I Escaped Living Paycheck to Paycheck Part I

In January of 2006 I was on food stamps and my newborn baby and I were on state Medicaid. Fast forward to today: I'm a landlord with three properties, I vacationed in Iceland this year, and I'm taking delivery of my new Tesla in a few weeks.

How did I do it? Here are the top three things I think anyone can and should do to build wealth.

1. I didn't have sex until I was married, and I only dated people I could imagine myself being married to.

Yikes. I'm betting I lost a few of you with that sentence. Still, it's the number one thing I'm glad I did. I won't go into my reasons (family, religion, etc) for making this choice, but regardless of the "why," this difficult and forward-thinking decision laid a solid foundation for my financial future.

Have you ever seen a comedy or satire where the protagonist became smart, efficient, or successful when they weren't having sex? While this is mostly a humourous trope, there is actually some truth to it.

First, when we are focused on attracting or pleasing a partner, we have less time and mental energy to focus on ourselves and our goals. This can lead to unhealthy patterns of co-dependency, regret, and resentment. Focus on yourself before you bring another person into the equation. Does this mean you shouldn't have an active social life? Absolutely not! It simply means we reserve ourselves for ourselves while we are discovering who we are and achieving our primary goals. If you are spiritual (as I am) this is a great chance to spend a lot of time connecting with God or nature and broadening your worldview, your personal philosophies, and your understanding of your core beliefs.

Second, you must have high standards when you let someone into your love life. You wouldn't start a business with some random person you met at a bar and you wouldn't co-sign a loan for a blind date, so why would you start an emotional and time-consuming relationship with them? Why would you move in with them? Why would you have a child (a lifelong commitment, with high expenses, and intense time requirements) with someone who you aren't sure is aligned with your goals for your future?

This leads to the final (and most difficult part): Don't date anyone you wouldn't marry. There are many beautiful people, funny people, smart, talented, or successful people that would make a terrible spouse for you. Don't waste your time dating people that don't fit with your future. These people aren't necessarily bad for you, they may be your closest friends, but just keep in mind that if you are spending all your energy on a rocky relationship, it is very difficult to achieve your goals or be happy.

Does this mean I think everyone must get married? Does it mean that I think people who marry young are making a mistake? No to both. Plenty of happy and successful people never get married, and plenty of people marry young and still achieve their goals. However, the popular cultural message that we should be having sex and dating all the time to have a fulfilling life is simply wrong. It divests you of your valuable time, money, energy, and emotions that could be spent on your goals and your future. If you need sex, romance, or kids to be a part of your life, find a partner that has similar goals, values, and life philosophies, and get married.

Why do you need to get married rather than just commit to a good partner? Marriage is a contract. It outlines your expectations and responsibilities to one another. Just like a business partnership, both parties should know the benefits and risks. I understand that this doesn't sound romantic at all, but I'm not advising you on love here, just financial stability, and upward mobility.

2. I only took risks that were opportunities and avoided risks that didn't benefit me.

This seems like simple common sense, right? It really isn't though. According to a NSDUH survey from 2020, the government estimates 59.3 million people (21.4% of the population over the age of 12) used drugs in the previous year, and we know the trend in drug usage and overdosing deaths has been on the rise since 2020. This mean's that a least 1 in 5 Americans took the risk of taking an illicit drug at least once. This is an example of a common risk that is of no real benefit.

Does this mean that you should be completely risk-averse? Not exactly. Most people who are successful and goal-oriented take many risks and also experience many failures, but these types of risks provide you with valuable experience and opportunities to maximize your rewards. The person who keeps all their money in a savings account protected by the FDIC, isn't taking much risk, but they also aren't getting any reward. In fact, when inflation is high, their money is slowly losing value despite their caution.

Many risks are actually opportunities. We take risks when we move for a job, use all of our vacation time to travel, have children, buy real estate, and start or sell a business. Taking pretty much any risk is exciting or even scary, but determining which risks provide opportunity and which risks have no real benefit to you, is essential to your financial health.

So, how do we determine if a risk is actually worth it? Ask yourself a few simple questions:

• Will I be a better person because of this experience?

An example here might be skydiving. No one really needs to skydive just for fun. It's a risk. However, conquering a fear, checking off a bucket-list item, or just experiencing something so exhilarating makes this risk an exciting opportunity for many people.

• Am I willing to accept the consequences?

