Quote:
Originally Posted by greenmachin
So I was watching this show recently and it kind of made sense.
The guy said that treat your money like your oxygen supply. You don't have one specific plant that gives you that sweet H2O right? That's how you have to think about your money because both are that important.
Now I don't know how good you guys are doing but like most ppl, I'm a one job dude at the moment (Though I'm doing some Adult Education at night as well to upgrade).
Do you guys have anything else coming in besides your job? Like a side business on ebay, Amazon, Thinkific or a brick and mortar venture? Heck even an investment perhaps thats giving a nice return or what not.
Cuz if you think about it, if my one source (Job) disappears, I'm going to be in trouble. Yeah I'm sure I'll find something but it's just annoying. |
To be honest, I think you are looking at things a bit wrong. I will use your analogy a bit and expand to what I mean.
First, you have to maximize your oxygen production. The easiest and quickest way to do that is decrease your O2 consumption. The Average person living in the USA (which I would assume also applies to you as well) will make $1.4-$2 million in their entire lifetime. If you are living paycheck to paycheck, you are likely NOT on a written budget and do not track where all your money goes. Small decreases in ones lifestyle (limiting eating out, cutting cable off, decreasing thermostat, etc) can pay big dividends and you can then put your money in places where it will work for you.
Second, you need to have oxygen storage. Cover that momentary blip in increased O2 consumption. Murphy's Law will always strike, so if you have $1000 saved up in an Emergency Fund you won't be as worried about an emergency.
Third, again, reduce your oxygen consumption. Pay off all your consumer debt. Debt is stupid. Car loans are stupid. No one gives a rats behind on what car you drive, except for you. A $3000 2002 Toyota Corolla will get you to work and back just as well as a $15000 2017 Chevy Tahoe. Debt does not get anyone ahead in life.
"Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it." -Albert Einstein
Fourth, again, increase your oxygen storage. Save 3-6 months of living expenses in a Emergency Fund. The average American family should save around $10,000-$20,000, and NEVER TOUCH IT AGAIN EXCEPT FOR AN EMERGENCY! Put it in a money market account or a savings account and leave it. The point of the emergency fund is not to make money. It is there only to stave off Murphy's Law.
If you do those four things, you will be ahead of about 75% of
ALL North Americans. I guarantee you the potential stresses that come with the thought of loosing a job will be nearly zero.
I am a huge Dave Ramsey fan and these are his principals. If you are, indeed, worried about a potential job loss, I would highly recommend reading his "Total Money Makeover." There is nothing wrong with bettering yourself, and making more money. I say, go for it, but also learn to manage your money as well. Unfortunately, so often, most will adjust their lifestyle with pay increases and never really get ahead in life.