Financial Independence

man wearing brown suit jacket mocking on white telephone

I Hate My Job: Staying At A Job That You Hate

Money Maroon

On the journey to financial independence, many sacrifices must be made. In today’s article, we will discuss one of the many sacrifices that is made to achieve financial independence: staying at a job that you hate. We stay at jobs we hate for many reasons including financial and non financial. While we aim to achieve financial independence, we must balance our financial desires and our health. Staying at a job that you hate can lead to many detrimental effects, including eventual loss of your job, mental break down, self medication and addiction.

Reasons We Stay At A Job We Hate – Debt

There are many non-financial related reasons that will lead you to staying at jobs you hate. However, when you look at financial reasons, paying off debt tends to be at the top of the list. This is of no surprise. 

Debt
Are you staying at a job that you hate to pay down debt?

Student Loans

At the current costs for college and thereafter potential graduate school costs, it is highly likely that college graduates entering the work force are doing so with tens of thousands if not hundreds of thousands of dollars in student loan debt. Many professions do not pay a salary that is enough to pay off student loan debts within a year or two. As such, it takes many years even decades to pay off student loans. Now add life events and the period for paying off student loans are further extended. By extending the period for paying off student loan debts, many are unable to leave a job they hate.

Consumer Debt

Aside from student loan debt, many also have consumer debts. Consumer debt may include credit card debt among other debts such as auto loans and mortgages. Credit card debts may have been accumulated over time when you were younger and not attuned to your financial future. Auto loans and mortgages may occur as we grow with family.  Consumer debt is a sure-fire way to keep working – such that you can service your debts. Consumer debt is a reason many are staying at a job they hate.

Financially Supporting Your Children

For those who have children, many have the belief or a self impose obligation to pay for their children’s college expenses. As noted above, it is of no surprise that many leave college and graduate school with tens of thousands if not hundreds of thousands of dollars in student loan debt. 

It is important to note that you are not responsible for your child’s student loan debt, unless you want to be. Generally, it is not your obligation. It is important to ensure that your financial life is in order before helping your child. Simply put, your children have more time to develop wealth and financial independence than you do. Any shock to your financial situation can detrimentally affect your financial future. However, your child is in a position wherein their financial health has a better chance of recovering. As in the airline videos prior to take off, in case of emergencies, put your oxygen mask on first before assisting your child. In the same vain, handle your financial situation first before tending to your child’s.

Reasons We Stay At A Job We Hate – Achieving Financial Targets

We also stay at jobs we hate to generally hit financial targets. It is not only paying down debt, but also accumulating wealth. We may hate our jobs but, we also understand that a high paying job where we work long hours and where we are completely miserable may be bearable for a period of time to save and achieve a financial target. However, the sacrifices that are made here must be balanced. The misery of a job should not defeat or overcome the person. 

Reasons We Stay At A Job We Hate – Golden handcuff

Golden handcuffs refers to financial  benefits that encourages highly compensated employees to remain within a company or organization instead of moving from company to company. In simple terms, a high salary and benefits make it unmanageable  and mentality impossible to leave your miserable job. Essentially, you have become so used to the money, the glamor, power and the title that no matter how miserable the job is, you will continue to do it because you cannot imaging not having the benefits of the job. Golden handcuff is a major reason you may consider staying at a job that you hate.

Reasons We Stay At A Job We Hate – Fear

Many will not leave a job because of fear. Fear can paralyze and in many cases it does. Some takes the saying “a bird in the hand is worth two in the bush” to the extreme. That is, some would rather suffer for something guaranteed (the current job) than take a risk and move on. 

Others also take the saying “the devil you know vs the devil you don’t” to an extreme. Many will succumb to the feeling that it is safer to deal with a familiar miserable situation (the current job) than risk taking a chance, finding a new job and be happy.  Fear may lead you to staying at a job that you hate.

Reality

In many cases, it is less safe to stay at your current job if you hate it. Eventually, your displeasure, misery and unhappiness will show at your job in your interactions with others and/or your work product. Even if you are able to bottle up your misery,  the miserable situation can cause a lot more pain than you think. For example, mental pain and anguish may bleed over into your life outside of work. This can lead to depression, drugs, alcohol and related health problems.

How Do We Get Out Of These Jobs Faster

To open the door and unchain yourself from a job you hate, live below your means, save, invest and repeat. These actions will increase your discretionary income and allow you to achieve goals faster.

Further, what good is it to live 50 years of your life in misery because of your job. Take the chance after doing your due diligence and search for what you want and go after it. This approach may delay when you become financially independent, however, you will be in a better place mentally. Mental stability will impact your family and future in unimaginably beneficial ways.

