Are You Building A Pipeline Or Hauling Buckets?

This is a great parable taken from Robert Kiyosaki's "Cashflow Quadrant."

Are you building a pipeline or hauling buckets?
 
A village in Africa needed water, so they gave 2 people, Bill and Ed, the contract to supply it, reasoning that the competition would keep prices reasonable and the service good. Bill immediately ran out, bought to buckets, and started making the trek to and from the lake, which was a mile away. He started making money immediately, which was great, especially as Ed disappeared from the village. The downside was that he had to get up before everybody else to make sure that the village had the water, and his work was very tiring, as he spent his whole day carrying buckets of water.

Several months later, Ed returned with a construction crew, and built a stainless steel pipe from the lake to the village. Once it was ready, he announced that he would charge 75% less for his water than Bill, that his water would be cleaner than Bill’s, because it would be covered the whole way, and that it would run 24/7, unlike Bill’s, because Bill didn’t work on weekends.

When Bill saw everybody run to the new faucet at the end of Ed’s pipeline, he dropped his prices by 75%, bought covers for his buckets, and employed his sons to work night and weekend shifts. Once his sons had left for college (and inexplicably never returned), he had to hire more workers to cover their costs, and spent his days dealing with accounting and labor issues.

Ed saw the success of his pipeline in this village, and went on to build them in several other villages as well, earning only pennies on every bucket delivered, but delivering millions of buckets a day. He oversees his business from a beach in Hawaii, as the water flows whether he is working or not.

The end.

The moral of the story is obvious: don’t spend your days working for money when you could be designing systems to have money flowing to, and working for you.

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