The Parable of the Pipeline (from Burke
Hedges)
PART
I. We Live in a Bucket-Carrying World
Lesson
one
Who
Are You – a bucket Carrier? Or a Pipeline Builder?
“Bruno, I have a plan,” Pablo said the
next morning as they grabbed their buckets and headed for the river. “Instead
of lugging (carrying) buckets back
and forth for pennies a day, let’s build a pipeline from the river to the
village.”
Bruno stopped dead in this tracks.
“A
pipeline! Whoever heard of such a thing?” Bruno shouted (From the Parable of
the Pipeline)
Who
are you?... A bucket carrier? Or a pipeline builder?
Do you get paid only when you
show up and do the work, like Bruno the Bucket Carrier?
Or do you do the work once and
then get paid over and over again, like Pablo the Pipeline Builder?
If you’re like most people,
you’re working the bucket-carrying plan. I call it the “Time-for-Money
Trap.” You know the drill:
One hour work equals one hour
pay.
One month’s work equals one
month’s pay.
One year’s work equals one
year’s pay.
Sounds familiar?
The problem with bucket
carrying is that the money stops when the bucket carrying stops. Which means
that the concept if a “secure job” or a “dream job” is an illusion. The
inherent danger of carrying buckets is that the income is temporary instead of
ongoing.
If Bruno woke up one morning
with a stiff back and couldn’t get out of bed, how much money would he earn
that day? Zero!
No work, no money!
The same goes for any
bucket-carrying job. Once the bucket carriers have used up their sick days and
vacation days, if they can’t continue to carry buckets, they won’t continue
to get a paycheck. Period.
Dentist
Can’t Carry Buckets Anymore
Here’s a real-life example.
My previous dentist was the best dentist I’ve ever had. She was a complete
professional – a great chair-side-manner. Great personality. Great technician
–every visit was virtually pain free. Plus, she loved what she did, and she
set her own hours (her office was open only three days a week so she could spend
four-day weekends with her family).
She pulled down more that $
100,000 a year working three days a week in a job she loved. This was a
bucket-carrier’s dream job if there ever was one.
One problem. Before the age of
40, she developed arthritis in her hands and couldn’t work anymore. Today she
teaches at local university earning one-third of the income the earned as a
dentist. Through no fault of her own, her dream job disappeared.
Now do you see why I say
there’s no such a thing as a secure bucket-carrying job? Can you see how
vulnerable bucket carriers are?
The problem with the
Time-for-Money Trap is that if you can’t trade the time, you don’t get the
money!
Pablo the Pipeline Man
recognized the limitations of bucket carrying early on – and he set
out the create a system whereby he could continue to get paid whether he
put in more time or not.
Pablo understood that there’s
no security in bucket carrying. He understood that a pipeline is your lifeline.
What
Would Happen to You if you Couldn’t Put the Time?
What about you – what would
you do if your income stopped tomorrow?
What would happen if you got
laid off?
What would happen if you got
sick or disabled and couldn’t carry those buckets anymore?
What if a medical emergency ate
up your savings?
What if your nest egg
evaporated overnight?
If your income stopped
tomorrow, how long could you pay the mortgage?...make your car payments?...or
pay for your kid’s schooling?
Six months? Three months? Three
weeks?!!!
If disaster strikes, do you
have a lifeline that would protect you and your family? Or are you gambling that
buckets carrying will continue uninterrupted for as long as you need the income?
Whether you push a broom,,,
push paper…or push a profession …, you’re still trading one unit of time
for one unit of money.
Where’s the security in that?
Pipeline
Pay While You Play
As Pablo said, “There must be
a better way!”
Fortunately, there is.
It’s called a pipeline –
ongoing residual income – income that keeps coming in whether you put in the
time or not. The only way to build true security is to do what Pablo did –
build a pipeline while you’re still carrying buckets!
Pipelines are lifelines because
they enable people to escape the Time-for-Money Trap. When you build a pipeline,
you do the work once, but you get paid over and over again.
