In a perfect world, folks would have a clear idea of their finances. We’d all face up to our money – or lack of it – regularly and dispassionately. But the world is not like that. We’re not like that.
Money creates enormous roadblocks in people’s lives. Too little of it is an obvious problem, but too much can be destructive as well. It’s part of my journey to figure out how to place money in its proper place in our lives, in my life to start, and hopefully others thereafter.
A few thoughts: One, there are way too many people in America who live from payday to payday. Secondly, way too few people have any kind (let’s underline that) any kind of savings. Thirdly, most of these people have no plan to change either of these predicaments. Hope and, well, more hope is their preferred tactic.
This will not work.
On the basis that the way you think is more important than anything, we need to find a new way of thinking about spending, saving, debt, rainy days and the most important element, our incomes. My thinking is to create recurrent income separate from your wages or salary, growing the passive income to eventually supplant whatever you make from your job. That’s what I’m doing.
But you need not follow my plan to the end to make a difference. Creating even a small amount of recurrent income can make a lifetime of difference, and here’s an illustration:
I Tweeted earlier that in the next forty years I’ll spend more than $30,000 dollars on electricity. That figure will be way under, because I simply multiplied my current bill by 480 months. Inflation, increased energy costs and who knows what else will almost certainly make that much, much higher.
Now imagine if you created $65 per month of recurrent income for yourself. You would never have to worry about paying the electricity bill ever again, which would be a relief to many. And the money from your salary that would otherwise go to paying the electricity bill could be used for something else. Saving for emergencies for example, reducing the principal on your mortgage or adding to whatever retirement arrangements you have.
$65 dollars per month, $30,000 dollars overall, and that’s before compounding. Small change, big outcome.