Comment: I read your piece and I enjoyed it. But you miss the point where as we gain experience, Labour compounds in value, and we earn more, making us richer. So, you cannot say that we cannot compound labour to become wealthy.
My Response: This is my catchphrase response: labour weakens and retires as we become older, capital/equity does not. That inherent ability of capital/equity is the most powerful component of its leverageability because unlike labour, it can earn income from generations to generations. In a more zen-like statement, drawing from my junior secondary school courses, labour has diminishing returns while capital/equity enjoys accelerating compounding returns.
So, do not be confused due to the effervescence of promotions which companies reward labour with. Note this: great wealth belongs to capital/equity because labour serves capital when you evaluate factors of production. Simply, with capital, you can purchase labour, and that is why most agile HR organizations call labour a “human capital”.
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Now, to an in- depth response. A few days ago, I addressed this same point. We all begin with what I have called “stamina capital” where our strength and youth will provide leverage at work to earn income as labourers (think of an athlete and what the youth offers). So, the income comes because we have that energy of the youth to deliver value in workplaces.
But as we age, we need to transmute that “stamina capital” to wisdom Capital which then leverages on our experiences to help us earn income as labourers. At that time, it is no more the strength of our youth, but the wisdom of our brain that companies are after. Simply, since banks cannot make a new graduate a CEO, I posit they value experiences as they evaluate who runs the organization.
But looking at the post, there is a diminishing returns on labour and that is the point – and why it rarely makes anyone wealthy unless your job appointment is structured in a way that it has provided equity (ownership) in a company. Equity is equity whether from job, investment, starting, etc. So, provided you have it, you are fine. Why?
Labour expires but capital does not. So, in the factors of production, that capital once it takes ownership remains and does not expire or retire, unless of course restructured. But Labour does fade, and that is why Labour can lose its leverage quickly, and cannot be seen as having inherent organic capacity to compound wealth unlike capital which does not retire/expire, ceteris paribus.
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First, you give up time to earn money, as you advance and get richer, you give up some money for time. Now, if you are also smart enough to give up some money for more and continuous money inflows, you have pretty much settled yourself for life. You give your labour to make money, if you fail to commission your money to keep making money for you, you will still go broke, overtime.