Taking money for granted is easy to do when times are good. After a global pandemic, perhaps we are much more appreciated of money!
I considered my paycheck to be “endless money.” Every other week I got paid for a service that I provided a company. Given I saved the majority of it, I began to treat money as if it were an endless supply. I devalued money because I only used a minority of it.
It's hard NOT to take money for granted when it's come to you for so long. For example, how many of us are truly thankful for the food we get to eat everyday? If I was, I wouldn't have seen a 10-12 pound weight increase since college. How many of us reflect on the fact we have hot water everyday? If I did, I'd probably take an occasional cold shower just to be thankful.
A sabbatical is a great time to reflect on what we want to do in life and how much money is enough to be happy. I've highlighted from previous posts that anywhere from $3,000-$15,000 a month is enough, depending on the size of my family. Now I'm curious to discover whether this range is truly the case.
Stop Taking Money For Granted
I was planning on dumping my entire free liquidity into the structured notes I wrote about earlier until I realized one thing. There's a very good chance that I won't have this type of liquidity next year. I never really had to budget my budget. So instead of investing the entire sum, I invested 80% of it and kept the rest in a money market account just to be safe.
If the money well finally runs dry I plan to:
* Withdraw all future and accumulated CD interest income. All CD interest income is yours to use without penalty. I've just been reinvesting the proceeds for the past decade.
* Utilize rental income for living. After almost 10 years, rental property income is highly positive thanks to inflation and mortgage refinances.
* Work harder. I know I can always work harder because I'm hardly ever stressed out anymore. I remember studying for five hours a night after class. I remember working 50 hours a week and spending another 25 hours a week for my MBA. Now it's just typing some thoughts online How easy is that? My body is relaxed and no longer has tennis elbow or lower back pain.
* Get a job, any job. If it comes down to survival, I'm not too proud to take any job. When your first real job is making egg McMuffins at McDonald's for $3.25 an hour, there is no job beneath you.
Underestimating The Amount Of Time Worked
My father asked me one day, “Sam, are you sure you aren't underestimating the amount of time you work online?” He was concerned, because despite telling him I was on vacation for a week, article after article kept appearing on Financial Samurai and Yakezie.com.
I told him, “Perhaps, but it's hard to tell because I don't mind the work.” I recalled how many hours I spent a day on vacation “working”, and the total came out to be roughly 2 hours a day. About 1.5 hours from 6:30am to 8am before breakfast, and 30 minutes in the evening checking up on things.
Working harder is a privilege, since at some point, my mental capacity will fade and I will no longer be able to communicate in a coherent manner. Everything disappears over time, and it's up to us to make the most of what we have.
Change Is A Stressful Feeling
When you've budgeted so long by operating freely in the confines of your budget, it's strange to change. Although my savings and investing schedule was automatic, I got to do whatever I wanted with the remaining 30% of after tax income every month. I felt entirely free to do as I pleased.
With a large drop in income, I've got to re-strategize. Plenty of people make due with less, so I'm not complaining. I just need to mentally overcome the fact that I will no longer be saving or earning as much anymore.
Does increased freedom truly make up for a drastic drop in income? I'm not so sure, because I felt pretty free when I worked. Nobody told me what to do really and I could take vacation pretty much whenever. So in a way, the people who appreciate not working the most perhaps are the ones who were the most miserable during work.
Don't take money for granted, because it may eventually run out!
Update 9/18/2017: Money has miraculously not run out for me. FinancialSamurai.com has grown to over 1 million pageviews a month and is generating a healthy income five years after I left my job. I've been able to build a strong brand online, develop good business partnerships, and take advantage of the internet. I suggest everyone start their own site today to at least brand themselves online.
Update 4/4/201: FinancialSamurai.com continues to hum along at around 1.25 million organic page views a month. The site brings in a healthy income. Further, our passive income has grown to about $300,000 a year. I've been diligently reinvesting 50% – 80% of my after-tax online income every year.
RESOURCES FOR A BETTER LIFE
Manage Your Finances In One Place. The best way to build wealth is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 28 different accounts (brokerage, multiple banks, 401K, etc) to track my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing, how my net worth is progressing, and where I’m spending my money.
The best feature is their 401K Fee Analyzer which is saving me over $1,000+ a year in portfolio fees I didn’t know I was paying. The future is never going to be certain. But at the very least, we can stay on top of our money so we’re prepared for whatever comes at us. Personal Capital only takes a minute to sign up and it’s free. No other tool has helped me reach financial independence more than Personal Capital
Negotiate A Severance Package. Never quit your job, get laid off instead if you want to move on. Negotiating a severance package provided me with six years worth of living expenses to help me focus on my online media business. Check out my book, How To Engineer Your Layoff: Make A Small Fortune By Saying Good-bye. The book is in its 5th edition and provides solid strategies for how you too, can escape a job you hate with money in your pocket.