I havent been around much in the past year or two, but this topic is near and dear to my heart.
I am 30 years old now, and have been working the same job since I graduated college back in 2004 (roughly 8.5 years now). I have done well in my career, and have advanced to a low 6-figure salary pretty quickly (something that was once a HUGE goal of mine). My job paid for 100% of my MBA, and just recently, I was accepted into a program to have 100% of my undergrad student loans whiped out (so 11 months from now at the end of 2013), I will have NO student loans and my 6-years of higher eductaion will be paid for in full.
Amongst most of my friends, I used to feel that Ive done okay for myself. I have job security, and I am very blessed to have been given a job opportunity back then that would allow my income to increase so drastically in only 8 years.
That being said, I am miserable, and here is why;
There are ALL sorts of things that tie you to the rat race once you get on that hamster wheel, and once you start running, it CAN BE VERY DAUNTING AND DIFFICULT TO JUMP OFF!!!
By saying difficult, please note that is NOT just related to "motivation" or "desire" to leave! (because I fully believe that if you want something bad enough, NOTHING is impossible). It means that just like a fastlane success story, it is difficult, and it requires PROCESS to escape from it. It is related to all of the things that end up TYING you to that hamster wheel, which can be a financial crutch for years to come.
My mistake? Shortly after I graduated (1.5 years actually), I decided that the BEST thing I could do for my financial future was buy a house. Anxious to show off my new $50k salary back then, I began shopping for houses and was sure that with my GF assisting with the mortgage payments and bills, I could buy one.
Unfortunately, this was late 2005/early 2006, and after closing on a house that (at the time), I could barely afford the mortgage payments on, I realized how dependent I had INSTANTLY become to my job. (I had bought into the hype that it was "for the best" to "stretch" a little for your mortgage payment, as your income would grow into the payments).
As I watched my checking account drain to zero every month just to cover the bills on our house, I realized what I had gotten myself into. When I had been making $50k while living in a cheap apartment, I had disposable income out the whazoo! I bought chrome rims and an expensive full engine rebuild on my sports car, I bought expensive watches, expensive clothes, began to eat out with my GF almost every night, etc. (for a 23-year old, I felt like I was living the dream!). But with my name on that mortgage agreement, I had now promised that $2300 of my income every month would have to be allocated to my mortgage payment. And that meant, I had now raised the bar significantly as to "how much money I needed to sustain my lifestyle", if I had any plans to leave my job.
Just like MJ's video regarding "whether your financial plan discloses its side effects", I can tell you, MINE DIDNT! I had thought buying this modest house (which 7 years later, I am still living in today) was the best decision I had ever made. I was sure that after buying it for $275k, it would only be a few years before I'd be selling it for $325k and moving into an even bigger one!
But something happened...something I and many of my other friends had chosen to ignore....and it happened only MONTHS after I had closed on my shiny new house in NJ....
The US housing market....CRASHED!
Instantly, that dream of selling my home for $325k went up in smoke. Instead, I was now told I'd be lucky to break even. Within a few months, I was told the market value of my house had fallen about 25k below what I had paid for it.
A year later, that number fell to -$50k.
2 Years after that (and hundreds of thousands of foreclosures/short sales later), I was now about -$75,000 in the red.
NOW, instead of just being tied to a mortgage payment that I could walk away from by selling the house, I was now tied to a DEBT on an assett I was upside down on! My friends that had all thought I was "lucky" to be able to have bought a house at such a young age, all began to feel bad for me. I watched younger friends enter the housing market and be able to buy BIGGER and NEWER houses than mine (at LOWER interest rates), while I owed $270k on a house that was now worth roughly $190-$200k.
Now, as the years went on, something very unusual began to happen...
I found that I was DEPRESSED, and I realized that (unlike my pre-concieved notions from my 4-years of college), my salary no longer had any bearing on my happiness!
I found myself tired all the time. I found that staring at a computer screen for 9 hours a day drained me emotionally, to the point where when I came home, all I wanted to do was watch TV and unwind. I was fatigued and felt lethargic all the time. Weekends became my "paycheck" as MJ said, so that I could reset for 2 days before it all started again on Monday. I continued to gain weight consecutively EVERY year, to the point where I became very embarressed at the thought of running into ANYONE I hadnt seen in a while. I realized that during those 9 hours a day, my employer really was getting my best work, and I was slowly letting my fastlane dreams dwindle away...
