The Rat Race

Unfortunately, most of us are stuck in the rat race. Heard of it? If not, it's basically the trap that most of us live in. The trap is created by poor financial decisions or by not making wise investment choices. We all seem to be content with just working ourselves into old age and then hoping to have saved up enough to pay for our doctor bills when we get old. At the end of the day, being in this race usually causes depression, stress, and feelings of being trapped. Even if you are happy in your day to day life, which I hope you are, do you consider yourself truly free? If you or your significant other lost their job, would you be completely screwed, soon to be overtaken by your debt? For many people the answer is yes. So even if you are happy, you are still stuck in the rat race.

A great piece of literature on this theory and making wise financial choices is:

If you are interested in gaining financial freedom for you and your family, this is an awesome book to check out.

Basically it comes down to management. You don't have to be famous or a top CEO to retire as a millionaire. Trust me, anyone can do it. I am in the military, which is notorious for NOT making very much money, and I am projected to be worth about 3.5 million at 65. I fully intend to increase this number.

In my opinion there are three principles in personal financial matters that will make or break you:

1. Get rid of debt as fast as possible. If you are making payments on anything more than a house and a car, you need to get that under control ASAP. All of this other stuff the people like to finance(furniture, jewelry, boats, motorcycles, more vehicles than you need, and credit cards) is crushing your investment opportunity because you are losing all of your money to interest. I have yet to see an investment return that is greater than a loan interest rate. So PAY YOUR BILLS OFF.

2. Live within your means. Everyone wants to have cool cars and a big house, but wait until you are ready to get those things.

3. Diversify your investments and look for additional ways to generate income. Your inflow needs to be greater than your outflow, otherwise you are just slowly digging yourself into a pit. Especially in today's economy, don't count on putting all of your retirement in one spot. Spread it around to three or four different places. Look for something you can do on top of your regular job to generate income or do something that will spring you ahead within your current career. Stop being lazy and get ambitious. Your probably not going to win the lottery.