Are You Hard-Working or Smart-Working?

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FIRECracker is a computer engineer/children’s author, who used to live in one of the most expensive cities in Canada. But instead of drowning in debt to buy a house, she saved and invested instead. What resulted was a 7-figure portfolio, which has allowed her to retire at 31 and travel the world.
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photo credit: Jo Naylor @ Flickr

Back when I had a 9 to 5, my co-workers kept trying to see who could work the longest without dropping dead first.

It was the WORST Olympics ever. Bronze comes with a blood clot. Silver—a trip to the E.R. And Gold? A, big, fat tombstone…with you very own name on it.

And everyone participated, no matter how old you were.

My 26-year-old intern: “Oh I’m so swamped, I wore mismatched shoes into my manager’s office today! Too exhausted to think! Look how HARD WORKING I am.”

Photo credit: irina slutsk @ Flickr, license: CC BY 2.0

My 35-year-old project manager: “I have 3 laptop screens open and I’m on 2 conference calls right now. I haven’t taken a vacation in 3 years! Look how HARD WORKING I am.”

Photo credit: Don Stewart @ Wikipedia, license: CC-BY-SA-3.0-migrated

My 42-year-old boss: “I haven’t gone home for a month. I can’t remember what my daughter looks like, but hey, at least she has all those nice things I bought her. Look how HARD WORKING I am!”

Crying baby

And when I went back to visit them a year after I retired? They were still working the SAME crazy hours, on the SAME project, firefighting the SAME issues, and getting screamed at by the SAME senior executives. And they did all this while accomplishing nothing.

Why was everyone running around like crazy, but getting nothing done?

They were all Hard Working.

They were putting in the MAXIMUM amount of work for MINIMUM gain.

But what they really needed to be was “Smart Working”.

 Smart Working means you put in the MINIMUM amount work for the MAXIMUM gain.

What does this mean?

Smart Working means you put smart systems in place that keeps working even when you aren’t.

Now don’t get me wrong. I’m not saying working hard is for suckers. We all have to work hard at some point in our lives, trading time for dollars, especially early on in our careers. And that’s only natural, since at the beginning of our careers we have our brains, we have our skills, but we have no money. So we gotta do what we gotta do.

But working hard for 30-40 years? Now, that IS for suckers. What if you get sick or bed-ridden and never get to enjoy your retirement? What was the point of it all?

And besides, when you work hard:

Your Company Screws You

It’s no secret that companies LOVE it when their employees work hard. More hours at the grindstone mean more revenues for the company which means more profit for the shareholders! But do the employees get to share in the money they helped make? For the most part, no. You ever try to ask for a raise after a big success? It’s always “We’ll see come year-end,” or “It’ll be reflected in your bonus, we promise!” or “You’re a shoo-in the next time someone’s up for a promotion!” And sometimes you do get rewarded as promised, but more often than not something comes up like a recession or a lost customer, or a bad quarter and then it’s “Yeah, sorry, you did good work but conditions just aren’t right for a promotion right now. We’ll see next year.”

When your company wants something, it’s now Now NOW! But when it’s time for your reward, it’s always later, later later. They do this because they know they can. You need the job. And besides, you’re such a hard worker!

The Bank Screws You

Think the banks are doing you a big favour, lending you cheap money to buy a house? Well, here’s the thing. You’re the one who works hard, putting in all those extra hours, and pouring your blood, sweat, and tears into owning your own little slice of the American/Canadian Dream. Well guess what? They’re not doing you a favour.

They’re doing it because if your house goes up, the bank gets their cut. As much as 25% if you’re not careful! But if it goes down? They still get their cut because your loan doesn’t take a haircut even when your home equity does. You do all the hard work, and the bank always wins no matter what! Who’s doing who a favour now?

Your Government Screws You

If I were an alien looking down from ten thousand feet up (and I’m apparently a really boring alien who likes reading over other planet’s tax codes instead of blowing them up), I’d be wondering why the government hates employees so much. Businesses get so many tax breaks from car allowances to entertainment costs to mortgage interest deductions. Investors get so many tax breaks that this year we’re projecting our tax bill to be less than $300 despite making over $50k in dividends and unrealized capital gains. But employees? They get hit with the maximum tax bill and, with a few exceptions that each and every reader should be using to their full capacity, there’s not a whole lot they can do about it.

Working Hard Sucks

There’s a recurring theme here, by the way. In all three cases, the Hard Working Joe is getting taken advantage of because the Company, the Bank, and the Government know they don’t have any other choice. Any rational person would tell these bozos to take their deal and shove it, but they can’t because they need the money.