And just like MJ had warned us about, I noticed the same thing happening to alot of my friends. Only for them, it wasnt just about being upside down on their house.
They were tied to their job for other reasons as well... Such as:
-Getting married (huge debt and expectations)
-Getting divorced (huge debts and alimony)
-Having kids (huge increase in their household expenses)
-Buying cars they couldnt afford because they wanted to fit into the "young executive" lifestyle... You know the cars....entry level BMW 3-series, Infinity G35's, Mustang GT's, and 2-year old Corvettes. Car payments, car payments, car payments.
-Taking on credit card debt they couldnt afford, buying the same stuff I had trying to fit into that "facade of wealth" that MJ talked about....nice watches, closest full of dress shirts and designer jeans, and jewelry for their girlfriend so that they could show off amongst their friends...vacations...engagement rings...trips to Vegas...limo rides into NYC...
All of this meant one thing, I (and most of my friends) discovered we NEEDED that salary to sustain that lifestyle! For me personally, I wasnt a big spender, so I was fortunate to stay out of "most" of the other debt I talked about as I avoided that car-payment/fancy vacation/facade of wealth lifestyle. (I also didnt get married and have kids between 24-28 like 90% of my friends). BUT, I did tie myself to my house. And in a state where it is impossible to walk away from a foreclosure without the bank coming after you for the difference, I knew that I had some rough years ahead of me to get it paid down, so that I could essentially "reset" the clock and start anew.
Is it impossible to break into the fast lane once you have entered the rat race? Of course not, people do it all the time. Otherwise there would be no entreprenurial success stories by anyone married, with kids, or over the age of 30! (in fact, in an effort to ACCELERATE getting out of the debt on my house, I have been trying to do just that). But, I can tell you that it is very daunting to get off once you start running, and I now understand why MJ and so many other successful people urge us to TAKE ACTION EARLY, because there is NO easier time than when you are young!
I hope to post an update to my situation very soon, but to give people a glimpse into my current life, I can say that although I am still in a better financial position than most, I am still VERY upside down on my house. Furthermore, I am still struggling to find motivation and ENERGY on the nights and weekends to work on my fastlane plan. Because (for the time being), Monday-Friday, 9 hours a day of my best work is allocated so that I can collect my paycheck twice a month and make that next mortgage payment.
All the best guys!
-Lightning
I am 30 years old now, and have been working the same job since I graduated college back in 2004 (roughly 8.5 years now). I have done well in my career, and have advanced to a low 6-figure salary pretty quickly (something that was once a HUGE goal of mine). My job paid for 100% of my MBA, and just recently, I was accepted into a program to have 100% of my undergrad student loans whiped out (so 11 months from now at the end of 2013), I will have NO student loans and my 6-years of higher eductaion will be paid for in full.
Amongst most of my friends, I used to feel that Ive done okay for myself. I have job security, and I am very blessed to have been given a job opportunity back then that would allow my income to increase so drastically in only 8 years.
That being said, I am miserable, and here is why;
There are ALL sorts of things that tie you to the rat race once you get on that hamster wheel, and once you start running, it CAN BE VERY DAUNTING AND DIFFICULT TO JUMP OFF!!!
By saying difficult, please note that is NOT just related to "motivation" or "desire" to leave! (because I fully believe that if you want something bad enough, NOTHING is impossible). It means that just like a fastlane success story, it is difficult, and it requires PROCESS to escape from it. It is related to all of the things that end up TYING you to that hamster wheel, which can be a financial crutch for years to come.
My mistake? Shortly after I graduated (1.5 years actually), I decided that the BEST thing I could do for my financial future was buy a house. Anxious to show off my new $50k salary back then, I began shopping for houses and was sure that with my GF assisting with the mortgage payments and bills, I could buy one.
Unfortunately, this was late 2005/early 2006, and after closing on a house that (at the time), I could barely afford the mortgage payments on, I realized how dependent I had INSTANTLY become to my job. (I had bought into the hype that it was "for the best" to "stretch" a little for your mortgage payment, as your income would grow into the payments).
As I watched my checking account drain to zero every month just to cover the bills on our house, I realized what I had gotten myself into. When I had been making $50k while living in a cheap apartment, I had disposable income out the whazoo! I bought chrome rims and an expensive full engine rebuild on my sports car, I bought expensive watches, expensive clothes, began to eat out with my GF almost every night, etc. (for a 23-year old, I felt like I was living the dream!). But with my name on that mortgage agreement, I had now promised that $2300 of my income every month would have to be allocated to my mortgage payment. And that meant, I had now raised the bar significantly as to "how much money I needed to sustain my lifestyle", if I had any plans to leave my job.
