If I want to be rich and wealthy, I need to change my mindset to invest in assets that generate passive income. Becoming rich has nothing to do with how much I earn. This is what I have learned from the book Rich Dad Poor Dad by Robert Kiyosaki. If I had earned a lot and spent on luxury items, I would be simply wasting my opportunity to accumulate wealth. In fact I would loss out to someone who had earned much lesser and invested in assets that generate passive income. In the long run, he would be able to accumulate more wealth than me.
Since it is possible to invest in assets to earn passive income, is it possible to invest in assets that generate passive time?
Before I investigate into details, let us have a common understanding of what is passive time. I define passive time as time gained to accomplish things with little or no human intervention. Just like in the case of passive income, it is earned with little or no human intervention. For example, when I invest in a property to collect rental income, there is little or no work required on my part to earn that rental income.
Based on my definition of passive time, are there assets that generate passive time? To answer this question, let look at the example of a washing machine. As we all know, a washing machine helps to wash clothes. But it helps to generate passive time too!
Firstly, a washing machine will wash the clothes automatically after I have choose the washing option and set it running. This means that I can be doing some other things while the washing machine is washing the clothes. Passive time is earned because the washing machine is washing the clothes automatically. All I need to invest is a little time to choose the washing option and set it running.
Secondly, a washing machine speeds up the washing process. Imagine if I were to manually wash my clothes, I would have to spend much longer time than the washing machine. In this sense, passive time is earned because now I can do the same amount of work in lesser time. All I need to do is to invest some time to choose, buy and install a washing machine.
In other words, an asset such as a washing machine that automates a manual process is considered to be generating passive time. Also, an asset such as a washing machine that improves the efficiency by speeding up the process is considered to generate passive time. Thus, I should be looking for assets with these two features to generate passive time.
Since I already know how to identify an asset that generates passive income, the next step will be on how to select relevant assets to fit into my life so that I can gain passive time. Before that, let me explain what do I mean by relevant asset.
A washing machine is relevant if I use it to wash my clothes. When I use it to wash my clothes, then I am earning passive time. If I do not use the washing machine at all, then it is a liability since it does not earn passive time. Just like if I have a property, I need to rent it out to earn passive income. If I do not rent it out or fail to rent it out, then I do not earn passive income. In this case, the property will be a liability based on my understanding from the book Rich Dad Poor Dad, by Robert Kiyosaki.
To be able to identify relevant assets, the first thing I must do is to identify all the manual processes in my daily life that can be either automated or speed up or both. That is I must keep a time statements just like I need to keep a personal financial statements. A financial statements help to identify how I spend my money. Similarly, a time statements help to identify how I spend my time. In short, a time statement is like a recording of all my daily activities.
I will probably need record all my daily activities for about a few month to identify how I spend my time. Based on the list of activities that I am always doing, I need to filter through the activities and see if I can automate or speed up some of my daily activities by investing in certain assets that generates passive time. In this way, I can identify the relevant assets to invest in.
Why am I focusing so much on learning to invest time? Well, time is one of the two things that are available that I can invest so as to create wealth based on my understanding from the Rich Dad’s Series by Robert Kiyosaki. The other being money. Since I need to have more time to invest so as to create wealth, I need to learn to invest time to gain more passive time!