The 5 Essential Factors for Financial Freedom: Part 3 – Equity
Most people think building wealth is about earning a high income or saving diligently, but that’s not the whole picture. If you’re just earning money and saving it, you’ll always be trading time for money, which means your wealth is limited by the hours you can work. That’s why the third essential factor for financial freedom is Equity—and it’s non-negotiable if you want to build long-term wealth.
Equity isn’t just about owning stocks or having a stake in a startup. It’s about owning a piece of the system that continues to work and grow even when you’re not there. If you don’t own a piece of the business that you work in, you’re always at risk. You could be the hardest worker, the top performer, or the most dedicated employee, but at the end of the day, you don’t own the upside. You’re trading your time for money, and once you stop working, the money stops too.
The only way to break this cycle is to own a piece of the system. When you own equity, you’re not just working for a paycheck—you’re building an asset that grows over time and continues to provide income, even when you’re not actively involved. That’s the difference between working a job and building wealth.
Why Most People Avoid Pursuing Equity
The reality is, 95% of people will never pursue equity because they’re stuck on the left side of The Four Quadrants of Income—Employed or Self-Employed. In both of these categories, you don’t own anything except your time. Whether you’re working for someone else or running your own small business, you’re still trading hours for dollars.
If you’re employed at a company, it’s extremely difficult to own a piece of the business. Most jobs don’t offer equity unless you’re in executive leadership or senior management, which means the vast majority of people are working to build someone else’s wealth. Even if you’re self-employed, like owning a mom-and-pop store, you’re not truly building equity—you just own your job. Your income is dependent on your time and effort, and the moment you stop working, the money stops too.
Equity isn’t just about ownership—it’s about owning a system that works for you. When you own a system, it can grow and adapt over time, just like an investment in the stock market or real estate. Unlike trading time for money, a system can become more profitable and valuable as you improve it, automate it, and scale it.
Why Owning a System Changes Everything
Think about it—time is finite. Every person on the planet has the same 24 hours in a day. But a system isn’t limited by time. It’s scalable, which means you can duplicate your efforts, optimize your processes, and reach more people without trading more of your own hours.
That’s why owning equity in a system is so powerful. It’s an asset that grows with innovation, efficiency, and compounding value, not just with more work hours. When you own a system, you’re not just earning income—you’re building wealth that scales.
My Systems of Equity
For me, this principle came to life when I built my Master Finance Agency. I own 100% of this business, and it’s structured as a complete system with teams, agents, and partnerships that all contribute to the growth of the agency. I’ve built automated training platforms, AI systems, and marketing systems that duplicate my success and empower my team to grow the agency even when I’m not directly involved.
Similarly, my YouTube business operates as a system. I’ve built a team that handles marketing, video editing, community management, and more. The videos I upload today continue to generate views and revenue for years to come, creating an evergreen system that grows without my constant input. Every time I publish a new video, it boosts the entire system, including old content that continues to bring in new viewers and revenue.
These systems are assets that I own—and they grow in value over time. That’s the power of equity.
How to Start Building Equity – Naval Ravikant’s Principles
If you’re wondering how to start building equity, the answer is to create or buy assets that scale without your constant input. Naval Ravikant, in The Almanack of Naval Ravikant, explains that wealth is created by owning equity in products, systems, or intellectual property. Here’s how to get started:
Build Products That Scale Indefinitely – Create digital products like courses, books, apps, or media that can be sold infinitely without additional cost. This allows you to earn nonlinearly, leveraging work you did once into ongoing income.
Leverage Infinite Distribution Channels – Use platforms like YouTube, Amazon, and digital marketplaces to distribute your products at scale. These platforms offer infinite leverage, allowing you to reach millions without increasing your workload.
Own Intellectual Property – Whether it’s a brand, patent, or audience, intellectual property compounds in value. Building a personal brand is one of the best ways to own equity that grows over time.
Partner Strategically – If you can’t build a product alone, partner with someone who can. Combining specific knowledge with leverage allows you to create systems that grow and scale efficiently.
Invest in Equity, Not Salary – Whenever possible, choose equity over cash payments. This is how you maximize upside and benefit from the long-term success of a business.
Create and Own Systems – Build systems that operate independently of your time. These systems work for you around the clock, creating passive income and allowing you to earn while you sleep.
What’s Next? Leverage
Equity allows you to build wealth that grows on its own—but it’s not enough by itself. The next factor is Leverage—the secret to multiplying your efforts and scaling your income without increasing your workload.
In the next part of this series, we’ll break down the three types of leverage and how to use them to 10x your wealth.
For more insights and practical strategies, visit ReforgedHQ.com, where you'll find additional resources, training, and tools to accelerate your journey to financial independence.
