The workforce is becoming a terrible place to spend your time. Everyone is running around with their hair on fire.
If your company pays you, they expect you to always be on call, answer all emails within one minute, and never say “no.”
Why do people remain in the labor market if things are going so badly at the worksite? Simply put, they are In-Debt-ured Servants.
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What is an In-Debt-ured Servant? An indentured servant chooses to pay their debt by working for the lender.
Notice the keyword above—chooses. That’s right; being in debt is a choice one makes on a daily basis. It’s not difficult to get out of debt.
Why are so many people struggling financially if it’s not overly challenging to free oneself from debt? The answer lies in peer pressure.
Do you remember peer pressure? Do you remember when you were in middle school and you began to feel peer pressure?
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You noticed if your clothes were not brand name (mine weren’t), your haircut wasn’t fancy, and you couldn’t afford school lunch.
Do you remember how you felt when you weren’t one of the cool kids around campus? Guess what? You never overcame these feelings and attitudes; they live on and affect every single decision we make.
What is lifestyle inflation? Our inner child still wants to be a cool kid. We want to have a nicer car than someone else or wear fancier clothes.
If the people around us are simple, it is much easier for us to be simple. I have a personal case study on this subject a little later.
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As we earn more money, we spend more on our quality of life—we call this lifestyle inflation. The more your expenses increase, the longer you will remain in the workforce. You are your own worst enemy.
Lifestyle inflation can keep you working until you are in your 70s or 80s. It makes people marry others to “attempt” to get the financial lifestyle they desire (or deserve).
Marrying someone for money rarely works, but people are trying more than ever. People are prioritizing someone’s ability to produce income above their core values—this ends badly.
A quick case study. I served a total of seven years in Japan across three tours of duty. I noticed one interesting phenomenon throughout those years.
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It’s difficult to bring an American car to Japan for your tour, so most people buy old cheap Japanese cars. Japanese companies won’t finance Americans to buy the latest cars.
Therefore, all Americans buy cars that range from $1,000 to $3,500. Nobody cares about their vehicles, and there is no keeping up with the Joneses. We were all on equal footing, and no one complained.
I then watched the same Americans move to San Diego and buy the latest cars for top dollar. Why would they go into $60,000 to $90,000 in automobile debt when they were just driving a $3,000 car the month prior? Because of that same lingering peer pressure.
The cold war of luxury. In the 1970s and 1980s, the Cold War was an arms race to produce nuclear weapons and space exploration.
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There was always competition between the countries. You are putting yourself into a similar arms race when you shop for luxury.
There is literally no limit to the amount of money you can spend. If you get a $30,000 credit card, you can spend it all the following day.
If you are trying to have the nicest car, fanciest clothes, or best vacation, you can spend money forever. So the trick becomes to control yourself.
Most people need to understand that they can curb their lust for spending and luxury. If you want any chance of true happiness, you must begin to live below your means.
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Living below your means gets a bad reputation. People hate the words “live below your means.” However, it simply means to value something above money.
The moment you decide that spending time with family is more important than money; you’ll begin to eliminate your bad spending habit.
Financial freedom isn’t about money; it’s about time. You have two choices: pay $800/month towards a car, or invest $800/month towards an income investing portfolio.
Paying $800/month (for six years) towards a car nets you a used vehicle. Investing $800/month (for six years) wins you a monthly dividend payment of $480.
What can you do with $480/month in dividends? You can spend this money on family events and fun.
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Why do people want to work? Why do people want to stay in this “dog eat dog” workplace? Because they do not know any other way to live.
Since they are unhappy at work, they want to buy more expensive things in their free time. They choose (that word again) to invest in more fabulous cars, so they look fancier as they drive to work. Remember that peer pressure from middle school.
The golden handcuffs of lifestyle inflation come from decisions we make every day. We can easily drive a $15,000 Ford Focus to work. Your co-workers will not even take the time to laugh at you.
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Remember, they are up to their eyeballs in debt. With this much debt, it is simply too difficult to see anyone else’s problems. Nobody cares what car you drive.
Conclusion. Do you know what gets people’s attention? When you tell them that you are leaving the workforce.
When you tell them you are retiring on $10,000/month in passive income, they cannot fathom how anyone can live without working.
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Don’t put yourself in a situation where you are blind to “the math.” Math surrounds us and determines how we spend our time.
With every poor financial decision, you purchase more time in the workforce. With every good financial decision, you buy more free time.
Eventually, you can repurchase all of your time from the workforce by creating passive income. This money comes in whether you work or not.
Do you want to wear the golden handcuffs of lifestyle inflation? Or do you want to wake up every morning and drink coffee with your spouse peacefully? No work today or tomorrow for you two. If that sounds good, start making great financial decisions. Good Luck!
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