Pipelines are open 24/7/365.
Which means pipelines can pay you while you sleep. Or while you play. Or while
you’re retired. Or while you’re sick and disabled and can’t work. Or
during emergencies.
That’s the power of residual
income.
That’s why I say your
pipelines are your lifelines!
Lesson
two
We
Live in a Bucket- Carrying World
. “We got a great job, Pablo. I can carry
100 buckets a day. At a penny a bucket, that’s a dollar a day! I’m rich! By
the end of the week, I can buy a new pair of shoes. By the end of the month, a
cow. By the end of six months, I can build a new hut. We have the best job in
town. We have week ends off and two weeks’ paid vacation every year. We’re
set for life! Get out of here with your pipeline.” (From the Parable of the
Pipeline)
A
doctor driving his four-year-old daughter to daycare left his stethoscope on the
car seat. The daughter reached over and started to play with it.
“My
daughter wants to follow in my footsteps,” the doctor thought to himself.
“This is the proudest moment of my life.”
The
child arranged the stethoscope around her neck and held the sensor in front of
her like a microphone.
“Welcome
to McDonald’s. May I take your order?”
This
cute story illustrates why we gravitate the bucket-carrying jobs – it’s
called “monkey see, monkey do.” The little girl had been to McDonald’s so
often that she mistook the stethoscope for a headset and copycatted the way the
employees talked to customers.
Like
the little girl, most people mistake bucket carrying for pipeline building. We
observe that 99% of the people carry buckets. So naturally assume that bucket
carrying is the only way to get what we want in life.
That’s
why Bruno had such a tough time understanding the power of pipelines – Pablo
was the first pipeline builder Bruno
ever knew! Bruno rejected pipelines because they were different. To Bruno,
pipelines were unproven. To Bruno, pipelines were radical and risky.
The
vast majority of people think like Bruno. We grow up surrounded by broke bucket
carriers, so we figure that’s the way of the world. It reminds me of the
bumper sticker I say recently:
100,000
lemmings can’t be wrong!
People
think the same about bucket carrying – 100 million bucket carriers can’t be
wrong! Well, yes, they can.
Buying into Bucket Carrying
Let’s
face it – there are a lot more bucket carriers in this world than there are
pipeline builders.
Why?
Because
bucket carrying is the model that our parents followed and the one they taught
us to follow. The bucket-carrying model tell you that in a bucket-carrying world
, here’s what you have to do to get ahead:
Go
to school and learn how to carry buckets. Work really hard. Earn the right to
carry bigger buckets. Resign from Bucket Company A to work for Bucket Company B,
which lets you carry even bigger buckets. Work longer hours so you can carry
more buckets. Work longer hours so you can carry more buckets. Put the kids
through bucket-carrying college. Change careers from carrying metal buckets…
to carrying plastic buckets… to carrying digital buckets. Dream of the day you
can retire from bucket carrying. Until then, carry those buckets. Carry those
buckets…
What
do all those bucket carriers earn for their efforts?
Surprisingly
little.
According
to Parade magazine’s annual “What People Earn” survey, the average worker
in
Let’s
face it - $ 22,500 take-home pay isn’t enough money to cover the basic needs
for a family of four. Which means the vast majority of people are desperate for
more money!
Buckets on Parade
So
what do bucket carriers to do when they need more money? Because they have a
bucket-carrying mentality, they come up with a bucket-carrying solution. – if
you need more money, you’ve got to carry more buckets!
“I’ll
get a second job carrying buckets in the evenings and weekends,” Daddy Bucket
Carrier says.
“I
can go back to the bucket-carrying job I had before the kids were born,” says
Mommy Bucket Carrier.
“The
kids can get bucket-carrying jobs after school and in the summer.” The
bucket-carrying parents announce.
And
that’s what they do. The result?
