Are you a bucket carrier? Do you work hard each day, being convinced that the only way to make money is to work hard, and yet end up each month with little to show for it? Do you work overtime or two jobs to try to make more money? Do you work nights and weekends, being convinced that doing so will lead to a bigger paycheck and financial security?
Or are you a doctor or a lawyer with a nice car and a fancy McMansion, who takes lavash trips each year, yet still has large balances on your credit cards which never seem to get paid off? Do you dine at all of the fanciest restaurants, yet never seem to have the cash to pay for the air conditioner when it breaks, or have no money saved up for college tuition for your children? Maybe you make $200,000 per year and yet only have $30,000 in your retirement account with retirement only 10 years off. If you lost your job, got hit by a bus, fell ill and were unable to work, had a spouse get sick and needed to take time off to take care of her/him, how many months could you go before the creditors started calling and your car was repossessed? Could you keep your home if you were out of work for a year?
Maybe you make a good income and give a bit to your local church, but would like to do more. What if your neighbors lost their house in a fire – would you be able to really help them get back on their feet? Do you have the cash to put them in a hotel for a few weeks while they sort things out? With all of the money that goes through your hands each month, do you keep enough to really make a difference, or does it all seem to disappear?
Burke Hedge’s The Parable of the Pipeline explains the issue. Chances are you are a bucket carrier. Don’t feel bad – most people are bucket carriers. We live in a bucket carrier society. We are taught that you must carry buckets day after day, go to school to learn to be bucket carriers, aspire to carry bigger buckets, and carry more buckets if we want to earn more money. While you are young you can carry many buckets, day and night if needed. You spend day after day carrying buckets, trying to get ahead, yet every night you use up all of the water and have nothing to show for all of your effort but an empty bucket in the morning.
We are all a society of broke bucket carriers – that is the norm. We carry buckets all our lives, breaking our backs and wearing ourselves out until we are nothing but shells. If we get injured and are no longer able to carry buckets, we may lose our income, our possessions, our spouses, and our children.
But there is another way to get water and not be bucket carriers all of our lives – actually there are two. Both take work and sacrifice. Both require that we forego enjoying some of that water, because water is cash, and cash is the time that you put in carrying buckets which you can trade for whatever you want. Will you trade it for useless things that are gone in a year or a week or a night, or invest it such that you won’t need to always be carrying buckets?
The first way to stop from being a bucket carrier is to do as described in the parable and build a pipeline. Trade some of your water – the cash you received for your labor – for assets. Things that will provide income for you that you do not need to work to generate. Things that will pay you money when you are sick or retired or on vacation. Things like stocks, real estate, or bonds.
At first the other bucket carriers will make fun of you. They will be driving a nicer car, be buying a nicer house, be going on nicer vacations. They will be eating out while you are bringing in your lunch. They will be wearing fancy new clothes while you get the most out of each outfit. They will be going to the bars each friday night while you sit at home (or maybe are even out working a second job delivering pizzas).
But you will be building your pipeline. Buying up shares of stocks a few hundred dollars at a time from each paycheck. Putting away money for retirement in your 401k account or saving up money to pay cash for a modest house.
With time your income will exceed that of the bucket carriers around you since you will have both your assets paying you money and your job. You will be able to buy some of the things they are buying, but you’ll buy them with cash rather than credit and loans. You will be able to use the water from your pipeline which you can receive at the turning of a vale to start building more pipelines. Each new pipeline will be easier to build since you’ll be using the water from the pipelines before it to fund it.
The second way to avoid being a bucket carrier all of your life is to spend some of your time building the well. Provide the source of the water for others (start a business) and then have each of the bucket carriers you employ provide you with some of the water they carry. The more bucket carriers you have gathering water from your well, the more water you will receive in return. In the end you will have provided thousands of people with the opportunity to gather water for themselves and enriched yourself at the same time.
So the choice is yours. Spend all of your energy gathering water and using it each day. Live your whole life as a bucket carrier. Or lay a pipeline or build the well. After an initial monumental effort you’ll have all of the water you need without ever needing to go to the well again. But first, you’ll need to stop being normal.
What do you think? Are you a bucket carrier, or have you started to build your pipeline? Let me know! Please send me an email at [email protected] or leave a comment.
Follow on Twitter to get news about new articles. @SmallIvy_SI
Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.
