Thursday 21 April 2022

Escape the Rat Race?

Do you remember when you first started school? What was the goal? To make it in Standard One? Then it was to get into Standards 2, 3, 4 etc. until you reached secondary school. That’s when the real pressure was put on! Not only good grades but do well enough in SPM to get accepted into your college of choice.

And then what happened during university? You start going step by step to either go out into the real world or a professional school. After putting in a lot of hard work to start the career you’ve always wanted, now comes another struggle, one for success.


Source: https://soul-inspired-leadership.com


And again, there seems to be a ladder before you in which you’re reaching all the time. Then you wake up one day staring at a 60-year-old person in the mirror… but you feel cheated. At this point you think you should have already “arrived” but you feel the same as you’ve always felt. 

You’ve thought during all of these working years you were going to get somewhere but you’re in the same place you started. Why? It’s because all along you’ve been in a race that can’t be won….the Rat Race. The “real” rat race is someone that is living on the financial edge, working a day job and being one paycheck away from broke. 

This person feels as though the moment money enters their life, it immediately disappears. And the more responsibilities they have, the more dangerous this relationship becomes.

Their entire financial position could turn upside down with:   
the loss of a job    
unexpected health accident    
any other “financial emergency”

If any of these issues happen, their job no longer becomes an option. It becomes a necessity in order to keep funding their lifestyle. They don’t know what to do.
The first step to escaping the rat race starts with something a Michael Jackson song instructs us to start with… the “Man in the mirror.” Specifically, it begins with reflecting on our personal relationship with money. 

Financial gurus such as Dave Ramsey teach many to calculate monthly expenses such as:    
food    
transportation    
housing    
entertainment    
utilities

This will enable a budget being created and each month decide how much you can spend within each category. If you don’t take control over your behavior as a consumer, getting your financial life together will be impossible. 

Once you get your mind made up that you’re going to exit the rat race, starting an emergency fund should be on the top of the list. Dave recommends saving 3-6 months of expenses in a checking or savings account. The idea is that if you have a financial emergency, use funds from this account instead going into further debt.

If you truly care about exiting the Rat Race, unfriend/unsubscribe to the Joneses channel ASAP. 
It’s reaching financial independence (“FI”) as quickly as possible.  An important thing to do as your goal is to replace monthly expenses with passive income.
Robert Kiyosaki’s 3-step formula to achieve FI:    

1. Buy assets that generate cash flow (i.e. rental properties/stocks/bonds)
    
2. Use the passive income from the assets to pay for living expenses
    
3. Once monthly cash flow from assets is equal to or greater than monthly living expenses, you’re financially independent.

Reference:
Escape the rat race: what school failed to teach you about money, Dr. Jeff Anzalone
(https://www.dentaltown.com )

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