Working Smart is WAY Better

The key here is that when you don’t have money, it can be used against you. But when you have it, nobody can make you do anything anymore. Money is power. Which is why I get so frustrated when people don’t pay attention to where their money goes, or gives it away to scheming assholes in exchange for shiny rocks or useless leather bags. Why would you do that? You’re giving away your power!

Because when you have enough of it, you can build a portfolio that generates passive income, even when you’re not working. Passive income keeps paying you even when you’re sleeping, sitting on a beach, or jet setting around the world. And sure, it takes years to build this income-generating machine, but once it’s done, it keeps going. Forever and ever, without needing to constantly feed it.

And once you have this, you can work smart. You can choose where to put your hours rather than have them dictated to you by some Manager who’s just worried about looking bad to his superiors. You can devote your time to causes you actually care about rather than whoever pays the bills. And the rest of the day? You can do whatever you like!

Like, say, hiking the Santorini cliffs:



Driving an ATV around and visiting red-sanded beaches.



And watching the sunset from my balcony, over looking the Aegean sea:



The Boomers are always touting the value of Hard Work. But when all you’re doing is Hard Work but accomplishing less than Smart Work, it’s time to make a change.

Stress is not a badge of honour people! It’s a sign that you’re not doing something right.

Stop trading hours for dollars, stop giving all your hardworking money to taxes, and stop being so Hard-Working! Be Smart-Working instead!


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32 thoughts on “Are You Hard-Working or Smart-Working?”

  1. “And sure, it takes years to build this income-generating machine, but once it’s done, it keeps going. Forever and ever, without needing to constantly feed it.”

    Made me think of a fusion reaction, though I suppose that needs the fuel of hydrogen, but this needs the fuel of money.

  2. IT solving the same problems, on the same project, a year later? Luv it.

    It’s the damn client’s fault right?


    1. It’s the developer’s fault! It’s ALWAYS the developer’s fault :).

      Like they say:

      “A customer walks into a bar. He asks for a beer made out of wine. The project manager agrees. Both question the bartender’s competence.”

  3. Amen Firecracker. I’m working on getting that perpetual motion machine going too!

    One of the reasons I had to leave biglaw was because of the heavy pressure of billable hours.

    It literally promotes “hard working” and punishes you for “smart working.” (i.e. if you work smart and only bill 4 hours, you screwed up because now you’ve got to find a way to bill 4 more hours or else get yelled at by a partner for not billing enough – better to work “hard” and bill 8 hours to avoid getting yelled at).

    1. “perpetual motion machine”. Great choice of words!

      yeah, I heard biglaw was super stressful. Very idiotic that they would care about how many hours you work versus your results. I guess that’s what they have to present to the Bigwigs. *eye roll*

  4. This is a complex one. The people in the examples you mention definitely work long, but not necessarily hard. As I see constant overtime can be a result of two things: a not capable employee who can’t finish the work on time, or a not capable employer who can’t manage the team for the job. The intern must mix things up at work too, the project manager is effectively at none of those 2 conference calls (especially if he has a man brain like I do 🙂 ), and the boss is more than likely escaping from home for whatever reason. I wouldn’t call them hard working.
    If you’re an employee, you should be hard (and not long) working. Being there is your choice, so make the best out of it. Especially if you’re smart and the money you get for it takes you closer to financial independence. Being an employee is a safe choice (or let’s say a conservative investment of your time 🙂 ). Retiring early after having sufficient passive income is also a safe choice. You can choose to invest your time in a more risky way. Like the bike mechanic from Amsterdam I read about in this blog. He made it, some don’t. They are the entrepreneurs. If you’re an employee, you get your salary because sometimes in the past someone had the balls to take the risk and start a business. Try to respect it a bit while you work and get your salary for it. And then use that salary wisely to build up your own dreams. Like retiring early 🙂

    1. I wouldn’t say they are incapable…one of the reasons why they had to stay so late is because of stupid corporate bureaucracy, forcing them to jump through hoops. Corporate politics is a complex thing and not something you have control over. Sometimes you end up working long hours without getting anything done and this problem worsens the bigger the company gets.

      That’s why it’s good to have FU money so you can leave.

      1. Corporate politics can be a nightmare. Had I known the hell I was walking into at my last job I never would have started.

        But, in a way I have them to thank for my living an amazing 2 years abroad on our sailboat. The conservative guy in me probably would have postponed the trip until I was fully FI.

        Now I’ve learned I’m closer than I would have imagined to FI and have a better vision of what I would like real retirement to look like.

