Questuosus

We have discussed nine leading motivating factors for people seeking financial independence, but there are probably hundreds of real life situations that simply don’t fit into any of the categories we have discussed. What is yours?

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This is My Shocking Story

This blog is not intended to teach or preach. I am sharing many of my own personal experiences and the things that I have learned along life’s highway. I hope that at least some of these experiences will be of interest you. Some of it is – and will be – intentionally shocking and provocative. Provocative? Yes; it is written specifically to provoke thought. Surprisingly, most people let other people do their thinking for them. That realization has always been a profound disappointment to me. If I can jolt just a few people into re-examining things that they previously strongly believed in – but didn’t know why – then my shock tactics will have succeeded.

Go Ahead – Tell Me How Wrong I Am!

I don’t want you to agree with me. I want you to think about what you read here and form your own opinion. Argue with me. Tell me I am dead wrong. Just, please, remain civil and polite. But, most of all, contribute. There are too many “lurkers” in the world. If you don’t have the confidence to voice your opinion in a comment on any of the posts on this blog, then you may be destined to remain a lurker. A lurker looking in through the window at the warm and comfortable world of financial independence inside – but with little hope of ever joining it.

Please join in and add value to the content of this blog by way of comments. This is my story, but I want to hear your story. Let me share a quotation that I have found helpful and highly relevant to this post:

I not only use all the brains that I have, but all that I can borrow.

– Woodrow Wilson

Administrator General Topics 10 Key Motivators for Financial Independence, Your Motivation

Sadly, a lot of marriages end in divorce. Happily, some divorces end in marriage to a new reality. A reality in which years of interdependence transforms into individual financial independence. When couples embark on the highway of married life, it is with the expectation that the journey will last a lifetime. Often, the journey leaves paved roads and ends up on a rocky backroad.

Merged Finances

Somewhere along the road, the couple will have merged their financial affairs. Joint bank accounts. Life insurance policies naming each other as beneficiaries. Retirement savings accounts, health insurance, mortgages, car loans, stock portfolios, children’s college funds.

As the bumps in the road become more pronounced, the couple may begin to realize the imbalance in their joint financial affairs. One spouse may be launched into self-employment while the other remains inside the comfort zone of a secure job with benefits; benefits like employer-paid health insurance. As long as the marriage remains on track the imbalance is immaterial and unquestioned. But, as the road grows bumpier, the individual contributions become a bone of contention and a red flag for each partner as separation plans develop.

Things that were taken for granted for years suddenly become major issues and causes for concern, contention and negotiation. Can an amicable separation be agreed? How will each partner fare in the post-separation timeframe? Will an imbalance in contributions lead to friction, hardship, anguish and financial distress?

The threat of separation and divorce may be one of the most powerful motivational factors leading to a hard and firm plan for financial independence. In this case, the independence is not from wage slavery, but from a romantic partnership that has lost its way. It is one of the most difficult situations to resolve because many years of interdependence must be unravelled in a short timeframe while under the duress of emotional strain.

Beware the Other Side of the Coin

There is another side of the coin that is highly germane in this situation. If one spouse embarks on that journey of financial independence, a financial imbalance may be created. The other partner in the relationship may develop a resentment about contributing more than their fair share. Beware.

Administrator General Topics 10 Key Motivators for Financial Independence, Separation & Divorce

Do You Really Want to Retire?

Ask the average man in the street if he is looking forward to retirement and you will get a mixed reaction. Joe Average will be looking forward to not having to get up and go to work. At the same time, he will probably have some apprehension about how he is going to pay for his retirement. For Joe Average, retirement will come at age 65. If he makes it to that age without being laid off from his job, he will be laid off permanently.

Ask a lot of self-employed people if they are looking forward to retirement and they will tell you they are going to “die with their boots on”. They are never going to retire. Is that because they don’t believe they will be able to afford to retire? Usually not. If “nothing is really work unless you would rather be doing something else” (James. M Barrie) then the real reason many self-employed people will “die with their boots on” is because they actually enjoy what they are doing.

Yes! I Really Want to Retire – As Soon As I Can Afford To.

I would have to ask you “why?”. Personally I can’t imagine sitting around, nothing to do, waiting for St Peter’s call. Empty days, wasted days. No, not for me. But let’s assume that your motivation is an escape from wage slavery. You just need enough money to pay for it. You have two options depending on when you make the decision to act.

