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Is Passion Killing Your Paycheck? Scott Galloway’s Formula for Real Wealth
Forget passion—focus on talent. Discover Scott Galloway’s “Algebra of Wealth” and learn how Stoicism, strategic job hopping, and compounding can secure your financial future. Ready to stop worrying about money and start building a life of freedom? Scroll down to unlock Galloway’s tactical steps for increasing your earnings today.
“Wealth gives us the freedom to spend time doing wonderful things with the people closest to us, so we can expand and really soak in those relationships.” – Scott Galloway
It’s hard to be present and loving when we lack economic security and constantly worry about money. Stats show that divorce rates are highest among low-income Americans. Therefore, the question becomes: What can we do to build wealth and achieve economic security so that we can spend more time and be fully present with the people we love? Here’s a high-level summary:
- Increase earning power by leveraging our strengths.
- Spend far less than we earn.
- Invest early and often to let compounding work its magic. Even if that means investing just $100 a month initially ($100 a month invested in the S&P 500 with a 10% annual return would give you almost a quarter million dollars in 30 years).
- Diversify investments across stocks, bonds, real estate, and other assets to reduce overall risk while maintaining a sufficient annual return.
Do these four things, and eventually, your assets will generate enough passive income for you to live on, so you aren’t constantly worried about money! So, let’s go deep and get tactical on the first two parts of the wealth formula: earning and saving.
1st Step to Higher Earnings: Focus on Talent, Not Passion
The problem with making passion your primary focus is that you tend to disengage when work gets tough—precisely when you should be leaning in and discovering your talents. When you frequently disengage because you don’t feel passionate about what you do, your career stalls, and so does your earnings growth. So, forget passion and make talent your sole focus. Think back over the last six months of work and answer two questions:
- What seems to come easier to me than to the people I work with?
- What am I willing to do that others are not?
These questions reveal your talents. Once you know your talents, volunteer for new assignments or roles that will leverage and allow you to develop your talents further. The more you develop your talents, the more remarkable you become—and the more and more passionate you are about your work.
2nd Step to Higher Earnings: Stick to a Regimented Exercise Routine
Oddly enough, one of the most important financial tips Galloway offers is to exercise. It’s not just about physical health—exercise is a performance enhancer. Science shows that exercise helps you focus longer, learn faster, and maintain energy to tackle tough tasks. When you exercise, you develop the mindset necessary to succeed in a tough career. Much like a workout, you may not enjoy starting a difficult task, but as you push through, it feels good—and by the end, you’re glad you did it.
3rd Step to Higher Earnings: Always Know Your Worth
The unfortunate truth about working in a company is that the longer you stay, the less your salary increases. The fastest way to increase your salary is to switch jobs frequently. As of March 2023, employees who changed jobs saw an average wage increase of 7.7%, while those who stayed put only received a 5.7% bump. However, you don’t need to frequently switch jobs to earn more—if you show your talents to competitors and bring job offers back to your current employer. Scott Galloway routinely interviewed at other universities and brought job offers to his employer, NYU, and said, “This is what I’m worth. I’d like to stay, but I ask that you match it.” They always did.
Spend Less by Practicing the 4 Stoic Virtues
In a world of endless temptation, self-control is paramount to saving and investing. That’s where the ancient philosophy of Stoicism comes in. Stoicism shifts your focus from craving more stuff and impressing others, to building an impressive character by consistently displaying four virtues: courage, wisdom, justice, and temperance.
- Courage is having the strength to not go with the crowd and buy things just to fit in.
- Wisdom is recognizing that while you can’t always control your urges, you can control your actions. It’s also realizing that buying something you really want won’t give you the satisfaction you expect (you’ll keep wanting more and more).
- Justice is doing what’s right, which often means not wasting money so you can give your future self and loved ones a better life.
- Temperance is having the self-control not to splurge while shopping or eating out.
Practicing these Stoic virtues strengthens your character. And in the end, people care far more about your character than your car, clothes, or other material possessions. Therefore, when you feel the urge to spend, ask yourself: “How can I practice the four Stoic virtues and build an impressive character?”