When I was a kid there was a string of hit Disney cartoons that aired in the after-school hours on weekday afternoons. The Disney afternoon lineup included the Gummi Bears, Tale Spin, Darkwing Duck, Goof Troop, and Chip and Dale’s Rescue Rangers.
As a cartoon-loving kid, I was in my glory. I loved all those shows, but my favorite was Ducktales.
So what does watching Ducktales have to do with personal finance?
Ducktales revolved around Donald Duck’s nephews (Huey, Dewey and Louie) and his Uncle Scrooge McDuck. It was a classic cartoon and I still enjoy it today with my own kids thanks to DVD.
Let me explain.
Your feelings about money and work (and everything else for that matter) are the result of many different experiences and influences. Your parents and siblings. Your friends and their families. What you read in a book or see on tv. All of these influences intermingle and come together to form your core opinions and feelings.
And sometimes the littlest of things can have a big influence on your life. I had one such moment while watching an episode of Ducktales as a child.
The episode revolved around Uncle Scrooge in a series of flashbacks to his childhood. (I’m going on memory with this so forgive me if I get some of the details wrong).
One flashback shows Scrooge as a young duck without a lot of money (he would later go on to become the richest duck in the world so you can suspect these flashbacks will show a hint of how that happened). Scrooge found himself a job shining shoes, and wouldn’t you know a customer comes in who looks like he just walked through a patch of wet cement and let it dry. I mean these shoes were so bad poor Scrooge’s heart must have missed a beat when he saw them!
Well good old Scrooge takes a chisel and starts chipping away at them. He spends his entire day cleaning this guy’s shoes until you could see your face in them. By the time he’s done he’s out of breath, his back is killing him, and the store is closing.
He proudly stands up and holds out his hand expecting a mighty tip for performing such an amazing service. But instead the man simply thanks him, hands him a single coin and strolls right out the door.
Scrooge is seriously pissed! He busted his ass shining those shoes and he got paid chump change!
He stomps his way all the way home, slams the door on his way in and sulks around until his father asks him what is wrong. Scrooge tells him the story and his wise, old father simply tells him, “Scrooge my boy…you have to learn to work smarter, not harder.”
The next day Scrooge goes back to work with a brilliant idea. He creates a simple machine that allows him to use power he generates by riding a bicycle to polish shoes for several customers at a time. He’s able to polish many more shoes while doing only a fraction of the work…and his income absolutely explodes!
Scrooge learned a valuable lesson. If you want to make enough money to achieve financial freedom, working hard isn’t enough. There are millions of people who work themselves to the bone their whole lives and still have nothing to show for it.
Working hard is important, but working smart is more so. You see, there’s a limit to how much any one person can accomplish no matter how hard they work. And working yourself ragged will only leave you frustrated and burnt out.
So instead of working 50, 70, or 100 hours a week until the day we die…why not look to create passive income streams that can help support us with relatively little work?
5 Examples of Passive Income
1. Living off of interest earned on investments.
2. Owning a business that doesn’t require your direct involvement.
3. Collecting royalties from a book or music that you’ve written.
4. Renting out real estate.
5. Owning a web site or selling an ebook that continues earning revenue long after you set it up.
Now this might sound like a pipe-dream if you’re currently flipping burgers for minimum wage, but remember that isn’t far from where young Scrooge started out.
Building a passive income takes time and planning. But you can start small and simple with a high-yield interest account and then build from there.
Be a Scrooge…Scrooge McDuck that is.