Option #1. The realization that you wish to cast off the shackles of employment arrives at an early age.

Frankly, this is both rare and unlikely. But, if it does happen, you have a world of opportunity. You could simply manage your retirement savings in such a way as to be able cut the ties before the mandatory retirement age. Your retirement date moves forwards or backwards depending on your dedication and level of success.

Option #2. The urge to retire comes later in life.

I have to ask. “Is this really a desire to escape impending loss of employment, or a dead end job?” If it is then I recommend reading the appropriate posts on this blog covering those topics. If the revelation comes too late in life to save enough to pay for an early retirement you are going to have to pull a lot of rabbits out of hats to make it. But don’t panic. In later posts we are going to share a lot of “pulling rabbits out of a hat” tricks.

Pulling Rabbits Out of Hats

Funny thing is, when you are standing there, with the rabbit’s ears clasped in your hand, suddenly you will be filled with an overwhelming urge to spend the rest of your life pulling rabbits out of hats. A big, bright light will illuminate somewhere above your head, just out of sight, but it will light up your path. You will look down and see your feet and quietly realize that you want to die with your boots on.

Footnote: I once worked for a US high-tech company based in Connecticut. The founder and president was a man named “Chuck”. Chuck was in his 70s when I worked for him. He ate, breathed, slept and wept for the company he gave birth to. He also had a habit of falling asleep during meetings. One day, during one such meeting, he couldn’t be roused. Chuck died with his boots on. He is one of the happiest men in God’s heaven.

Administrator General Topics 10 Key Motivators for Financial Independence, Early Retirement

Credit – a powerful tool but a curse for the fool

During the last few years it has been easier than ever to access credit. Credit is one of the most powerful tools available for building wealth, but it can also be one of the most destructive tools for building debt. Some kinds of debt are actually good. In later posts we will discuss using debt to leverage enormous amounts of investment capital. Unfortunately debt can also be highly unproductive when it is caused by out-of-control consumer spending.

Cut Up Your Store Credit Cards

One of the worst culprits for building unproductive debt is credit cards. Bank credit cards usually carry a high interest rate; often several times the minimum lending rate posted by the central banks. Go ahead, blame the banks for being greedy if you like, but remember they are taking a big risk and big risks come with big rewards. Retail store credit cards are even worse. They typically charge over 28% annual interest. Carrying a balance on a retail store credit card is one of the surest ways to incur unmanageable debt. The golden rule with credit cards is to use them for convenience only. If you need extended credit use a lower cost loan to pay off your credit card balance every month.

A Slave to Interest

I have known people operate their personal finances in such a way that they have several maxed out credit cards. After paying down the balance a little, another consumer toy attracts their attention and, once again, they are maxed out. They are paying a huge amount of interest and often pay only the minimum balance on the bill each month. I’ll admit, I got into a similar situation myself once. But, instead of consumer debt, I maxed out several credit cards to support a business investment that went wrong. The end result is the same – you become an interest slave.

Independence From Debt

The process of building financial independence does NOT mean the elimination of all debt. I paid for an investment course once and one of the key things I remember is the instructor’s definition of a millionaire: a man who OWES a million dollars. Think about it for a moment. If you were to walk into your bank and ask for a million dollar loan, the bank would demand collateral of at least a million dollars. In other words, you would have to own assets of at least a million dollars in order to borrow that amount. And, if you have assets of a million dollars, then you are a millionaire.

Escape From Debt

We will discuss some innovative and clever ideas for escaping debt in a later post. The kind of debt you want to escape from is debt that you cannot service. If the repayments on your debt are unmanageable, then whether the debt is based on consumer spending, business or investment, you will be highly motivated to escape from its iron grip. However, if you owe millions of dollars and you can make the repayments then you are not only financially independent, but also very wealthy.

Administrator General Topics 10 Key Motivators for Financial Independence, Escape From Debt

Working for an employer is a sink down which a very large part of your time will disappear. Perhaps you enjoy your job. Maybe showing up at work every morning is a positive joy. Then why are you reading this blog? Enjoy it or not, in all likelihood you are a “wage slave”. Wage slaves have to report to work at a time prescribed by their employer and remain at their workplace until another time prescribed by their employer. For many people, freedom comes at weekends and for one brief 2-week vacation once per year.

