It would be remiss for me to have a blog that deals with being as liberated as humanly possible without at least touching on the concept of financial freedom and what it means for your quality of life. I’ve found it’s an exceptionally touchy issue for people whom have accrued a substantial amount of debt with the justification being that’s “what it takes to live the American Dream”.
It’s YOUR American dream.
Now I’m not saying you shouldn’t do what it is you love, or not work your hardest for things you wish to obtain, but ask yourself if it’s really what YOU want? And if it is something you want, what’s the most efficient way of getting there? Sometimes the path less traveled is the best route.
Your ‘passions’ can and sometimes should change.
Since I was in 5th grade, and up until I graduated high school, I wanted to be a song writer. I would lose myself in music and constantly be writing when I should’ve been paying attention in class. School was the last thing on my mind, let alone going to college. I did just enough to scrape by, quitting all of my advanced classes so I didn’t have to do the hard work, and barely did homework. I still managed to graduate (something that is becoming increasingly too easy to do, but I digress) and found myself stuck in what I wanted to do with my career. I loved music, but why did I need school for that?
Deciding to be what I thought at the time was practical, I enrolled at Full Sail University in pursuit of an audio engineering degree. I had my $500 deposit submitted and was on the verge of signing a $40,000 loan. One of the best decisions my 17-year-old-self made was to walk away at the last moment.
At the time, music was everything to me, but I realized what I was doing was wrong. I was giving into the conformation of society in believing this is what I had to do to be successful, and the bank was ready to lend me a huge load of money to reinforce that belief.
Now, nine years later, I am without a degree, happy, and virtually debt-free. I can’t say I’m at all the same person as I was when I graduated high school, and it’s a shame that when we’re not even old enough to drink we are expected to know who we are and are enslaved in debt to justify it.
Student loans are everyone’s problem
At the time of this blog post, student loan debt in this country has hit $1.4 Trillion . This amount has passed credit card debt, and is one of the contributing factors in the slow economic growth since the recession of 2008. Just a generation ago, college was a place that was affordable for those who were willing to work for it. In 1973, the cost of college per year was around $2,500 dollars for public schools and $10,000 for private schools.(http://www.bestcollegesonline.com/blog/a-timeline-of-college-tuition/). Many people from this generation could and had paid their college tuition off while attending school with a part time job. For the price of a public university today you could’ve gone to a private school forty years ago. With the rate of inflation and cost of living going up grossly out of proportion with average income, a college education may not be the best route for everyone.
https://www.youtube.com/watch?v=5-r76XfImTc
“Okay, we get it, college is expensive, but I need a degree to get a good job!”
While of course this is the case for all of the lawyers, doctors, and scientists out there (which, hopefully with the advance of technology and free learning platforms, it soon won’t be), but if you enter a field of study knowing you wont make enough to cover your expenses, or are in a field of study with low job demand, can you really blame “evil” capitalists for your lack of living standard? There are many trades available that offer great incomes to people that are in high demand. And even STEM field jobs like software engineering are open to people who are self taught or attending a coding school. You don’t need to get into debt to learn, it’s 2017.
Not Everyone Should Own A House
One thing that is hammered into the brains of us Americans is the absolute necessity that we own homes, and that we all are entitled to. I don’t think I need to bring up 2008 and all of the subprime mortgages that were given to people who couldn’t afford them, but were still told they could and it was part of living in America (Well, I guess I just did–oh well). Sure, there are some tax deductions and benefits of owning a home, but there are many expenses and issues of liquidity that go along with it. There are plenty of ways to get involved with real estate without selling your soul to a bank. I myself invest in Real Estate Investment Trusts, or REITS. This allows me to invest in companies through the stock market that purchase properties and pay out high dividends. This way I can have real estate exposure without the headache and liquidity issues.
You are not throwing money away renting.
I hear this argument all the time when I talk to people about renting an apartment instead of getting a mortgage. The notion that I am somehow throwing money away is a straw man argument when you think about it. First of all, a place to live is a basic human need. You wouldn’t hear someone say “Why are you throwing money away buying food?” Renting is a guarantee that if something goes wrong in the place you are living in that wasn’t caused by you, it isn’t your responsibility to pay for or fix it. Also, depending on where you live, the housing market is just as over-valued now than it was before the crisis of 2008. This means that homes in areas near me such as Miami are 2-3 times more expensive than they are worth. This means that there always has to be a greater fool buying what you are selling to pay more. I’m not comfortable with trying to time the market on how much more these homes will go up before a correction. And because no one can time these things, neither should you. If you are looking to purchase a house with cash, or are planning on being there long-term and have little debt, then I would say go buy a house. For a very large portion of the economy, this is not as feasible. Besides, if you think that you ever really own your house, try not paying your property taxes.
You don’t need as much money as you think.
Many people have an idea in their head that they need to hit a million dollars or more as their net worth in order to be financially free. If you sit down and do the math you’ll find that if you add up all your expenses in a year, multiply that by 25, then invest that into a simple S&P index fund, you’ll have enough money to retire comfortably. This is one of the best pieces of advice I have ever gotten, and has allowed me to focus on a ‘set it and forget it’ budget while enjoying life’s freedom.
Get out of the rat race.
Does that new car, house, shoes, watch, or phone really make you a better person? Is it worth spending the money you could be using for experiences and freedom from the daily grind on frivolous material goods everyone has and will soon be out of style?
“We buy things we don’t need, with money we don’t have, to impress people we don’t like.” – Dave Ramsey
If you really want to experience the feeling of liberation, let go. Let go of the things you can’t take with you when you die, let go of toxic relationships that don’t serve you or the other person, let go of limiting beliefs in yourself or how you compare to other people, and let go of trying to prove yourself to anyone. The ultimate goal for all of us is to live a fulfilled life, don’t spend it on anyone else’s terms. Be You. Be Free.
Ryan Johnson
BONUS: How To Retire Early
bing took me here. Thanks!