        Office politics aside, somewhere along the way our society has lost it’s path. What ever happened to 9-5? Or the option to have a single family income that didn’t mean watching every penny? But hey, more workers = bigger GDP implying bigger GDP/capita and therefore better standard of living right?

        1. I completely agree with you. It’s no longer 9-5. It’s more like 9 to 8, 9 to 11, plus weekends. Now that we have internet, we’re expected to work around the clock. There is no respect at all for personal and family time.

          You can’t control how hard a company will squeeze you, but you CAN control how much FU money you have. When you have that kind of power, you can walk away anytime you want! It’s so liberating!

    2. Sorry my man, but respect is not part of the contract.

      Unreasonable deadlines are set and I get squeezed for more results and then get no raise or promotion from it: that’s no respect. I get a “raise” that barely covers CPI inflation: that’s no raise, and suggesting it is disrespectful.

      Respect has to be earned. The boss gets some to start because of the job, but most of it gets squandered quite fast in big organisations.

  5. It’s better to have the FU money as a peace of mind. One can be rest assured that he/she will not be held to ransom by the employer who demand the maximum reward for the remuneration to him/her. He/She will have the option to leave such employer if the situation becomes unbearable.

    If one has a great employer who advocates work-life balance, this is the best possible occasion. However, such good circumstance is hard to come. Even such circumstance exists, no one can guarantee this will last till one reaches the official retirement age.

    With the FU money and one has no desire to retire early, he/she can switch to another employer without worries and can quit without hesistion if the going becomes bad for his/her self being.

    1. Well said! The key is becoming financially independent. Whether you choose to work or not, having FU money gives you that choice.

      1. The path to FI is owning and running your own shop, right?

        Just like Garth and his invetment boutique.

        How do we get there?

        1. Well, you don’t have to own your own shop to become FI. We did it by working for the man.

          Garth seems to be pretty good at being an entrepreneur though. Maybe you can ask him for advice?

  6. First of all, I’m a huge fan. You’re my new favourite FIRE bloggers.
    Secondly, I’m wondering if ethnic families are especially prone to this trap. All our lives, we’ve been told to work harder. Grow up, get a job, and your bosses and colleagues are all exhorting you to work harder. So you work until you literally die (karōshi (過労死)/gwarosa (과로사)).
    I read a book on twins that said normal people have to separate once, from their parents. Twins have to separate once from their parents and a second time from each other.
    To retire early, we–okay, I–have to separate first from our parents, then from our work, and then from our culture. Working on it.

    1. definitely, cultural ideals and values play a big role. Must be open-minded, willing to try new things, and live outside of prescribed comfort zones. Define your own culture! that’s essentially what these blogger are doing. Whatever we implement can be some variant or combination of what we observe

    2. Awwww. Thanks, Melissa! 🙂

      It’s pretty scary that our culture has a word for “worked to death”. Working hard to accomplish a goal is great, but working hard for the sake of working hard? That makes NO sense.

      I’m very grateful to my culture and my parents for teaching me the value of hard work. After all, if I hadn’t been loyal to my company and worked hard all those years, I would never have gotten to where I am today. But now that I’ve reached my goal, it’s enough.

      What really surprised me is that I now accomplish more in a mere 2-3 hours than I used to during a whole 9 hours at work! I didn’t realize how much time I ended up wasting on bureaucracy, meetings, etc, things I have no control over. Wanderer and I ended up building an entire APP for a non-profit in 6 months while traveling the world. That’s 1/2 of the amount of time it took to finish 1 project at work.

      Once you realize that you need to work towards a goal instead of working hard for the sake of working hard, it makes all the difference 🙂

  7. You hit the nail… of the big consulting firms taught me this lesson a few years ago…went contract after that….never worked a weekend…never work after 5..get paid twice as much…never need to beg for a bonus… because usually the next contract is a higher rate due to increased experience…if the manager yells…I just think of the invoice I’ll send at the end of the week….plus I know I won’t have to deal with him more than a few months ……if I need to work overtime..sure…I get paid by the hour….and take vacations more than ever between contracts while I interview over the phone for the next one…..I still don’t get why ppl work full-time…you get shafted from every angle!!… as for security right now hardworking full time people are being punted where I work right now..while they extended my contract….which works for me both ways…I also own stocks via an etf of this place!

    1. Being a contractor has a huge advantages, especially since job stability isn’t what it use to be. People end up having this “illusion” that full-time work is safe. It really isn’t. For every 1 year you work as a contractor, you have to work 3 years as a full-time employee. And that’s not counting the taxes you save by sheltering the money in your corporation.