Life in the Employment Penitentiary

This discipline extends throughout the average person’s working life. It often starts at age 16 and, for those who are “fortunate” enough to avoid downsizing, redundancy and other unnatural disasters, goes on until age 65. That is a period of 49 years of incarceration in the working world. The average person may expect to survive for maybe 10 years following retirement. If the average person has managed to scrape enough money together during their working life, that all-too-brief interval between retirement and membership in the choir immortal may bring some sampling of the pleasures of freedom.

Flexible Slavery

Some people enjoy the luxury of relaxed servitude. Schemes such as “flexible working hours” can permit wage slaves some elasticity in their terms of incarceration. But the inevitability of reporting to the workplace can only be adjusted within very tight guidelines. Wouldn’t it be nice to be the master of your own time? Financial independence means that you are no longer a wage slave. No more reporting to work at a time determined by somebody else, in exchange for money that is already committed to paying the mortgage and utility bills, taxes, car loans and other fixed expenses.

Punch Your Own Clock

For many years I deceived myself into believing that I was pursuing a career. I was doing something useful in the world. But the seasons they went round and round and grey hairs started appearing on my head. As I neared the involuntary end of my career I met a group of gentlemen who were doing something useful in the world that was peripheral to the mainstream of industrial activity. I made contacts with other people who were similarly inclined and I began to get involved in fulfilling activities that were disconnected from my role as a wage slave. In effect, I was enjoying the satisfaction of doing something useful in the world without coupling my activities to the need to earn a living. I was elated to a far greater degree than I ever experienced while working for a salary. I was using time – my time – in a manner chosen by me.

Nothing is Really Work …
Of course, substituting wage slavery with self-employment often imposes an even greater commitment of time. The difference is that the timekeeper is you. And, as the Scottish writer James M. Barrie once said: “Nothing is really work unless you would rather be doing something else.”

Administrator General Topics 10 Key Motivators for Financial Independence, More Free Time

What is your vision? Do you have a very clear idea of how you are going to build your financial independence? What is the source of your vision? Is it an overwhelming personal desire to pursue a particular course of action, no matter what? Chances are you will fail. Many businesses are started on the basis of turning a hobby or personal interest into a business. There is a fundamental business maxim against which you should weigh your vision: “find a need and fill it”. You see, other people – people who may, or may not, become your customers – may not share your passion. You may have a lifelong interest in collecting tin soldiers but, unless there are enough people who share your interest sufficiently to pay you enough money to earn your living, you don’t have a viable business idea.

Find a New Need and Fill It

But, “find a need and fill it” is only a very basic benchmark. For example, everybody has to eat every day. A lot of people like to eat hamburgers. So if you open a hamburger restaurant you will make money right? Maybe. Maybe not. Selling hamburgers is a highly competitive business. Can you outsell your competition? Can you, at least, carve enough market share to survive? It might be better to refine our maxim: “find a need that no-one else has found, and fill it.” You will at least make money until your competition catches up with you.

Baddies Wear Black Hats
If you channel your passion and redirect your vision to fill an exclusive need, your vision of succeeding in your own business may still bear fruit. Start a business that your potential customers have a need for and go home to relax with your tin soldiers in your spare time (if the business allows you any).

Tough words? Get used to it. Business is a minefield. There is no fair play. The law of the jungle applies. There are people waiting to ambush you at every turn. This is no place for dreamers. So you have a vision? Be prepared for people who ought to be your friends to walk all over your vision.

But always keep in mind there is an equally large number of people willing to help you. Wouldn’t it be nice if everybody wore a hat? Black hats for the bad guys and white hats for the good guys. Nah!

Administrator General Topics 10 Key Motivators for Financial Independence, Vision

Ground Floor Opportunity

Twenty five years ago earning a college degree seemed like a ticket to success. The first steps on the corporate ladder were a bit of a rude awakening when I learned that “ground floor opportunity” meant starting at the bottom. But after a few years my natural talents began to emerge and people noticed – people who mattered noticed. Soon there were “ground floor” people calling me “boss”. Business travel took me around the country and around the world. Life was good. Corporate credit card, frequent flyer points, fine dining in expensive restaurants.

Yes Boss
Years passed and more promotions came my way. Now people who had people calling them “boss” called me “boss”. Early career thoughts about upgrading qualifications slipped into history. I knew that I really ought to go get that part-time executive MBA degree, but my career seemed to be moving along so why bother?

