Workers of the world unite! Revolt against your corporate oppressors by engineering your financial independence! Suppress the message of the marketing hegemony! Cast off the chains of servitude with your own financial strength! Begin the Financial Independence Revolution!
OK, OK, I’ll stop with the revolution propaganda messaging…it just seemed so appropriate given today’s little story.
Work Is Your Life
This week I spoke with a large Fortune 500 company about an open position. I curious because their office was near my home. Literally 10 minutes away. I wasn’t looking for work, I just wanted to see what working there was like. After speaking with the HR rep, I was reminded of the sickening work environment that goes for normal in our modern society: The company offered only 2 holidays a year (Christmas and New-Years) and 2 weeks paid-time-off. That’s a total of 12 days a year. 12! Due to the global nature of the enterprise it was expected that a employee would be available all hours of the day, 7 days a week to work online with offices in other time zones and other countries. Ridiculous!
To work in such an environment, work must literally be YOUR LIFE. 97% of your life, as a matter of fact. If your child gets sick (as they frequently do), there goes a PTO day. Want to take a holiday like the Fourth of July or Thanksgiving (common holidays in the United States) with the rest of your family? There goes another PTO day. Before you know it, any significant time away from work (such as travel) is impossible!
Are workers at this company compensated more than usual for this miserly treatment? Nope! Compensation seemed perfectly normal given the nature of the work. How about benefits? They seemed perfectly normal too.
How can a gigantic company (such as the one I spoke with) get away with treating employees this miserable? We let them do it!
The only way this behavior will change is if workers demand better from our corporate masters! Turn down ridiculous working conditions! Turn down wage-slavery!
Oh no…here I go again!
How can a worker turn down ridiculous terms of employment when they NEED money to keep themselves and their families clothed, sheltered, and fed? By building your ability to bargain with the power of financial independence!
Most jobs in the United States are considered “At will” employment. Meaning, there are no contracts involved, you can be fired on the spot with no severance required, and courts will deny claims of loss due to termination. This gives employees little power if there is a dispute with the employer, but it does give the worker one significant advantage: The ability to renegotiate their terms of employment at any time.
A common theme I see among the financially independent is bargaining power with their employer. For example: Take RootOfGood’s wife. She now works from home
4 3 days a week. Fantastic! Mr. 1500? He works from home too! Stupendous! Once you have bargaining power in the form of financial independence, you have a bargaining chip that few individuals in the world get to yield.
Your Blueprint for Escape
Everyone’s situation is different, and no blueprint for escape will look the same for any two individuals. That said, there are a number of common steps I see come up all the time when discussing financial independence. I utilized each of them in my own escape.
1. Build Your Cash Cushion
First and foremost, build a cash cushion. Without this cushion you are stuck in the paycheck to paycheck cycle. One little blip in the income stream and you are screwed. Need a new water-heater or your car needs major repairs? Screwed if you don’t have the cash cushion. Everyone’s cash needs are going to be different, but in our household we shoot for 6 to 12 month‘s expenses in cash.
2. Minimize Expenses for Maximum-Strength Savings
This one is all about building up your savings rate by cutting costs. This has been written about extensively and in-depth many times. The individuals that actually reach financial independence typically have savings rates of 50% or more. Sometimes a lot more. I’m not saying you can’t do it on 25%, but the REAL power comes when you hit 50%. That’s where you cast off the chains of wage slavery: Every year you work, you get one year of your life back. That’s financial strength. How you get there is up to you. Optimize for what’s important in your life.
3. Crush your Debt
If you have consumer debt you need to get that problem solved. Right. Now. Credit card debt is a cancer that will eat away at you day after compounding day. Eventually the debt cancer will KILL YOU…at least financially. If you have consumer debt, ignore everything else I’ve written on this page and go pay-it-off right now. How about a car loan? Same thing. Eventually you’ll have a big loan on something worth a lot less than you paid. Come back when you are rid of that wealth-eating cancer.
The only form of debt that doesn’t need to be crushed into oblivion is low interest debt used to buy assets that appreciate over time. Or, alternately, productive assets that generate positive cash-flow (with inflows greater than cash outflows).
4. Multiple Streams of Income
As we’ve learned in previous episodes, job loss can come at any time. Employer income cannot be counted on to pay the bills, and your job is just one stream of income. A common theme among the financially independent is to have multiple streams of income. That could mean rental houses, online businesses (like Etsy), sometimes it means a second job like teaching piano lessons or dog walking. For others it might be passive income from dividends (from stocks or bonds). It could also mean part ownership in a business. Clearly there are many options. Find ones that work for you.
5. Control The Marketing Message In Your Life
Marketing is everywhere, and hard to truly avoid – but turning off the TV (and it’s marketing) is a significant contributor to financial independence. Not only does it turn off the constant message to SPEND SPEND SPEND, it frees you from unobtainable examples of beauty, wealth, and power that TV employs. TV is just one of the most obvious ones, and it has an off switch. For extra points, turn off the marketing in other parts of your life, if you can. Once it’s off, you’ll have more time for learning, creating, family, and taking the time to save that 50% or more. The things that really matter.
Don’t Worry: The irony of this one is not lost on me. Most blogs and websites are funded by some form of advertising or other. Not to worry…here’s a link: Go purchase something! Purchasing anything from Amazon with that link will help keep this blog running.
6. Learn To Have Fun Without Spending
There seems to be a common fallacy in the Western World: In order to entertain ourselves we must spend money. Every weekend I see my friends out at concerts, shows, bars, movie theaters, and so on. Spending and entertainment seem to go hand-in-hand, right? Wrong! Free entertainment is everywhere! Go to the library and find a good book, volunteer, visit the park, go hiking, play a game with your family and friends, create something! Find friends that don’t require you to spend money to hang-out with. Learning to keep yourself entertained for free (or very little money) is one of my key steps to financial independence.
The Power To Say “No”
That’s it. I used all those steps above and gained financial independence. Those steps are all I needed. There was no special sauce. I know, I know…if you are just beginning on the path to financial freedom it may seem like a lot. Don’t worry. It gets easier with time! If you can gain your financial freedom, you can spend your time how you choose it. It’s worth every penny saved. Tell a employer “No” when his working conditions suck. It feels fantastic. Say “No” to two holidays a year!
Onward Workers! Join the Financial Independence Revolution and take back your life!