Conclusion

On the journey to financial independence, many sacrifices must be made. In today’s article we discussed one of the many sacrifices that is made to achieve financial independence: staying at a job that you hate. We stay at jobs that we hate for many reasons including financial and non financial. While we aim to achieve financial independence, we must balance our financial desires and our health. Staying at a job that you hate can lead to many detrimental effects, including eventual loss of your job, mental break down, self medication and addiction.

Follow me on Twitter @JoToFI_com

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Video Summary

Covid19

Pandemic And Financial Stability

Money Maroon

If Covid-19 has brought anything to the forefront, it is the fact that life is short and can end at any moment. Further, you may spend your last weeks, days, hours and minutes alone and without family. As we grapple with our new reality during this pandemic (Covid-19), the importance of financial stability has never been clearer. The pandemic’s effect on financial stability is unimaginable.

Pandemic And Financial Stability: Job Losses

The most obvious effect of the pandemic relates to job loses. As we have shut down economies to contain the virus, close to over 50 million Americans have filed for unemployment. This is in the United States alone. 

It has been reported that about 39 percent of households earning $40,000 or less has reported job loses. Over time, it has become very clear that the poorest households are being impacted the most by the pandemic, not only with regard to job losses, but also in contracting the virus. 

The pandemic’s impact on the poorest families is predictable. Think of those who are delivering your food, working the register at your favorite stores, bags your grocery and perform occupations that cannot be accomplished via a web based service at home. These individuals tend to be at the lower end of the economic scale, most likely to have health issues and limited access to health care. Together, this leaves a situation where low-income communities are more likely to be exposed to the virus, have higher mortality rates, and suffer more economically.

To look more globally, beyond the United States, the world bank estimates that Covid-19 could push about 49 million people into extreme poverty in 2020. Therefore, for those who were in the worst financial position, the pandemic has only made it worst, a lot worst. Simply put, the pandemic’s effect on financial stability has been devastating for the most vulnerable.

Pandemic And Financial Stability: Who Stays At Home

Mom at home during pandemic
Who stays at home during the pandemic?

An additional impact of the pandemic is on the family, specifically in view of child care. Yes, the pandemic’s effect on financial stability, is an impact on the family! As we have watched many members of families spend their final moments alone, or hear repeated stories of the virus wiping out multiple members within a family, the family generally is a major topic with regard to the pandemic and financial stability. Especially as the school year approaches.

As the pandemic rages on, many families have been forced to make a difficult choice, especially if they have school age children. Who will stay home/watch the kids? Do you and/or your spouse continue to work long hours and neglect your children that is now out of school or do one or both of you cut back?  

These are some of the most pressing questions at the kitchen table for those with children in elementary school and younger because of the attention required. But even for those older than elementary school age, if your kids are home, you still need to direct your attention to them to ensure that they are doing what they should. For example, your children attending on-line classes, paying attention during their video classes and staying on track.

For single parents, matters are even worst. Do you quit your job to stay home with your children when your employer requires your physical presence? With bills to pay, including mortgage or rent, how do you decide?

If you are without kids, how are you mentally coping with working from home without human contact? Generally, how are you separating work life from home life? Are you currently experiencing burn out?

Pandemic And Financial Stability: Money To Be Made

Not everyone has been detrimentally affected by the pandemic. There are some who were prepared and are trying to take events in stride. Many expected a dip in stock prices and took advantage. Others had an emergency fund and were able to better handle a job loss and transition to another. Still, there are others who have actually profited from the pandemic. Think of Jeff Bezos, Netflix, and entrepreneurs who are pushing forward services that are needed in today’s Covid-19 economy.

Pandemic And Financial Stability: Increased Saving Rates

An interesting effect of Covid-19 is the converging circumstances and their effects on the savings rate. With the government paying certain benefits, the United States have increased its general savings rate. Basically, with economies shut down and no where to eat out or spend discretionary funds, many individuals are socking away an increase percentage of their paycheck (if they are able to keep their jobs).

Bifurcation

In view of the above, what we are seeing is a bifurcation in societal finances. In one case we have individuals who are profiting from today’s current situation  and becoming more financially secure. On the other hand, others are struggling with the basic necessities. In every downturn or national event, this is always the case.

It is incumbent on each and every one of us to prepare ourselves for unforeseen hardships that may lay ahead. While no one could have predicted Covid-19 and its effects, we know this will not be the last time we have such a financial shock. Make the sacrifices now to be able to better whether financial shocks. The pandemic’s effect on financial stability is profound, but we can protect ourselves if we plan ahead.