Stuck Near the Top
Then the bad times came. Cutbacks, reorganizations, downsizings. I survived but my employer was beginning to look shaky. Time to polish the resume and take a look at who else might be in the market for my abilities and experience. A few interviews but no job offers. I had made it to the heady heights of middle management and was learning that the number of jobs available for people at my level was dramatically less than for the “ground floor” brigade. But worse still, competition was stiff. No recently upgraded qualifications? No chance! I was a victim of my own success; stuck in a dead-end job with no escape route and my predicament was all of my own making.

How to be the President!

I knew I had the ability, experience and ambition to make it to the top. I looked very carefully at the company for whom I worked. How did the man at the top make it? How did he get there? The answer was very simple – he started the company and built it into a national corporation of which he was the president. My way forward suddenly seemed very clear.

Administrator General Topics 10 Key Motivators for Financial Independence, Dead End Job

Threaten Them with a Gun!

So you think you are underpaid? So does everybody else who works for somebody else. If you are a member of a union you are subject to a collective agreement. When your contract comes up for renewal your union will put a gun to your employer’s head and threaten him with deliberate and planned disruption of his business unless he agrees to the union’s demands. Your employer will be highly motivated to automate your job out of existence, or move it to another country where he can lower his labour costs. Believe it or not, workers in some other countries are very grateful to receive a paycheque from a western industrial corporation seeking relief from escalating labour costs. While your union may view your employer as a source of corporate social assistance, your employer has an entirely different perspective.

If you are a non-unionized employee, your payscale is more likely to be based on merit. However, what you think you merit and the value your employer places on your efforts may be poles apart.

What Did You Do for the Bottom Line?

It is very easy – when you are the employee of a big corporation – to develop earnings ambitions that exceed your value to your employer. Don’t misinterpret that last sentence. You may be a highly productive and popular employee, but exactly how much do you contribute towards the bottom line? Did you directly make sales that increased the gross revenue of the company? Did you directly influence cost savings that improved the profit margin? Yes? Can you quantify that? Are you able to take sole and direct ownership of a measurable revenue improvement or cost saving? If you can put a hard number against your achievement you may have a claim to earning a tiny fraction – lets say 5% – of that number in compensation. That will be your impact on the bottom line – your contribution to your employer’s net profit.

Here is a key thing to remember:

Employers do not hire workers to maintain the workers’ standard of living. Employers hire workers to perform a job and seek to compensate them at no more than the fair market rate for the work they perform.

You Are Worth Exactly What You Make Now!
In real terms, you are worth exactly what you are earning right now. If you disagree then do something else that will earn you more. Get a higher paying job – if you can. Or, go work for yourself. If you choose the latter option you will face the cold, hard reality that you will eat tomorrow what you produce today. If you really have what it takes you may substantially improve your income.

Administrator General Topics 10 Key Motivators for Financial Independence, Higher Income

Wage Slave!

Perhaps the single biggest motivator for people seeking financial independence is the fear of losing their job. Once we become accustomed to being “wage-slaves” we build our personal economies on an income stream that we take for granted. Our outgoings (perhaps including savings contributions) expand to absorb the entire amount of our income. Take away that income and our personal economies collapse very quickly.

I was once a wage-slave. I recall, very vividly, the sudden end of the income stream that I took for granted. There were signs of course. Secretive meetings between human resources staff and my manager, re-organization plans, rumours. My employer’s business was performing poorly and all the staff were alert to signals that the Sword of Damocles might be hanging over their own head.

The Beginning of the End

One day I was called into my manager’s office where a human resources staffer was sitting alongside him. The pronouncement of my “termination” was clinical, emotionless and short. In the space of a five minute encounter my career was over. More importantly, my income was gone. The mental torture was almost intolerable. It is very easy to make plans for your future when that future is secure. It is very difficult to calmly gather your thoughts and make plans when your future has been unexpectedly and painfully snatched away.

The End of the Beginning

After a couple of layoffs during a downturn in the industry in which I worked I knew I had to have a plan. I re-organized my finances, paid down my debt and developed a strategy to insulate myself from the usually devastating effects of job loss. The last time an employer laid me off was a very different situation. My boss was a nervous basket-case as he handed the sentence of termination to me. I consoled him with re-assuring words and whistled as I left with my final severance cheque.

Administrator General Topics, Uncategorized 10 Key Motivators for Financial Independence, Fear of Losing a Job, Wage slave