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Tuesday, January 31

Short Term Sacrifice, Long Term Gain

If I had to condense all my financial beliefs into one main idea, I would say my plan is to provide for my needs with only passive recurring income.

I look around at my friends and acquaintances and realize many of them have little to show for their years of labor.  I don't have to look far:  my own mother is the perfect example (in fact, I'm probably the way I am because I'm rebelling against the way she raised me).  Let me explain:  Mom thinks money is flammable, and the only way to prevent it from burning a hole in your pocket is to spend it right away.  Over the years her refusal to build a safety net has led to foreclosure; she's been evicted from the apartment she moved into, she's lost every job she's ever had, and she owns nothing more than a few pieces of furniture, clothes and a beat up car.   Whenever I've tried to help her she's just blown the money on something she doesn't need.

I guess I should mention 1) that I love my mom, and 2) she doesn't know about my blog.  And in case you haven't figured it out, she frustrates the hell out of me.

Moving on...

I really don't consider the way I live as sacrificing anything, but people around me seem to think so.  I don't subscribe to cable TV because I think TV makes you lazy, plus there's just not much on TV worth watching.  The financial explanation is even more compelling:  if I assume cable TV would cost me $100 per month and I could earn 8% on that money if it were invested, I would have thrown away about $87,000 over 25 years.  I can think of many things I could do with $87,000 that would give me greater pleasure than being able to watch Hoarders the day it airs instead of later when I can watch it for free.

On the income side, I'm working quite a few hours doing mystery shops that don't pay too much.  Why do I put up with low pay?  Because I'm not where I want to be.

Where do I want to be?  I said it already:  I want to provide for my needs with passive recurring income.  The quicker I get there, the better.  So I continue to toil in the name of debt reduction, knowing that more than likely, at some point in the next 5 years, I will reach financial independence.

Oh, I almost forgot.  One of the few things Mom does have is cable TV.  She would never give that up.

1 comment:

  1. I've watched less than 4 hours of tv so far this year. We wouldn't have cable, except my wife wants it. Of course, I do watch a lot of baseball on my Ipad/laptop and occasionally will catch a movie with netflix.