Today,
North Americans work the longest hours in the world, even more than the
work-obsessed Japanese. Is the earn-more-money-by-carrying-more-buckets plan
working?
In a
word, “NO!”
Here
are the cold, hard facts:
-
Consumer debt is at a record high. Household debt
in the
-
The proportion of women working to support their families more that doubled over
the past 20 years, from 19% in 1980 to 46% today.
-
More and more people are taking second and third mortgages on their single
biggest asses – their home- to pay bills.
-
Personal bankruptcies have increased every year to 1.4 million in the year 2000
– even though the economy is booming!
Hello-o-o-o!
What’s wrong with this picture?
The Fallacy of Carrying Bigger Buckets
Bucket
carriers reason that bigger buckets mean bigger paychecks. So bucket carriers
tell themselves that everything would be okay if they could just get a job
carrying bigger buckets.
Bucket
carriers are forever wondering how much other bucket carriers earn. The
Assuming
most people get paid for 40 hours a week ( even though they probably work at
least 50 hours a week… or more!) and get two weeks paid vacation each year,
here’s the annual income for five occupations:
1.
Cook
$ 13,083
2.
Retail Salesperson 18,870
3.
Mail carrier
34,091
4.
Lawyer
75,099
5.
Physician
102,024
Now,
if you were a cook… or a retail salesperson… or a mail carrier, you might
look at the annual income of a lawyer or physician and think, “Wow, if I made
that kind of money every year, I’d be financially free! No more lying awake at
night worrying about paying the bills!”
True,
the physician’s bucket is a lot bigger that a cook’s bucket – about 10
times bigger! But that doesn’t mean the physician is financially independent.
He’s just as dependent a\on his bucket carrying job as the cook or the mail
carrier.
Why?
Simple – professionals make more than average worker. But they spend more!
Truth is, the doctors or lawyers making six figures a year are spending most of
their income to support their lavish lifestyles.
…………
People
envy doctors and lawyers and accountants because they get to carry big buckets.
True, the physician’s bucket may be 10 times bigger that the cook’s. But the
physician spends 10 times more, so they both end up in the same predicament –
living paycheck to paycheck!
Buckets Eventually Dry Up
Thomas
J. Stanley and William D. Danko, authors of the bestseller “The Millionaire
Next Door”, observed that carrying big buckets is not the same as creating
wealth. The authors came to this realization by surveying people who lived in
upscale neighborhoods, assuming that people who drove expensive cars and lived
in expensive homes were wealthy.
OOPS!
– wrong assumption! Stanley and Danko came to this startling conclusion about
wealth creation:
“Moat
people have it all wrong about wealth in
How
do you become wealthy? Here, too, most people have it wrong. It is seldom luck
or inheritance or advanced degrees or even intelligence that enables people to
amass fortunes. Wealth is more the result of a lifestyle of hard work,
perseverance, planning, and , most of all, self-discipline.”
In
other words, buckets, no matter how big they are, will eventually dry up.
Pipelines, on the other hand, are self-sustaining. But pipelines require
sacrifice. Pipelines don’t build themselves. Your have to take time and make
effort to build them.
A Bigger Bucket Won’t Solve the Problem
Everybody
would love to increase the size of their bucket. No one’s going to turn down
an annual raise of a better jog with more pay. If bucket carrying is your only
source of income, then I say carry the biggest bucket you can. That’s only
common sense.
But
the fact remains that carrying buckets is never going to make you financially
free. Carrying buckets will never make your family safe and secure – no matter
how big your buckets!
Why?
Because
as long as you carry buckets, you have to show up and do the work in order to
get paid. The day you stop carrying
buckets, that’s the day the money stops coming in ! (Underlined is mine)
Many
a bucket carrier has gone from the “millionaire next door” to the
“bankrupt guy next door” because he neglected to build pipelines while he
was carrying buckets. When his bucket dried up, so did his lifestyle.
“Pipelines
are your lifelines,” my father used to say.
Are
you beginning to see why?
(End
of Part I)