Outline
Two boys, Bruno and Pablo, were given a task to fill the village cistern from a lake nearby. Initially, both of them carried buckets of water from the lake all day to fill the cistern. Bruno thought their fortunate times had come. They were getting 1 dollar a day and it had Bruno thinking about how he would be able to buy a hut at the end of 6 months. So tired after all the hard work, Pablo resisted going to work in the morning and tried to find a way to fill the cistern without having to trade time for money.
He thought of building pipelines! Introducing this idea to Bruno, Pablo was ruled out by the response. So, he decided to work on his own. Half of the day carrying the buckets and the other half building the pipelines while Bruno stuck to carrying buckets. Pablo succeeded after 2 years and the village cistern was abundant with water because of the pipelines. Instead of getting a dollar a day, the pipeline put money in Pablo’s pockets for as long as the water was flowing. He thought of implementing the pipeline system all over the world. What a revolutionary idea!
Introduction
Parable of Pipeline is a book by Burke Hedges who is a successful business strategist and entrepreneur. He has championed the quest for personal financial freedom. The concept of wealth into which money will keep flowing in your pockets whether you work or not is called pipelining. “Pipelines are lifelines.”, Burke’s father says. A very realistic approach to financial independence is explained in the book. What if you had to stop working from tomorrow? If you were laid off? What if you are sick? How long could you survive given that you have bills to pay and you have no pipelines working for you? 6 months? 3 months? 3 weeks!? Hence, pipelines are lifelines.
Review
Most of us are bucket carriers, just the size of our bucket differs. But as soon as the bucket dries up and we can no longer go to fill it, our life will dry up too. So, just like Pablo, we should build pipelines while still being able to carry our buckets. The book emphasizes using leverage, be it money or time. All of us, frankly, aren’t blessed in terms of bank accounts, but in our time accounts we all have 24 hours. It is really necessary to see the bigger picture and lie on the fact that our buckets are going to dry up one day.
The power of compounding, which is, earning interest on your savings and even on the interest that your savings earn, is very underrated. However, for compounding to show its actual explosion, it takes certain years or maybe decades. The author has called this 50-year pipeline, which would give you a peaceful retirement period. But with the dotcom bloom its merely a matter of 2-3 years to achieve financial freedom. This concept of compounding along with internet glory is termed as e-compounding in the book. For a common man, the idea of keeping aside some of his income and investing in stocks or bonds is not unachievable.
The problem with the majority of people is they think why rock the boat if everything is going just fine? According to Hedges, when everything is going fine, it is the right time to start building a pipeline. Waiting for a recession to occur is mere stupidity. Diversification of pipelines, which means investing in start-ups, stocks, bonds, etc. is also advised.
Opinion
Its high time we saw the real picture and deploy our leverage to build a pipeline. We don’t know what tomorrow holds for us. Saving money every month, working a few hours a week to build e-compounding or any regular investment can be our way to avoid, heaven forbid, any miserable condition. I would like to recommend literally everyone out there to take some time and read this book. Now is the time!
“Whether it’s the best of times or the worst of times, it is the only time we got.”
Art Buchwald