Just like MJ's video regarding "whether your financial plan discloses its side effects", I can tell you, MINE DIDNT! I had thought buying this modest house (which 7 years later, I am still living in today) was the best decision I had ever made. I was sure that after buying it for $275k, it would only be a few years before I'd be selling it for $325k and moving into an even bigger one!
But something happened...something I and many of my other friends had chosen to ignore....and it happened only MONTHS after I had closed on my shiny new house in NJ....
The US housing market....CRASHED!
Instantly, that dream of selling my home for $325k went up in smoke. Instead, I was now told I'd be lucky to break even. Within a few months, I was told the market value of my house had fallen about 25k below what I had paid for it.
A year later, that number fell to -$50k.
2 Years after that (and hundreds of thousands of foreclosures/short sales later), I was now about -$75,000 in the red.
NOW, instead of just being tied to a mortgage payment that I could walk away from by selling the house, I was now tied to a DEBT on an assett I was upside down on! My friends that had all thought I was "lucky" to be able to have bought a house at such a young age, all began to feel bad for me. I watched younger friends enter the housing market and be able to buy BIGGER and NEWER houses than mine (at LOWER interest rates), while I owed $270k on a house that was now worth roughly $190-$200k.
Now, as the years went on, something very unusual began to happen...
I found that I was DEPRESSED, and I realized that (unlike my pre-concieved notions from my 4-years of college), my salary no longer had any bearing on my happiness!
I found myself tired all the time. I found that staring at a computer screen for 9 hours a day drained me emotionally, to the point where when I came home, all I wanted to do was watch TV and unwind. I was fatigued and felt lethargic all the time. Weekends became my "paycheck" as MJ said, so that I could reset for 2 days before it all started again on Monday. I continued to gain weight consecutively EVERY year, to the point where I became very embarressed at the thought of running into ANYONE I hadnt seen in a while. I realized that during those 9 hours a day, my employer really was getting my best work, and I was slowly letting my fastlane dreams dwindle away...
And just like MJ had warned us about, I noticed the same thing happening to alot of my friends. Only for them, it wasnt just about being upside down on their house.
They were tied to their job for other reasons as well... Such as:
-Getting married (huge debt and expectations)
-Getting divorced (huge debts and alimony)
-Having kids (huge increase in their household expenses)
-Buying cars they couldnt afford because they wanted to fit into the "young executive" lifestyle... You know the cars....entry level BMW 3-series, Infinity G35's, Mustang GT's, and 2-year old Corvettes. Car payments, car payments, car payments.
-Taking on credit card debt they couldnt afford, buying the same stuff I had trying to fit into that "facade of wealth" that MJ talked about....nice watches, closest full of dress shirts and designer jeans, and jewelry for their girlfriend so that they could show off amongst their friends...vacations...engagement rings...trips to Vegas...limo rides into NYC...
All of this meant one thing, I (and most of my friends) discovered we NEEDED that salary to sustain that lifestyle! For me personally, I wasnt a big spender, so I was fortunate to stay out of "most" of the other debt I talked about as I avoided that car-payment/fancy vacation/facade of wealth lifestyle. (I also didnt get married and have kids between 24-28 like 90% of my friends). BUT, I did tie myself to my house. And in a state where it is impossible to walk away from a foreclosure without the bank coming after you for the difference, I knew that I had some rough years ahead of me to get it paid down, so that I could essentially "reset" the clock and start anew.
Is it impossible to break into the fast lane once you have entered the rat race? Of course not, people do it all the time. Otherwise there would be no entreprenurial success stories by anyone married, with kids, or over the age of 30! (in fact, in an effort to ACCELERATE getting out of the debt on my house, I have been trying to do just that). But, I can tell you that it is very daunting to get off once you start running, and I now understand why MJ and so many other successful people urge us to TAKE ACTION EARLY, because there is NO easier time than when you are young!
I hope to post an update to my situation very soon, but to give people a glimpse into my current life, I can say that although I am still in a better financial position than most, I am still VERY upside down on my house. Furthermore, I am still struggling to find motivation and ENERGY on the nights and weekends to work on my fastlane plan. Because (for the time being), Monday-Friday, 9 hours a day of my best work is allocated so that I can collect my paycheck twice a month and make that next mortgage payment.
All the best guys!
-Lightning