Wealth comes from SYSTEMS!

People often say "work smart, don't work hard."

That's true, but for people who are seriously seeking success and/or financial freedom, it's important to get a little bit more technical.

What does "working smart" really mean? If someone is not working "smart," does it mean he's stupid? If he is NOT stupid, how come someone advised him to "work smart"? Does that mean he could be smart, but he's working in a stupid way?

Hmm, this is all very confusing.

Here's an elegant acronym that will save the day and clarify things for us: S.Y.S.T.E.M.

It stands for "Save Your Self Time, Energy, Money."

So what is a "system"? Essentially, it's something complex that works automatically.

Think of your digestive system. The minute you put food in your mouth, chew it and swallow it, your digestive system gets to work immediately. It knows PRECISELY what to do in order to break down the nutrients from the ingested food and convert it into energy for your body.

On the other hand, a "job" is NOT something that works automatically. It requires your attention, 9 to 5, five days a week. In a way, a job is a broken system since it requires your attention to "repair" it constantly. (Notice that your stomach rarely requires your conscious attention. You could just eat something and take a nap on a beach, and your stomach (or your digestive system, at the higher level) will work flawlessly for you.

So if a "job" is a "broken system," why are university graduates so eager to get one after graduation?

Simple answer: They need the money. To buy stuff. To spend happily. To sustain a decent social life. And, of course, to buy gifts for the girlfriend!

Once a person embarks on that path, where he/she gets used to the idea that a job is something that is needed, and that everybody's got to have one, then such a person is getting further and further from financial freedom.

Why? Because wealth comes from systems, and as we discussed earlier, a job is a "broken" system.

In short, WORK DOES NOT WORK. (Hey, this sounds really catchy, maybe I should write a book with that catchy title!).

Larry King (CNN): So, Peter, you recently came out with this provocative book titled "Work does not work!" That's a pretty controversial statement and, some critics have argued, a little irresponsible. Can you explain your theory?

Peter: Well, thanks for having me. What I mean is, have you ever known an employee who worked for a salary and got rich? It's impossible. His salary is part of a company's expenses, and so it must remain fixed. Meanwhile, the company's revenues are increasing. The growing difference between the two is called the "profit rate." That is why the rich get richer and the poor (or the salaried folks) get poorer.

Larry King: So "work does not work" because..?

Peter: Because it does not enrich workers.

Larry King: But workers are not taking risks. The business owners are the ones taking risks. So it's normal that they reap greater rewards.

Peter: It's true that business owners are taking risks with their financial capital, which they use to invest in buying equipment, assets and capital in order to create value and generate a satisfactory return on their invested financial capital. BUT... employees are the ones who are investing their human capital. Human capital -- especially talent -- is becoming more and more important than financial capital.

Larry King: Okay, I get what you're saying, but what choice do employees have? The employment system is structured in a way that gives power to business owners or shareholders because legally, they own the means of production without which value cannot be created.

Peter: Employees, especially the talented and experienced ones, can create systems that replace the employer, and so they can set up a business by themselves.

Larry King: What do you mean by "system"?

Peter: Well, as I wrote a few paragraphs earlier, a system is something that works automatically. Youtube is an example, so is Ning, the Internet company that allows people to create their own social networks online. AsSense, by Google, is another example.

Larry King: Ok, we'll take a commercial break and then we'll continue this interview with Peter Nguyen, best-selling author of Work Does Not Work, a highly controversial book that is sparking heated debate and discussions in boardrooms and classrooms throughout the nation.

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I hope that flight of fancy was as good for you as it was for me! :-)

I will write more about wealth creation systems.