The In-Debt-ured Servant

I started working when I was 15 years old, back in 1996. I was a janitor for an office between freshman and sophomore year for that summer. I then worked for McDonald’s until I left for Marine Corps boot camp in 1999.

Thus, I have been in the workforce for 25 years, with the Marines close to 23 of those. I am proud that I worked hard at every job that the Marines assigned me. I lived all over the world and performed all manner of tasks and assignments.

I have led some of the finest men the Marine Corps had to offer—being led by some of the best Officers in the inventory. However, here is the truth about the workforce—it’s all a lie.

The Business of Being Busy

This is not directed to the military or the Marine Corps but the entire workforce. Everything they tell you about “working hard, having dedication, and being passionate” all withhold one single truth—it doesn’t matter. If you don’t have financial education, you’re screwed.

Small Debt. It starts with a small purchase, usually on a low-limit credit card or personal loan. It may be a television or video game system. You say, “I have a steady paycheck, so I can afford to splurge.” 

Now, when payday comes, you have to pay a portion of your income to your debt. You don’t look at the amount of interest; you just need to afford the payments. 

Now, you think, “Man, if I get that promotion, I will have a little more money in my pocket. What do I have to do to get that promotion?” The military is straightforward with promotions, but most civilian jobs are not. You may have to transition to another position to get a pay raise. 

Medium Debt. After you work a while, it’s time to make yourself comfortable. You have proven to be a hard worker, with promotions coming easily. What’s next on the list of things to buy? A car!

The Fast Track to Wealth

Of course, why not make yourself more comfortable while being stylish simultaneously? As I wrote in the article “3 Steps to Live on Passive Income,” buying a liability with liability is the worst possible position we can put ourselves in when starting to live independently. 

No matter, now we have a car loan, insurance, registration, maintenance, and gas. We start to look forward to our paychecks more because our cash flow drys up sooner.

Large Debt. Still, you keep working, getting promoted, and hanging out with friends. You find someone you think you can marry and propose the question. “I do!” the person says, and you are off to start planning the wedding.

But, it can’t just be any wedding. It has to be “The Wedding!” You only get one wedding, right? So you want to ensure you hold back no stops for your special day together. 

The wedding, the dress, the ring, the venue, and the photographer all must be on point. The consequences would be too severe if you had a subpar wedding (at least in your mind). And let’s not forget about the picturesque honeymoon in the Bahamas.

How the Rich Buy Their Bling

Jumbo Debt. Well, you paid for the insane wedding and got all of the spending sprees out of our system… right? Sorry, that was just the beginning.

Now, you have real things to buy. These purchases include a big home (no starter house allowed), more vacations, new cars (each), a private school for the kids, new furniture, etc. 

Well, at least you kept getting promoted, right? Well, you hit the upper ceiling of where you fall on the chain of command. To progress higher, you will need to become a manager or administrator. That may require a move to a different location.

At least your spouse is working, right? They are, but once the second child comes, one of you needs to stay home with the babies. 

No worries, at least you have our spending under control. You are surviving (not thriving), saving 5% towards our retirement plan. You can’t complain about your life now. Life is good.

Surplus debt. Sorry, my friend, you were just getting started. Now, you need to turn up the spending to the highest levels. It is part of American culture. 

How We Built 13 Streams of Income

Let’s buy some toys (ATVs, jet skis), vehicles (boats, RVs, motorcycles), and hobbies (sports events). We also need beauty treatments for the ladies, along with fancy purses and jewelry. Had enough yet?  

I’m sorry to hear that you cannot keep up with this level of spending with your current job. I recommend getting a second job, taking a career out of state, or starting a business in your free time. Either way, you will have less happiness, freedom, and time with family. You are now a slave to debt.

The In-debt-ured Servant. This scenario is how most individuals’ lives will turn out because of a lack of financial education. America is home to the free, as long as you have no debt. 

Where did our worker bee start to go wrong? You cannot really point to anywhere in particular because all of this spending is natural to us Americans. They conditioned us to work to pay expenses. Even more dangerous, they conditioned us to work to pay liabilities. 

Build the Mindset of an Investor

In “Rich Dad Poor Dad,” Robert Kiyosaki says, “The rich do not work for money.” For me, these are the most powerful words ever written. There are many deep layers of meaning in these seven simple words. 

My personal take on these words is, “The rich do not exchange time for money; they exchange time for assets.” Now, I will replay the entire worker bee’s life with buying assets versus liabilities. 

Small Assets. You have been in the workforce for a little while, saving your five percent towards retirement. Since you are renting a room, you have some extra cash flow to invest. You start a dividend growth portfolio by investing in large blue-chip companies.

You keep getting promotions and investing more and more into your blue-chip companies. You also begin to read about cars and business.

Medium Assets. Yes, a car is a liability unless it makes you money. To ensure you don’t get into automobile debt, you buy a cheap, used car intending to rent it out over the weekends and holidays. 

