Linear Thinking vs Exponential Thinking

One of the most common mistakes people make when they talk about money and wealth related subjects is the connection between time and money. They usually take for granted that to make more money you need to spend more time on your job, business etc. This happens mainly due to either bad social conditioning, lack of knowledge around wealth acquisition methods or more often due to a combination of both.

What is Linear Thinking?

OK, before we understand what linear thinking is let’s first take a look at what “linear” or “linear progression” means in general. According to a popular dictionary, linear means: “extending along a straight or nearly straight line” or to put it simply: “every time we change variable 1 by a percentage X we expect variable Y to change by the same percentage”. Most common example is that when we calculate some hourly rate we tend to think that if we get paid 20$ per hour, since we can work 8, 10 or even 12 hours per day we could get paid 160$, 200$ per day, or even take it one step further to 4000$, 5000$ a month and so on.

Awesome you’d say, that’s good money. I would not argue with that even by the standards of an expensive city. BUT, it’s not really about the actual amount of cash you can make by working for 8 or 12 hours a day, 25 days a month. The problem here is the linear way we tend to think when it comes around money.

linear thinking

I am sure most of us if not all of us grew up in a way that family, friends or society made us think that the right way to do it, is to finish the school, even go to college or have a post-graduate degree and then send out a few hundred CV’s to get a job. Right?

Wrong! Let me say it again. Wrong, although this might be the way most parents, families and children think, it sucks big time because well…you guessed right – it is fucking Linear. It is the way average people think and grow up their children to end up looking for a job or even struggling to make their own one just to break even and have an average life, paycheck to paycheck each month.

Time: Your Most Valuable Resource

Let me tell you ladies and gentlemen, this is not the way exceptional people do it. All someone needs to understand is that time is by far the single most valuable resource we all as human beings have (cyborg prototypes are not fully functional as of this writing). Human beings have certain limitations: Time, energy, willpower etc. Each time you think I need to work more or harder in order to earn more money, you make this fundamental, lethal mistake – your time or energy is infinite and you will never run out of it.

time is money

Well, I have some bad news and some good news here. The bad news is that time is far from infinite, it will certainly end up, and very quickly for that matter. But you my dear friends don’t need to lose your faith. The really good news is that YOU, don’t need to think in a linear way like everybody else out there. Thank God!

What Else There Is Besides Linear Thinking?

Well, besides linear thinking we always have…non-linear thinking. All this infinite wisdom aside, the correct way to think when it comes around money is exponential thinking. Even as young people we really need to think outside of the box or the “line” as we will call it from now on. Just to get my facts straight I am not saying at any point to drop out of school or college and pursue your dreams to become a millionaire. All I am saying is that at early stages of life, formal “linear” education the way we know it is not at all a prerequisite to make a lot of money later, although this can and will be a whole other article on its own.

[bctt tweet=”Time is your most valuable resource”]

On the other hand the “work more to get paid more” mantra is a real killer here. There should not be a single case of anyone that made millions in the whole history of humanity that was working his ass off days and nights in a factory like a slave, or as an accountant behind an office for that matter. Wanna know why?

Because you are not scalable! Yes you heard me right, for good or for worse none of us can’t clone or replicate himself. Even if I work 10 hours a day at 20$ per hour, there is only a certain amount of time I have available during the day. Someone might say here, OK but I could increase my hourly rate. Sure this is an option but realistically there is only a handful of jobs around the globe that can pay huge hourly rates when the individual is not a world class rock star in his or her field.

A More Realistic Approach

All hope is not lost though. It might sound extreme to some of you but it is not that hard really if you take a minute to think about it. Well…it’s not that simple either but let me explain myself. All you need to do is try to take yourself outside the equation of money making process and make actions that have a really big impact. How am I going to do that you might ask?

Well there are countless business models that would allow you to achieve this state, given that at earlier stages of your entrepreneurial journey:

  • More of your involvement is required.
  • Your decisions will have a smaller impact.
  • The return on time investment (ROTI) will be worse.

But despite all these facts, things will start to smooth out as time passes and the systems you build become more efficient. Let me give you an example to illustrate my statements above:

Let’s say for a minute that our beloved friend Robert sells some really nice hot dogs in the street corner for 5$ each, for 8 hours a day. On an good day (he is a hell of a good hot dog salesman) Robert could sell 200 of these delicious hot dogs. That would make him 1000$ in revenue. Even if his costs are only half of that, Robert will go home with 500$ each night or 12.500$ for a whole month as a net profit (let’s assume there are no other expenses for the sake of simplicity).

Now – for some people this might sound good, but let me present another point of view for this same scenario. After some time of busting his balls on the streets, Robert happens to read this article and decides to hire Peter to prepare and sell these 200 juicy sausages each day, paying him 100$ for making these dogs for an 8 hour period.

hot dog

WOW, magic…All of the sudden Robert learned the beautiful process of delegation and managed to partially remove himself from the “selling dogs” equation. Peter is now the one that “sells” his time for money. All Robert needs to do from now on is to manage Peter to sell these delicious dogs. But the real beauty of it, is that now Robert can progress in an exponential rhythm, doubling or tripling his selling stations at a faster pace. After a few months Robert buys a second hot dog car and hires Tobias as his second employee and hot dog seller. He now makes 400$ from each selling station totaling in 800$ per day.

If you really think about it, his income doubled while the work and effort he needs to put in his business should only slightly increase in a worst case scenario. See where I am going with this? After all systems are in place nothing can stop Robert from hiring a 3rd or 4th hot dog station or go even further to hire a supervising manager to organize all this stations, a supply manager to make the corresponding tasks and so on.

At this point Robert now runs a fully automated business, by having himself completely removed out of the equation and only having a supervising role of the overall business from above. Of course, all real life examples are not that simple, but the above situation although oversimplified, is a very realistic scenario that works in countless business models as long as we keep a couple things in mind:

  1. Always be in a position to make actions that have a big impact.
  2. Business should already be profitable, there is no room for delegation or outsourcing when each month your expenses are more than what you earn.
  3. What you do is scalable (as a business).
  4. Completely remove yourself from the equation as soon as possible in order not only for the business to expand – remember, you are not scalable – but also to save your precious time, energy and willpower in order to be able to design and implement other profitable business ventures that will generate more money.

What I would like you to keep from this example is the general principles that definitely apply to a whole lot of other business models and try to incorporate this way of thinking in your mindset as well.


So, to sum up if you really have to keep one thing from this reading is this: Always try to make decisions or actions that will have a big impact on your business, your personal human relationships or whatever. Unless you are in the driver’s seat, no decision or action you are going to make is going to have any significant impact. When your actions do not have a big impact you progress in linear (slow) pace, but remember what we just said, we hate linear progression – always seek exponential growth.

I really hope that this article helped to clear things up a bit, if yes please share it so other people might find it valuable as well and remember always try to stay focused and think in a non-linear way!

Let me know if you can think of other real life examples of linear thinking besides business related issues that affect our everyday lives.