialized knowledge, consider writing a book, launching an online course, or hosting a podcast. These ventures require upfront effort but can generate ongoing profits.
4. Entrepreneurial Projects
If starting a business from scratch isn’t for you, consider exploring franchises. They provide proven business models, marketing strategies, training, support, and systems.
- Embrace Digital Tools
The digital age has made profit generation more accessible than ever. Platforms like LinkedIn, YouTube, and Substack can turn your personal brand or any brand for that matter into a revenue stream or an enhanced one.
Breaking Free of the “Golden Handcuffs”
Many executives feel trapped by high-paying roles, reluctant to pursue profits due to fear of losing financial stability. But remember, diversification is key. Profits allow you to explore opportunities without leaving your current position immediately. It’s not about choosing one over the other—it’s about building both.
By embracing profits alongside wages, you not only secure your financial future but also gain the freedom to retire on your terms, support your family generously, and leave a legacy.
Final Thoughts: Profits as a Mindset Shift
The lesson Jim Rohn shared years ago resonates today more than ever. Profits represent creativity, ownership, and freedom, while wages keep you tethered to linear growth. As a middle-aged executive, it’s time to ask yourself: Are you living to maintain your paycheck, or are you building a fortune that transcends it?
The journey from wages to profits isn’t always easy, but the rewards—financial, personal, and professional—are worth it. Shift your mindset, take calculated risks, and step into a future where profits power your purpose.
Engage and Share Your Thoughts
What steps have you taken to prioritize profits over wages? How has this mindset influenced your career or financial goals? Share your experiences in the comments below!
