In a recent TV show, I watch a case study where a girl in Hong Kong is spending over 70% of her take-home pay for rent. In another case, a delivery person works 12 hours a day, every single day to make a decent living. They both expressed that they felt tired and trapped. If they were to come to me, how would I coach them to get out of the rat race?
The first thing you should do is to have a desire to get out. Plus you should understand that getting out is completely doable.
Step 1: Get into the right job
The first step in getting out of the rat race is to find a job that has a build-in advancing mechanism. Jobs that require mastery in your skill so you can make exponentially more as you get better. For example, as a software developer, you will get better as you work. Over time, as your skill improves, your pay also naturally improves. Professional jobs have this feature built-in. Many blue-collar jobs, such as electricians or hairstylists also have a build-in advancing mechanism. In these jobs, experience matters.
If you are in a job where experience does not matter, like dishwashing, you have to get out. I will argue that delivery does not offer a build-in advancing mechanism. You may be marginally better at delivery offer time, but I do not see how someone becomes an Advanced Deliverer and be paid a lot more.
Do not spend years working at a job that does not provide ways to advance.
Step 2: Invest
Once you are in a job that provides a build-in advancing mechanism, the next step in getting out of the rat race is to invest. Investment takes two forms. You need to invest financially as well as invest in yourself.
If you are in a job that you love, you should focus on advancing in your current job. Create a habit of investing financially. However small, set aside some money and put them into an investment account. You do not need to be a financial expert to invest, but it’s important to start early. This is particularly true if you want to stay in your profession for a long time. You spend most of your energy working and advancing at your job. Let some money work for you on the side.
The other path is to invest in yourself. If you ever want to get out of working 9-5, you need to invest in yourself. As you advance in your job, you should think about what you want to do next. Do you want to get into a better profession? Do you want to start your own business? Either way, you have to invest in yourself. Find an area that you are passionate about and start learning. Investing in yourself is the best kind of investment. No one can ever take that away from you.
As you make more money, you need to start planning for your future.
Step 3: Control your expenses
The final step in getting out of the rat race is to control your expenses. Many people think as you make more money you get to a point that you don’t have to worry about money. That is absolutely not true. Ever read stories about lottery winners went bankrupt just a few years after they won the lottery? You DO NOT get out of the rat race by having money. You get out of the rat race by knowing how to keep your money.
As you make more money, you need to decide for yourself how much money you should spend. I do not suggest people go to the extreme in saving money. You deserve that vacation. You deserve that new gadgets. I once get on TV talking about tech toys so I am the last person to advise people to not spend money on toys. However, “toys” takes on many different forms. A $300 headset is a toy. A $300,000 car is also a toy. You have to decide which level of toys you should stop at. There is never enough. You have to be in control.
I have not had to worry about money for a few years now. I enjoy financial freedom not because I have a lot of money, but because I am in control. A few years ago my wife and I decided we will not continue to expand our living standard. As our friends start buying bigger houses, we stayed in our current house. As our friends buying boats and yachts, we stay put. As a result, we are free.
Do you want to be financially free? Let me know if I can help.