OP 05 May, 2023 - 10:50 PM
(This post was last modified: 05 May, 2023 - 10:59 PM by Stradius. Edited 2 times in total.)
The Rat Race seems to be conflated with working a 9-5 job. It’s often used to guilt those who have a disliking towards their jobs into purchasing a course, program, or something of that nature.
A real rat race isn’t about working a 9-5 job, it’s about living on a financial edge. Such that your greater life goals and ambitions are placed in the background as you continue chasing the next paycheck, or material possession.
Our relationship seems with money is often as follows: it enters our life, and it leaves. Sometimes this is expressed as your income and expenses, but I think a better way of framing this is your production vs your consumption.
For most of us, we have an issue with consumption. And when fixing this, it may be best to first draw an awareness to yourself as a consumer. Using a budget and tracking your expense is the best way of starting. A common strategy in personal finance is building an “emergency fund”, a fund that holds 3 – 6 months’ worth of expenses – enough so that if an emergency were to ever occur, you wouldn’t have a problem financially supporting yourself through such an occasion.
Production is then about increasing the amount of value you can bring to a society. People are paid in proportion to their perceived value in the marketplace, and one of the best ways of increasing your perceived value is by solving a problem in the market, then selling this solution through a business at scale. This is the entrepreneurial route. And whilst most of us will be able to produce value into the market by selling our labour in the form of a 9-5 job, this doesn’t mean our ability to produce stops there.
YouTube channels like Graham Stephan, or Dave Ramsey are great for learning about personal finance, and reducing your expenses. But these people don’t rely on cutting coupons/living frugally to be making millions. They are utilising a means of production at mass scale. Graham Stephan uses YouTube as a vehicle to produce finance videos at mass scale.
Financial literacy: Most schools don't teach financial literacy, which is the knowledge and skills needed to manage your finances effectively. Without this knowledge, it can be difficult to make informed decisions about money and build wealth.
Investing: Many people don't understand the power of investing and how it can help them build wealth over time. Schools often don't teach the basics of investing, such as how to invest in stocks, bonds, or real estate.
Entrepreneurship: Schools often focus on preparing students to work for someone else, but they rarely teach about entrepreneurship. Starting your own business can be a powerful way to break out of the rat race and achieve financial freedom.
Budgeting: Managing your money effectively starts with budgeting. Schools may teach basic math skills, but they often don't teach students how to create and stick to a budget.
Mindset: Financial success requires a certain mindset, such as being disciplined, taking calculated risks, and being willing to learn and adapt. These skills are not typically taught in schools.
Debt management: Many people struggle with debt, but schools often don't teach students how to manage it effectively. Understanding how to pay off debt and avoid accumulating new debt is essential for achieving financial freedom.
The importance of multiple income streams: Relying on a single source of income can be risky, especially in uncertain economic times. Schools may not emphasize the importance of having multiple income streams, such as through investments, side hustles, or passive income.
A real rat race isn’t about working a 9-5 job, it’s about living on a financial edge. Such that your greater life goals and ambitions are placed in the background as you continue chasing the next paycheck, or material possession.
Our relationship seems with money is often as follows: it enters our life, and it leaves. Sometimes this is expressed as your income and expenses, but I think a better way of framing this is your production vs your consumption.
For most of us, we have an issue with consumption. And when fixing this, it may be best to first draw an awareness to yourself as a consumer. Using a budget and tracking your expense is the best way of starting. A common strategy in personal finance is building an “emergency fund”, a fund that holds 3 – 6 months’ worth of expenses – enough so that if an emergency were to ever occur, you wouldn’t have a problem financially supporting yourself through such an occasion.
Production is then about increasing the amount of value you can bring to a society. People are paid in proportion to their perceived value in the marketplace, and one of the best ways of increasing your perceived value is by solving a problem in the market, then selling this solution through a business at scale. This is the entrepreneurial route. And whilst most of us will be able to produce value into the market by selling our labour in the form of a 9-5 job, this doesn’t mean our ability to produce stops there.
YouTube channels like Graham Stephan, or Dave Ramsey are great for learning about personal finance, and reducing your expenses. But these people don’t rely on cutting coupons/living frugally to be making millions. They are utilising a means of production at mass scale. Graham Stephan uses YouTube as a vehicle to produce finance videos at mass scale.
Financial literacy: Most schools don't teach financial literacy, which is the knowledge and skills needed to manage your finances effectively. Without this knowledge, it can be difficult to make informed decisions about money and build wealth.
Investing: Many people don't understand the power of investing and how it can help them build wealth over time. Schools often don't teach the basics of investing, such as how to invest in stocks, bonds, or real estate.
Entrepreneurship: Schools often focus on preparing students to work for someone else, but they rarely teach about entrepreneurship. Starting your own business can be a powerful way to break out of the rat race and achieve financial freedom.
Budgeting: Managing your money effectively starts with budgeting. Schools may teach basic math skills, but they often don't teach students how to create and stick to a budget.
Mindset: Financial success requires a certain mindset, such as being disciplined, taking calculated risks, and being willing to learn and adapt. These skills are not typically taught in schools.
Debt management: Many people struggle with debt, but schools often don't teach students how to manage it effectively. Understanding how to pay off debt and avoid accumulating new debt is essential for achieving financial freedom.
The importance of multiple income streams: Relying on a single source of income can be risky, especially in uncertain economic times. Schools may not emphasize the importance of having multiple income streams, such as through investments, side hustles, or passive income.