      That being said, for people who don’t interview well or network well, contracting may not be appropriate for them. You have to be good enough that you can hop contracts easily and be hired frequently. If you don’t keep your skills up, it would be very difficult.

  8. This is one area where we probably differ a bit. We don’t need to hate our job after getting FIREd. This ‘perpetual motion machine’ would break down if the companies stopped continually looking to increasing their profits and continually squeezing more productivity from workers. As investors, we want that but it’s not cool for us to experience it as employee. See the irony here? Even if we are FIREd, we are all still dependent on the corporate world. See here why:

    1. I’ve been on both sides of the equation. Employee and shareholder. I must say, being a shareholder is SO much better 🙂

      I also don’t think “squeezing your employees” results in higher productivity. Just look at the Germans versus the Americans. Germans get WAY more vacation time, less overtime, and are just as productive. They end up accomplishing more while working less. The whole “must be here from 9 – 5” idea is antiquated. How much of that time is wasted in meetings, filling out paper work, chatting with coworkers, travelling to/from work? That actually costs the company and shareholders more money. After I quit, I managed to code an entire app for a non-profit with my hubby in 6 months. At my old job, we used to take an entire year to accomplish 1/2 as much.

      As for the whole idea that too many people will become FI and cause the “perpetual motion machine” to break down? Very unlikely. Just look at how many people are willing to lock themselves up in their corporate prisons for decades to pay off their massive mortgages? They will happily continue to work, ensuring our PMM machine will continue to run. So I guess I must extend a HUGE thanks to all those guys! Please continue doing what you’re doing and helping the rest of us.

      1. I never said too many people will reach FI. That’s both macro-economically and realistically impossible – the ownership class will remain much smaller than the labor class. So, your PMM maybe fine. I am part of both so I can see the argument – you may recall my earlier comment in another article that for me FI is mandatory, RE is optional. But I do wonder at the irony of depending on growing corporate profits to finance early retirement which cannot happen without increasing labor productivity. Shareholder expectations require every company to squeeze the maximum productivity out of employees. Germany’s productivity is a fascinating case with many critical points to compare, far too much detail there to capture in a comment than just headline news. The irony is still valid.

        1. I see what you are saying. Yes, from that perspective, it’s somewhat ironic 🙂

          Have you ever watched Micheal Moore’s “Where to Invade Next?” He does a good job comparing productivity of Germany versus the US. Hm…now I’m getting a idea for a future article! This is why I love productive blogging discussions 🙂

  9. This is random, but anytime I read anything about real estate being ‘awesome!’ I think of you guys. Since you are so good at breaking down the numbers, I really don’t understand how this is affordable, but the way the article is written makes it seem like it was no big deal to spend almost $700,000 to move neighbourhoods, especially when it is emphasised that they had no inheritence and pretty normal jobs. Would love your thoughts on it if you ever do another post on breaking down house buying numbers and return on investment!

    1. I think this is based on the assumption that the price of the house will appreciate in future. The price appreciation will surpass all cost incurred by the owner towards the house. I do no think that it is the case.

      1. Yup, agree Ben. It’s so EASY to “make $267K” if you ignore all ownership costs. Who wants to do math when they’re too busy celebrating with champagne? Besides, math is hard! WAHHH WAHHH!

    2. I like this article because it illustrates exactly what we were saying:

      1) Real-estate requires you to time the market

      2) People tend to ignore cost of ownership and just take the selling price minus buying price :’$267,000: Amount the Kellys’ made on their Leslieville home”….are you kidding me? What about interest on the loan, real-estate agent fees, maintenance, renovations, property taxes, land transfer tax…NONE of these were subtracted off the gain. That is NOT how math works!

      3) After making some money (and we have NO IDEA how much they actually made since they just ignored all costs of ownership), they immediate went a bought a MORE expensive home. So essentially, they’ve gained nothing except more debt.

      4) “the couple still admits they underestimated some of the mental strain such a big project could have on their family.
      “It’s hard on the marriage; not so much that you’re butting heads on decisions, it was the hemorrhaging of money,” Heidi says. “You’re not focused on one another and your relationship. Your entire life is focused on this renovation.”
      – Why do people do this to themselves? WHY?

  10. Hi! I love this article and I really want to work smart. But how can I do that? I mean what does “working on a portfolio that generates money for you” mean? I’m sorry for sounding so naive but what kins of portfolio is that? Is that mutual bonds? Or buying stocks? Please enlighten me. I’m so inspired with your philosophy in life. Thank you! 🙂

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