Here in North America there is this lingering theme of “living the dream” and “having financial freedom” but what’s interesting about these ideas is most people are not taught how-to be successful at these things when they are young. The people whom we are taught and mentored by never seem to talk about business, financials and investing.
I came from what was assumed to be a middle class family, with a middle class home of 1,800 square feet with two parents whom worked their 9-to-5 jobs and raised their three children. Like other families we went camping in the summer and skiing in the winter. We had food on our tables, nice clothes on our backs and all the various toys and athletic gear three boys required.
Our parents always fought over money, how the house looked and what needed to be paid for each month; utilities, mortgage, car payments etc. For myself as a kid this seemed like an overburdened weight my parents had hung around their necks by having children and things.
As I grew older I realized more and more I didn’t want kids or the burdens of life by owning a home, having a car, or other things. I really liked the idea of being able to have just enough. A few pairs of shoes, a couple pairs of shorts, a few shirts and a couple baseball caps. I tried to be as little of a burden to my parents as possible. And started working at the age of 12.
Trying to be a minimalist at age 15 is tough but the fundamentals of “living the dream” and “having financial freedom” were concepts far far away from this middle class lifestyle we were living within.
Eventually I graduated High School and was sent off to the local college. Where I found this wonderful thing called: credit cards. They were giving them away like candy and sometimes even with candy! I managed to acquire a Visa, Mastercard and Discover card within my first summer at college. Ironically I didn’t have a job. But I was given credit.
This was not a good start to “living the dream” or “having financial freedom” but it was a great start at obtaining debt and building a mountain of impossibilities around me. Not one person really cared to say hey stop this is a bad choice! you are too young for a credit card!
“Here is an equation worth remembering: Five dollars earned minus seven dollars spent equals an unhappy life.”Jon Morrison
Over the next couple of years, I drove my credit cards up to their maximum limits ($1,500, $2,500 and $3,000) then had to make small payments up to $100 per month to bring them back down. By the time I realized what had occurred I was going to be in debt for the next couple of years whilst clawing my over this perpetual mountain.
Eventually, I found myself a better paying part-time job and began working on paying down the two high interest rate cards: Visa (24.99% APR) then Mastercard (19.99% APR). The mountain was maxed out at $7,000.00 dollars tall except that meant there was an additional couple grand in interest. One day my statement said “if you made minimum payments each month it would take you 36 months to pay off your credit card!”
I read that sentence, over and over, and over again, and again!!
THIRTY SIX MONTHS OF DEBT!!!
There had to be a better way to pay off this mountain of debt?
I searched long and hard, then picked up a second part-time job with a higher starting salary. After a few weeks of working at the pizza shop, I found a loop-hole which could be exploited to my advantage and get some extra quick cash in my pockets. Then play off that Visa card in a few weeks rather than a bunch of months!
A fool’s plan emerged and the person starring back at me in the mirror knew the scheme was illegal and if caught I’d pay another kind of fine, one more than likely behind bars. But hey… I had to get out from under this debt. And at the time I was willing to take the risk.
The risk paid off.
Within a few weeks I had accumulated just under $3,500 and paid off the Visa and most of the Mastercard. Then the scheme came to a screeching halt! Someone had ratted me out. I must have had a double horseshoe stuck up my butt, because the person who should have been pressing charges against my young self decided not to press charges.
It took weeks to learn why, my boss did not press charges. In the background my boss, was also making a scheme. But theirs was high-stakes compared to mine. They had been skimming off the books for several years and they took the pizza shop for almost $20,000.00!! Because they too, were trying to “live the dream” but found themselves in a mountain of debt.
Financial debt can turn YOU into the worst version of yourself.
A few months after the above rolled through my town, another lucky break occurred. One of my grandparents whom I was not really close to passed away. And with it I received a nice piece of inheritance. Easy money should have been placed in a trust and left in the stock market for safe keeping in forty-years.
A dollar spent is twice as expensive as a dollar saved.Craig Baker
HOWEVER without any guidance, I cleared out my debts, sold my car and bought a Ford F150 with 35″ tires, a 3″ lift and a 450 Cleveland engine. At the snap of someone’s fingers I went straight back into debt. The worst thing I didn’t even recognize it was happening.
The mountain gave way and slid right back into place. Credit cards were nearly paid off after 18-months but the $8,000.00 truck put me over where I had started!! AAAAAAGH FAWK!!
A few months later another bad break in the unlucky department occurred when my driver’s license was suspended after being pulled over for speeding. Within another month, the sweet truck was sold for $8,500.00 and again I paid off my tab.
Financial burden always followed me around as I went college to college racking up on student loan debt. I was doing it as a willing participant to please a middle class family whom saw a 4-year college degree as the way into “living the dream” and eventually into “financial freedom”. What they didn’t realize is this pressure to be in college really only amounted to more and more debt being accumulated. And instead of being in and out in four-years, my education lasted six-years.
Credit card debt of $7,000.00 was not even close to what I had racked up attending college. My college loans sat just over $50,000.00 and that’s when I shrugged my shoulders and looked back into the mirror at myself and said, “$500 per month will take 100-months to pay it back without interest! Or you have to find an alternative and that my friend is not going to be a pleasant adventure!”
Twenty-five years later, I discovered through reading financial books the one thing someone could have simply taught us way back in High School is one simple rule: Always Pay Yourself First!
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