Why You Need More Than Just Your Salary To Be Financially Independent


Some people equate how much they ‘earn’ to how much they get ‘paid’. I used to think that too when I started university. You get income from your salary when you get a job. So the plan was work hard to get a good job so you get a good salary and therefore a good income. Right? Hm, maybe. But as I got to my second year and I started making ‘income’ even though it was not my ‘salary’, I started to think a little different.


Your salary and income aren’t the same thing. Your salary can be your primary source of income, and indeed is a good chunk of a lot of people’s income. But it is not necessarily your only income. So many people have made it to the their financial goals without being on a ‘salary’. The idea is that they created multiple streams of income.


Your job holds the keys to your salary. They give you a figure and tell you that’s what you get paid for working for them. That’s fair enough – they’re in control. YOUR job, is to be in control of your income. Note the difference. Your income is not limited to your salary.



Too often, parents direct their kids to the mindset that accumulating wealth or being financially successful can only be achieved by attaining a good job and getting a good salary. That salary = income and that’s all there is to that. Mama and papa did mean well. A good salary can be a good starting point to making a good income, and again is a fair amount of where we all start from on our journey to financial freedom. The point here though, is shifting our mindset from ‘I’m waiting to get a good salary to get a good income so I can [insert future dreams].’ To ‘ I don’t have a salary/I have a decent salary, but I have multiple sources of income so I’m [insert future dreams].’


Some people have defined financial freedom as ‘when passive income exceeds active income.’ In other words, when you are making money whilst sleeping instead of actively working for it. It is the freedom to choose how you want to live your life, without working actively on a job or running from paycheque to paycheque. That my friend, is the dream that we all have.


Passive income might include income from real estate, dividends or returns from shares in investments, or even your side business bringing you money without you being hands on with it. No one is saying you won’t do any degree of work, after all, those rental properties did take a while to buy and even longer to find tenants, didn’t they? Good things come to those who hustle, hard. The difference is active income is directly correlated with you being, you know, active on it. For example, at my job, we get paid for being active on client site, working actively to meet a deadline and so on. My hours spent at work = my pay (more or less). I have a time when I start work and a time when I end work. During those times, I’m actively working to get paid. I don’t get paid on the weekends because I don’t work on the weekends, and I definitely do not get paid when I’m sleeping.


Take home advice: You are in control of your income. Your boss is in control of your salary. Be more focused on creating multiple streams of income. I’d throw in here that this can also be multiple salaries. Back before our parents knew about passive income, they knew active income and knew it well. Their multiple streams of income may not have been through real estate or shares but actual multiple jobs providing multiple salaries. We even know of single parents who work different jobs round the clock to make ends meet. Those are still multiple streams of income, but remember the goal is to be financially free and not just ‘slaves’ to our jobs.


-Bukiie Smart

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