I’ve been on both sides of this hump. It’s a sick irony that life is most expensive for those who have the least money. High interest debt, payday loans, overdraft fees, etc. The ways that our society stomps on the least fortunate cruel and unrelenting. In my early twenties I was living on credit cards, trying to bounce between 0% offers and avoiding fees as much as I could. A single parking ticket felt like financial ruin.
On the flip side, money starts to come EASY to those who have money. Fees are waived, welcome bonuses are offered, and best yet, investing starts to make money. Instead of struggling to make rent, you can OWN properties that GENERATE rent. Wealth sitting there doing nothing (in a high yield savings account or an investment like an index fund) makes even MORE money. In my 40s, as a millionaire, money just seems to flow to me with less effort than ever.
I’m not here to endorse this system. I actually think it sucks. But I do want to help you navigate it. If you’re on the left side of the hump, the best way to improve your financial life is get to the right side as FAST AS POSSIBLE. If you hang out there, it’s inviting a lifetime of financial struggle.
Climbing that side is hard. Climbing faster will be even harder. But avoid the temptation to give up and slide back down. Dig deep and stay consistent! HOW? You probably know many of the answers already. but it’s things like this:
• Pay off high interest debt as fast as possible
• Reduce housing expenses (cheaper place, get a roommate, house hack, etc)
• Never lease or buy a new car
• Get maniacal about frugality. Buy everything used, sell everything you’re not using.
• Pick up extra shifts or overtime
• Start a side hustle
• Grow your career, switch jobs
None of the above is comfortable or easy. It sucks. But if you embrace the suck, and get past the painful climb, you can start to ski downhill. Cash buffer. Investments making money. Early retirement. Get there ASAP or you could be stuck on the cold side of the mountain forever.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