Pandemic and our choices
We are at crossroads

Conclusion

If Covid-19 has brought anything to the forefront, it is the fact that life is short and can end at any moment. Further, you may spend your last weeks, days, hours and minutes alone and without family. As we grapple with our new reality during this pandemic (Covid-19), the importance of financial stability has never been clearer. The pandemic’s effect on financial stability is unimaginable. However, we can protect ourselves if we plan ahead. Journey to financial independence.

Follow me on Twitter @JoToFI_com

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Fire Movement

Fire Movement: What Is F.I.R.E?

Money Maroon

What is F.I.R.E? Financial Independence Retire Early (F.I.R.E) is a movement (Fire Movement) that is dedicated to saving and investing over time to achieve financial independence such that you can retire. The goal of the Fire Movement is financial independence, but also the ability to retire far earlier than typical. What is F.I.R.E? It is not a millennial fad. It is not only for those having a high income and no children. Financial Independence Retire Early is for everyone who wants to achieve financial independence.

Fire Movement – F.I.R.E Is Not A Millennial Fad

While F.I.R.E itself is generally new to the lexicon, the concept is not. For hundreds of years, many have saved, invested, and have experience financial freedom such they can do what they desire. Let us think about it, is this not a version of what you tell your kids, and for that matter, what your parents told you? Save, such that you can have more for a rainy day. In the case of F.I.R.E, that rainy day is early retirement.

The earliest version of the modern Financial Independence Retire Early approach is said to be borne out of the 1992 best-selling book “Your Money or Your Life” by Vicki Robin and Joe Dominguez. This concept has further evolved into what we see today. Today’s movement applies the tools currently available.  For example, many achieve financial independence via use of online savings accounts which have higher interest rates, the use of Roth IRAs and traditional IRAs, maxing out 401K or related accounts, investing in low cost index funds, paying down credit card debt, and developing a side hustle in the gig economy. 

Fire Movement – F.I.R.E Is For Everyone No Matter The Income Level

F.I.R.E is not just for those with high incomes. Don’t get me wrong, I do understand that some with high incomes may have an easier time saving and investing. However, that may not be a logical reality. As noted previously, higher incomes may at times result in high debt.

It is not atypical for high earners to live pay check to pay check. Simply put, those nice cars carry a nice car payment and a nice cost for insurance coverage. Those nice homes comes with a nice mortgage and nice costs of up keep (insurance, heating, cooling, landscaping, house keeping). Further, high incomes typically comes following longer educational requirements, longer educational requirements comes with high student loans.

The simple fact is, no matter if you are taking home a high income, low income or something in between, F.I.R.E is for you. No matter the income level, achieving financial independence will take discipline and sacrifice. While popular stories show the extreme (those having a six figure incomes who are able to save greater than 70% of their incomes over a number of years or those who live in their cars in the middle of nowhere such that they are able to save 90% of their income), there are also many others who make less than six figures, have children and were able to achieved financial independence.  No matter who you are, live below your means, save, invest and you can achieve financial independence.

Retire Early

The “Retire Early” portion of F.I.R.E is typically triggered once savings/investments reach approximately 30 times yearly expenses (F.I.R.E Number). The aim is to have savings/investments such that they are able to cover living expenses by withdrawing 3% to 4% of saving/investments yearly. The total savings/investments needed to achieve financial independence is dependent on your lifestyle and the lifestyle you want to have going forward. There are different categories of F.I.R.E.  For example, there are (1) Fat, (2) Lean , (3) Barista, and (4) Coast.

  • Fat F.I.R.E: Living and planing to retire with a traditional to above average lifestyle. Fat generally requires having a higher F.I.R.E number. With fat F.I.R.E, you are more prepared for most unforeseen financial bumps in retirement.
  • Lean F.I.R.E: Living and planning to retire with a more minimalist lifestyle. Lean F.I.R.E generally requires extreme minimalist living and extreme savings. Thus, a lower F.I.R.E number. With lean F.I.R.E, you may be more sensitive to unforeseen final bumps during retirement
  • Barista F.I.R.E: Those on the journey to financial independence who have quit their traditional employment but still do some part-time work to cover current expenses that would otherwise erode their savings/investments.
    • Withdrawing money from your savings/investments, but supplementing it with income
  • Coast F.I.R.E: Those who have enough in their savings/investments and are doing some part time/full-time work to pay for their living expenses.
    • Keeping employment to cover living expenses and not withdrawing from your savings/investments

Which of the above fits what you and your family are trying to achieve?

Critics

The general angst of F.I.R.E is Retire Early (R.E). Many who are critical of the Fire Movement focuses in on the early retirement component. What happens if you hit a financial bump following retirement? Note that many who are committed to early retirement have no intention of retiring at 35, 40 or 45 years of age to sit at home. F.I.R.E enthusiasts typically have no desire to retire and do nothing. F.I.R.E enthusiasts generally do not desire to stop contributing to society. 

