I have reached a point in my life where I have a different understanding than I did when I was younger. Money is a particular topic that I feel very differently about now versus then, and I think helping others understand that my skewed views from the past led me to a bunch of issues and heartache is an important service.
When I was in the pursuit of my goal of being a Pro Racquetball Player, I was caught up in the idea that I would be rich and famous somehow as part of that journey. Racquetball does not lend itself to either, but I was sure somehow I would be recognizable everywhere I went, and I would be rich because of it. Social media wasn’t a thing twenty years ago, and racquetball is a minor sport at best, with a small audience and even smaller financial opportunities. My ego was driving the bus at that point, and while firm, almost delusional belief in yourself can be critical in getting to the top, the reasons I was pursuing this were mostly wrong. I did truly want to maximize my potential as an athlete in this sport, but other than that “pure” motivator, the rest was all geared towards satisfying my raging ego. I wanted the famous and fortune of the tennis world, but knew deep down that this was not possible in the small sport I had chosen.
Fast forward to today, and there is nothing I would hate more than being so recognizable that I can’t go anywhere without being noticed. A life in the eye of the public is no life for me; I do not want to sign autographs while I am trying to eat dinner or buy a new shirt. I love that I blend in to the crowd. I feel badly for those pursuing fame just to be famous and feel validated. It is an empty road, and the world is fickle. ALL OF IT can change overnight. One bad tweet, one controversial post on Insta and it’s all over in a flash. But Fame and Money do not have to be tied together, you can certainly have money without getting famous in the process. Most of the very wealthy people I know have the same thoughts when it comes to blending in, they’d prefer that no one really know that they are rich. They drive cars that are a few years old, live in a house smaller than they could afford, and they dress like everyone else does. The richest guy in Arizona, who I had given several on court lessons to, wore the same shirt and mismatched shorts to every lesson six weeks in a row. He’s worth over $3.1 Billion today and is inside the top 1000 of the wealthiest people in the world according to Forbes Magazine. No limousine arrival, no flashy Rolex on the wrist. If he walked by you in a crowd, you’d never know…
I think that part that so many people get confused is that they have to be famous to be rich, and that all of the things you think will make you happy are intertwined. THIS IS NOT TRUE. What I believe that most people get wrong about money is that they think that having a million dollars in the bank is a starting point to living a comfortable life and doing whatever you want. Please allow me to clarify something for you…this is way off base. Almost everyone will tell you that having a job or responsibility is one of the main things that gives their life a purpose. A human being without a purpose in life is a lost soul. For some, raising a family is plenty of a purpose to keep them focused and getting out of bed in the morning. The idea that you are going to A. have the opportunity to and B. want to lie on a beach sucking down Mai Tai’s is a completely false fantasy. You’ll be bored out of your mind in a very short time. Don’t confuse being financially comfortable with not having any responsibilities at all.
If you look at a realistic view of a life, what you really want are OPTIONS. This is what money really provides to people, at least when you have enough of it. So the next question of course is, how much is enough? According to this study from Princeton done a few years ago, the magic number is… $75,000 a year. Surprised? Yes, most people are. Now, if you have kids, live in an affluent part of town, etc., there are a lot of variables to factor in. But at this income level, assuming that you manage your money wisely, you can pay your bills, have choices as to where to send your kids to school, and you have money to take a vacation or two a year. For most people, this is the sweet spot they are striving for. No fame, no private jets and certainly no Bentley in the driveway. But options…enough for options in life, is what most people SHOULD strive for. Forget the Bentley, buy the Toyota. You won’t worry about parking it somewhere and having people mess with it, and both vehicles get you to your destination. Don’t buy a (lease) a car just to impress people that you don’t even know.
What I think people intuitively want is options. If you reach a certain financial status, and manage that money correctly, then you have options. You can send your kids to private school, you can play golf every Friday afternoon, and you can spend a week in Aspen skiing or on the beach in Jamaica. You have discretionary income, money that is truly set aside for fun. You now you have all your bills covered, money saved for the future, and still have enough left over to have fun with. THAT is a lifestyle that is attainable and I believe that most people should be shooting for.
Staying out of credit card debt and managing money properly takes some trial and error to get right. I have been sucked in on the 0% interest rate card offer, and I transferred a balance over to a new card. The plan was to pay off the balance within that year grace period, and avoid any interest payments at all. But what happened (and the credit card company was planning on) was that I paid about half off and soon was hit with 21% interest on the remaining debt. I was paying a ton in interest alone, and my monthly budget was squeezed because of it. Once I got a handle on this pattern, I was able to break it and live differently. Now we are debt free, minus our mortgage payment. We bought at the right time, and an interest rate of 3.625% is a dream come true compared to today’s rates. At the writing of this blog, the interest rates on a home purchase are right about 6%, meaning my mortgage payment would double.
My wife and I live far below our means, and are happier because of it. We have money in the bank to tap into if we need it. It is minor “eff you money”…meaning at any time, if either one of us has a situation at work that we cannot tolerate, we can walk away and not have a concern about money for at least six months. That is peace of mind I have only known recently, and I cannot tell you how much better I feel knowing that this is my new financial status. Despite not having a million in the bank, we just purchased a (new to us) car, are spending a week in CO coming up soon, I went on a ten day fly fishing trip, my wife is headed to Cabo for a friend’s bachelorette party, and we are having some upgrades down to the house. And all of this is within this calendar year. We both work hard at our jobs, and we earn a good living by doing so. But we have the opportunity to do things we want to do because of how we approach money. We have an amazing life together.
We do not want any kind of fame and fortune, we want financial stability, options and anonymity. We want to stay at home on Friday night most of the time, with an occasional night out when we choose. We want to travel, live, and enjoy our lives. This is the REAL PURPOSE of money, at least in my opinion. If more people knew just how attainable this lifestyle is, I think more people would make an effort to get to this level. It is not that far off from what the average wage is in the U.S. is roughly $46,000. I do not know if this was a household income stat or an individual. But if this was a household stat, with only one partner working, it would be easy to hit $75K. If it is both partners working, then there is some adjustment to be made to get to that benchmark of $75,000. A side hustle, more schooling, a different job all offer opportunities to get there. But what is key at any financial level is to have the discipline to live below your means and get your debt under control as soon as possible.
Don’t believe the hype, and definitely do not get pulled into the vortex of society that has you chasing a financial status or the trappings of this life. Live your wage. Get your debt under control and eliminated ASAP. Save for the future. Have fun with the money that is left over. Once the debt is gone, you’ll have more money to invest, save, and enjoy. Start small and work your way up. If I can dig out of a $70,000 debt hole, so can you.
There was a famous study done a long time ago called the Stanford Marshmallow Test, and basically what is was supposed to help determine was a child’s ability to delay gratification and how this outlook […]