How I Plan to Fast Track My Path to Financial Freedom In 2021

Focusing on my “hourly-take-home-pay”

Ben Le Fort
Jan 4 · 6 min read
Image for post
Image for post
Designed by Freepik

Most of my writing inspiration comes from what I am focused on and excited by in my own financial life.

  • In 2018, when I first started writing about personal finance, I was very focused on paying off debt and investing in low-cost index funds.
  • In 2019, when my debt was gone, and my income kept steadily increasing, I turned my focus to the Financial Independence, Retire Early (FIRE) movement. For the first time in my life, I could actually see a realistic road map to financial independence.
  • In 2020, I wrote a lot about side hustles and “scalable income.” I spent a tremendous amount of time and effort into growing my side hustle into a side business.

All of these are important subjects, not only for myself but for the readers of Making of a Millionaire. So rest assured, I will continue to write about these crucial topics. These are also topics I dive into in great detail in The Financial Mentor Program.

That being said, the subject I am most excited about heading into 2021 is increasing my “hourly-take-home-pay.

This article reviews why maximizing hourly-take-home-pay is the fastest way to financial freedom and how I plan on increasing it in 2021.

Hourly-take-home-pay is a simple concept; it refers to how much money you clear after taxes and deductions for every hour you work.

Here is how to calculate it in 2 simple steps.

  • Add up your total monthly take-home pay (your gross income minus taxes and other deductions.)
  • Divide it by the number of hours you worked that month.

If you clear $5,000 per month and worked 160 hours that month, your hourly-take-home-pay would be $31.25 per hour.

Put simply; it’s the most efficient way to obtain financial freedom. That becomes clear when we think about the three possible ways we increase our hourly-take-home-pay.

  1. Work fewer hours while maintaining the same income.
  2. Work the same number of hours, while increasing our income.
  3. Increasing the number of hours we work while our income rises at a faster rate.

Honestly, you can sign me up for any of these options, particularly the first two.

Life is a constant trade off between the two most important assets in life; time and money. The fewer hours of our life we need to trade in for money, the more time we have to do what we love most in life, with whom we love most.

Here are the three ways in which I plan on maximizing my earnings per hour of work this coming year.

  1. A marginal raise at work while working the same number of hours.

2. Continuing to scale my side-business while working the same or fewer hours as I did in 2020.

3. Investing more, which increases the income generated from my portfolio.

Having a 9–5 job provides a fantastic “base” to grow my earnings per hour. Each year, I receive a cost of living increase plus a modest raise based on performance.

I am lucky enough that my 9–5 job provides me more than enough to cover all of my needs and wants. But, the increase in hourly-take-home-pay in a given year is very slow.

There are two reasons for this.

  1. Inflation: the cost of living increase does not cover even 2% annual inflation. After accounting for inflation, the annual salary increases are quite modest, as is the case for most employees everywhere.
  2. Employment income is not tax-efficient: Between income taxes, payroll taxes, and other deductions for insurance and pension contributions, I keep less than 40 cents of every additional dollar I make.

Add those two factors together, and you can see why it’s not easy to increase hourly-take-home-pay as an employee.

That is why I started a side business with scalable income. Scalable income simply means that I am not guaranteed to make a dime, but there is also no limit on the amount of money I can earn.

In 2020, I spent a ton of time building my scalable side business. Even though I earned a lot more money in 2020 than I did in 2019, I also worked a lot more hours.

  • I had to incorporate my business.
  • Find an accountant.
  • Create my products (in this case, online courses, books, and articles.)
  • Figure out how to get started with email marketing.
  • Figure out how to edit videos.
  • Create a bunch of custom spreadsheets that would solve complex financial problems for students who enroll in my courses.
  • Building sales pages.

Just to name a few of the things I had to do to get my business moving. With all that upfront work, it meant that in 2020, my side business did not increase my hourly-take-home-pay by very much. The increase in income was offset by the number of new hours worked.

However, now that all of the upfront work of starting and scaling my side-business is done, I have two options.

  1. Modestly increase my income while working fewer hours.
  2. Dramatically increase my income while working the same number of hours.

Given the ambitious (work-acholic) person I am, I will be opting for option two. If I put in the same number of hours I did in 2020, I believe I can build on past success and more than double the income generated from my side business this year.

Since I incorporated this business, I will pay a lot less in taxes than if I made the same amount of money through my 9–5 job.

I live in Canada, and in my province, incorporated small businesses only need to pay a 12.2% tax rate on the first $500,000 of income.

Compare that to only hanging onto about 40% of every additional dollar I make from my day job, and you can see why continuing to scale my side business is so exciting and the fastest way to increase my hourly-take-home-pay.

As I have written in the past, there is only one form of passive income, by which I mean income you do not have to work for at all, and that is income generated from investments.

  • Dividends or capital gains from stocks.
  • Interest earned from bonds.
  • Rent collected from real estate.

Unless you inherited a large sum of money, the only way to generate passive income is to focus on increasing your income, keeping your expenses constant, and investing the difference.

I am fond of saying that passive income cannot exist without active income and good financial habits.

Even though my hourly-take-home-pay did not increase by very much in 2020, my income did. Since I kept my expenses constant, that meant I had a lot more money to invest. That means that the passive income generated from my portfolio will be significantly higher in 2021 than it was in 2020.

All of the hard work of launching a profitable side hustle in 2020 is quite literally paying dividends.

A giant leap towards financial freedom

I have developed a simple definition of financial freedom; You have achieved financial freedom when you can spend your days doing work that you love without worrying about how you will pay the bills.

I love my side business and would be happy to one day make it my life’s work. If I can continue scaling the business this year at the same rate I did in 2020; financial freedom will be within my grasp. Something I never thought I would be able to say even a few short years ago.

You can keep up to date with my work by following me on Medium and subscribing to my podcast.

This article is for informational and entertainment purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.

Making of a Millionaire

Stories about money, personal finance and the path to…

Sign up for Making of a Millionaire Weekly Newsletter

By Making of a Millionaire

The top personal finance stories of the past week  Take a look.

By signing up, you will create a Medium account if you don’t already have one. Review our Privacy Policy for more information about our privacy practices.

Check your inbox
Medium sent you an email at to complete your subscription.

Ben Le Fort

Written by

Sharing personal finance lessons I’ve learned on my journey from debt to Financial Independence. Join my weekly newsletter here: https://bit.ly/3oQESwh

Making of a Millionaire

Stories about money, personal finance and the path to financial independence.

Ben Le Fort

Written by

Sharing personal finance lessons I’ve learned on my journey from debt to Financial Independence. Join my weekly newsletter here: https://bit.ly/3oQESwh

Making of a Millionaire

Stories about money, personal finance and the path to financial independence.

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store