Become CEO of Your Life

Your plan works, and you make a few hundred dollars a month in extra cash flow. Since you always want to keep earning more money, you invest this additional revenue into an income portfolio. 

Large Assets. Your job is going great, and since you have extra passive income flowing into your accounts, your pressure at work is minimal. You even decide to buy two more cars to add to your rental business.

Now you have three car assets, making you a good chunk of change. You are funding your dividend growth and income portfolios with this cash flow. Life is good. 

You join a small entrepreneurship-focused group outside of the city where you live. It is good to get away and enjoy the quiet life. At one of your group meetings, you see a beautiful person who is also an entrepreneur and focused on the future.

You both talk about a simple future of living on passive income away from the city. Long nights turn into weekends, and finally months. You fall in love with this person, and you match romantically (and financially). 

You ask them to get married, and they say, “YES!” Now, it is time to plan the wedding. You both say you will save up to three months of passive income from your businesses and fund the wedding. 

How to Stay Motivated

This amounts to $10,000, so you have to be creative. You work with family and friends to do your own decorations, and the venue is on a small plot of land that your cousin owns. The wedding is fantastic, everyone has a great time, and you still are growing your wealth slowly. 

Jumbo Assets. Your honeymoon in Las Vegas goes well, and going in the summer makes it highly affordable. Now, it’s time to get back to work. 

Your spouse decides to quit their job and work the rental car business full-time. This move is to prepare for having children soon. Also, they decide that blogging about their life is a great way to make additional passive income (from writing). 

And, since your finances are doing so well, you both decide it’s time to buy a house. You want to be away from the city, to raise your children in the fresh air and sunshine. You decide to purchase land as a great way to be near the city, but far enough away for comfort. 

But real estate is a mindset, and you don’t want to buy a liability. You need to find a way to make money from your investment home (a.k.a. your primary residence). 

The Wealth Accumulation Phase: 2 is Better than 1

Finally, you figure out the plan. Instead of buying one large 2,500 square mobile home, you buy two 1,300 square feet homes. The rent from the second home completely covers the total mortgage on the property. You are mortgage positive.

Surplus Assets. Life just keeps getting better. Your spouse grows the rental car business to twenty cars but hires a manager to handle the daily operations. It is now fully automated, and they can focus on the kids. 

Together, you reach a cool $1 million in the bank. This invested money pays you a 6% dividend yield, which equals $60,000/year of passive income. Your spouse asks you to retire and build a small business on the land. You agree.

Now, your only focus is raising exceptional children and grandchildren. You have all the love and wealth you need in the world, all on your land. You are free from the bondage of debt. You win!!

Differences. What differences did you notice between the two stories? Which worker bee do you want to immaculate? 

Multi-Generational Investing

My main takeaway is from the “assets couple.” The spouse loves the worker so much that they want them to retire to be together. 

In America, we say we love each other all the time, but we keep spending. The more cars, trips, and purses we buy, the longer one or both of us have to work. It’s like we are punishing each other. 

Love comes from thoughtful spending—buying what will benefit the family, then investing the difference. Eventually, our investments will allow us to buy whatever we want. 

Another takeaway is that the “assets couple” could prepare for children and grandchildren. They didn’t focus on the latest toys, trips, and jewelry. Family is truly the only thing that matters and will stand the test of time. 

Are you tired of being In-debt-ured? Are you tired of being a slave to your debt? It is never too late to free yourself. It starts by changing your mindset, setting goals, and finally, walking the path.

Most of your friends will leave you as you transition to investing & saving versus consumerism and materialism. No one wants to be around someone who “judges them.” But that’s okay because they know they should be taking life more seriously as well; it’s just hard to change. They resent your progress—let them. 

Merry Debt-Free Christmas

It feels good. My wife and I started our life similar to the first story, straddled with debt. We aren’t even materialistic; we just didn’t know how and why to invest. 

But, we got our acts together. We are debt-free, have $210,000 in our dividend portfolio, own three homes, and have a small writing business (that’s growing). We made $3,100 in passive income last month.

That’s why I started Military Family Investing, to share what I learned. Our story is turning out to be just like the “assets couple.” It’s a dream life where our family gets together with money flowing in passively. 

Creating passive income takes an absurd amount of knowledge and action, but it is not difficult if it is your priority. Trust me; it should be a priority. 

It feels good to have way more money coming in than you need. You can treat your spouse to whatever they want, but they just want to spend time with you. You know your kids will be okay because you understand the story of “debt couple” and “assets couple,” and you can guide them to the truth.

If you are tired of being a slave to debt—change. I have 700+ articles to help guide you. You can read everything from my early days to today in my Financial Independence Magazine series. Another free resource is my book “Don’t Gamble with Retirement 5 (pdf)” Good luck and Godspeed. 

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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing