What is Salary?
Salary is a fixed regular payment, typically paid on a monthly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.
It is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis, says Wikipedia.
Sounds a bit technical, huh? Lol. Don’t worry, I won’t ask you in an exams so you don’t have to cram that. Just know that salary, is a specific amount of money that an employee is paid for work done, mostly at the end of the month.
Related: How Secure is Your JOB?
Types of Salary
What is your Salary?
I am not interested in the amount but the type of salary. For your information, there are different types of salaries. Read till the end and you will understand.
There is no average income. The rich are becoming richer, while the poor are getting poorer. There is no middle class because it has completely disappeared.
The big question is, which type do you earn? Someone categorised the Salary people make into the following:
1. Onion Salary: – You grab it, you open it, and you cry.
2. Storm Salary: – You don’t know when it’s coming or going.
3. Menstrual Salary: – It comes once a month and lasts only four days.
4. Magic Salary: – You touch it and it disappears.
5. Amnesia Salary: – You can’t remember what you spent it on.
6. Time Travelling Salary: – You spend it paying various debts even before you collect it.
7. Active Salary: – Once you stop working, it stops.
See also: MY TEARS, MY WISH!
There is another source of income called RESIDUAL INCOME.
What is Residual Income? It’s a kind of income whereby you work once, and it keeps paying you over and over and over again even AFTER you have stopped working. I will come back to this later on.
Residual Income is the direct opposite of Active Income which is the money you earn as you work. In other words, your salary is a source of Active Income. If you fall ill, put to birth, or receive the quit notice, your income ceases.
Whether it’s magic salary, amnesia salary or onion salary, the moment it STOPS coming, your life becomes unbearable. Only your investment can keep you going even after all the onions, amnesty, traveling, active salaries have left you drenched.
Financial Literacy is the tool needed to transform your Salary into a Residual Income, so you can create financial freedom and time freedom.
See also: The Fastest Dog Eats the Freshest Bone
The Problem With Salary
Research has it that the poorest group of people in the world are Salary earners, next to beggars. They live in a vicious cycle of poverty managed on 30 days. Salary is continuously being awaited every month and any slight delay brings about heartbreaking anxiety, pressure, and disappointment.
Salary Is a short term solution to a life time problem. Salary alone cannot solve your money problems. You need multiple Sources of income to balance.
The tax returns form contains about 11 income streams, salary is just one. Don’t live your life fishing with just one hook, there are many fishes in the ocean.
Salary is the MEDICINE for managing POVERTY, not the CURE. Only your BUSINESS or INVESTMENT Cures Poverty. Most investors are not salaried earners.
The difference between those beggars on the street and salary earners is one month’s salary. Truncate the flow of their salary for one month and you would realize majority belong to the lower class.
If you divide your salary by the rate of exchange, you will discover that you are poorer relative to when you started work. Or divide your salary per annum by 2,000 hours to know what your one hour is worth.
If you do not have 3 months salary in savings, you are already poor. Being a salary earner is a mentality, break it! Your worth Is far more than your salary.
Salary is the value someone has put on your effort. The real question is: How much do you value yourself?
You can’t increase in value unless you VALUE yourself differently. Life Is a trade off between time, effort and reward. To be rewarded more, you have to become more valuable.
Most salary earners end up poor in the long and short term. Someone once said that salary is the bribe they gave you to forget your dreams. There’s much truth in that – unless you discipline yourself to acquire some Financial Education that will lead you out of the rat race.
The Way Out of the Rat Race
The simple way out of the rat race is to be financially literate and train your eyes to see opportunity in problems.
If you have the choice, instead of waiting for white-collar jobs, why not consider delving into entrepreneurship?
Even if entrepreneurship is not your thing, you should think about having at least part of your monthly paycheck devoted to certain investments that are guaranteed to earn you passive or residual income. These include real estate, shares, stock, multilevel marketing, automated business, paper investments, and lots more.
This is where creative budgeting comes into play. Do you have one? You need a working budget. I can help you prepare one for yourself. Simply chat me up here.
Diversify your sources of income to include at least two or three streams of income. This is how to ensure financial security even as an employee so that you will not be like many that retire into penury after 35 years of hard work.
Finally, being a salary earner, an Entrepreneur or an Investor is a decision. Each has its own pros and cons, risks and challenges. If you are not happy with your current state of finances, you need to understand that life will not change until you decide to do something about it. Take that decision to become financially literate now.
On my next post, I am going to make some comparative financial analysis of certain jobs so you can understand with me why your salary is not just enough to sustain in you in this economy.
PS: The original parts of this article first appeared on one of my Whatsapp business groups, hence the true author is unknown. However, all restructuring, edits and paraphrasing are mine.