To F.I.R.E enthusiasts, Retire Early generally means you can retire, if you want to. Retire Early means you can leave a terrible career and do what you want, whether that is starting your own business, volunteering, or spending more time with your family. Retire Early means doing what makes you happy, pursing your passion. As a reality check, if someone is discipline enough to save, invest and achieve early retirement, do you think that individual will sit at home and twiddle their thumbs once financial independence is achieve? The answer is a resounding no.

Further, there are countless benefits to starting the journey to financial independence or achieving financial independence. Having money in the bank lowers financial stress, allows you to take advantage of opportunities and improves confidence. The confidence to take active steps in life to better yourself and financial position. These benefits will affect all aspects of your life, including your personal relationships and your mental health. 

F.I.R.E Financial Independence and freedom
F.I.R.E means freedom

Conclusion

What is F.I.R.E? Financial Independence Retire Early (F.I.R.E) is a movement (Fire Movement) that is dedicated to saving and investing over time to achieve financial independence such that you can retire. The goal of the Fire Movement is financial independence, but also the ability to retire far earlier than typical. What is F.I.R.E? It is not a millennial fad. It is not only for those having a high income and no children. Financial Independence Retire Early is for everyone who wants to achieve financial independence.

Follow me on Twitter @JoToFI_com

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Video Summary

What Is F.I.R.E?

Think outside the box

Financial Independence: Think Differently

Money Maroon

Money is emotional. The environment you are in can have a significant effect on how you approach and use money. One of the many actions that will continue to keep you from achieving your financial goals is the desire to show others that you have made it. It is only human nature to have this desire. However, if this innate desire is not controlled, it will create roadblocks to achieving financial independence. Think independently.

Think outside the box and achieve financial independence
Think outside the box to achieve financial independence

Be An Independent Thinker And Achieve Your Financial Goals

It is important to remember that financial independence, includes “independence”. To achieve financial independence, you must be an independent thinker. Further, you must also be able to act independently. Following the herd will not lead to financial freedom. Running with the herd will get you to the average:

  • Working until you are 65 with an underfunded retirement;
  • Keeping up with the Jones and having thousands in credit card debt;
  • Having a 30 year mortgage that is refinanced repeatedly; and 
  • Having new vehicles every four to five years financed over a five to eight year term.

Following the herd is not a path to financial freedom. It is the path to a life of being financially dependent on your employer and being at the mercy of your creditors. Being apart of the herd is a sure-fire way to working for the rest of your life.

Financial Independence Requires Time And Consistency

To achieve financial freedom, adapt an independent mindset and take the road less traveled to achieve your financial goals. Living beneath your means, saving, and investing over time is the tried and proven way of achieving financial independence. The process is simple and straight forward. But, to achieve financial independence requires sacrifice, time and consistency. Achieving financial freedom requires discipline to live within your means without being affected by the actions of those around you. 

Are You Willing To Make The Sacrifices Required To Achieve Financial Independence?

Think about things differently and achieve financial independence
Think differently

Look around, now focus on those who are truly financial independent. Very few are. If you take a close look at those around you, it will become very clear that being rich does not equate to financial freedom. Achieving financial independence requires not only earning money, but also being able to keep a high percentage of that money. Keeping a high proportion of money earned takes making sacrifices.

By thinking differently, it will be easy to understand that:

  • It is ok to have a paid off five year old car when your neighbor has a current year luxury vehicle;
  • Living in a small home and wearing the same set of clothing in an effort to payoff debts are ok; and
  • While it may be difficult, it is ok to forgo certain events/pleasures to stay within a predefined budget. 

The above are all ok because building towards having several months of living expenses in the bank to fully fund an emergency fund and having investments, that are working while you are sleeping, are part of the journey of not being beholden to anyone financially.

Get Started On Your Journey To Financial Independence

As the saying goes, getting off the ground takes 80% of the energy while maintaining orbit takes 20%. To begin on the journey to financial independence takes 80% of the effort while maintaining your set route to achieve financial independence takes 20%. Get the figurative ball rolling Now!

Conclusion

Money is emotional, and the environment you are in can have a significant effect on how you approach and use money. One of the many actions that will continue to keep you from achieving your financial goals is the desire to show others that you have made it. It is only human nature to have this desire. However, if this innate desire is not controlled, it will create roadblocks to achieving financial independence. Think independently and achieve financial independence.

Follow me on Twitter @JoToFI_com

Follow me on Instagram @JoToFI_com

Video Summary