Think of any risk that may ripple out to impact your loved ones. Addiction, ignoring mental health issues, and marriage are primary examples here. I just said marriage can be a good thing, didn't I? However, it's not without risks, especially when you are blending families or finances. Do not allow yourself to get so immersed in the excitement or familiarity of a risk that you ignore the potential consequences.

3. I saved money and just didn't spend on anything that wasn't essential.

This may be the most simple thing I did that made the biggest impact. I lived super cheap. I didn't use hardly anything that was disposable. I didn't buy anything new. I collected free items and repurposed them for my use. I didn't go out to eat or spend money on entertainment or travel. I saved and paid down my debt.

Then what is "essential?" You'd probably like me to say it's different for everyone, but it's not really. Food, shelter, utilities, and health are essential. Pets and kids are expensive. Eating out and traveling add up. Having new things and nice things simply isn't essential.

Once again it seems I am painting a bleak picture of a life that doesn't have a lot of joy. That really isn't true though. Once you achieve financial security, all these things become available. Some of these things may be a central part of your life and you don't have the option of giving them up. The best examples I can think of are kids, pets, and travel. These things truly enrich our lives and have been shown to offer a lot of benefits to a person's life. Let's look at a few ways we can have our cake and eat it too.

Kids:

Many people already have kids before they try to establish financial stability, in fact, their child may be the primary reason many people start working to achieve this goal. Ideally, it's best financially to check off many personal goals (especially home ownership and marriage) before having a child. If this isn't possible, you will have a more difficult road, but by no means is it impossible.

Don't pay for daycare. I'm aware that this seems counter-intuitive because most of us need to work to make money. There are two reasons this is important. First, being with a parent or family member has many benefits for a child. Second, the cost of daycare is often so high, it practically cancels out the money you are making while working.

If you are married, find a way to get by on the income of one partner. This may involve each partner "taking their turn" as the stay-home-parent. If your family really cannot afford to make it on one income, then stagger your schedules. One parent works nights or weekends and the other parent works the other times. This can be incredibly stressful on a marriage, so make sure you don't forget to work on that too.

If you aren't married you should be able to rely on family, friends, or your community, even if this means building a community. This is uncommon in America where we are expected to be independent above all else. However, in other cultures, most notably immigrant cultures, Community is how they survive and become successful. Grandparents should be the best resource for parents, but often we don't live near family. Consider moving. If you have family willing to support you and help raise your kids, this is a resource with so much actual value that it is worth moving, even taking a pay cut, if necessary.

Not everyone has family that can be a helpful resource, and many people don't have friends that they can rely on or a religious community or neighbors that are suited to help. The most challenging option is to build a community, but it is certainly possible. Work with other parents and people who need Community to establish one. Think of it like carpool but with life. Instead of renting, establish an LLC (very simple) with your Community and invest together in a large home or multi-family dwelling. Trade and share skills and jobs.

For example, one person may work a 9-5 weekday job, another may be disabled and unable to work or drive, and a third may be a seasonal worker. The first person needs childcare during the week, but on the weekend they drive the second person to appointments and help the third person with weekend childcare during peak seasons. The second person needs help paying for rent and driving, but in return, they provide childcare and small household tasks like cooking, cleaning, and laundry. The third person works a seasonal job, so when it is peak season they need nearly 24/7 child care and help with household chores, but they can contribute more to rent to offset person two and during their slower times they can help with childcare and projects like home-maintenance.

By pooling their resources, time, and skills the three in the example provide support for one another and help each other raise kids, save for the future, and achieve goals. If this seems daunting, take a look at other cultures and the tight-knit immigrant communities sprinkled throughout the states for examples of how successful this can be.

Pets:

There are a lot of documented benefits to owning a pet. Everything from mental health improvements and reduced blood pressure, to extended life expectancy and overall happiness. One thing pets don't help with is our finances. According to “Forbes” the cost of owning a dog can range from $17,650 a year to over $90,000, depending on a variety of factors. Other estimates suggest the overall lifetime cost of your dog to be less than $20,000. That's much better, but it's still enough to pay for a car or the downpayment on a home!

So, how do we save money and still get all the benefits of having pets? The solution is fostering pets and volunteering with rescue organizations. When you foster a pet all their medical bills, food, and pet supplies are covered by the rescue organization. What if you know you would get too attached? Ask about being a long-term foster. There are often pets that have spent years with a rescue organization and need long-term placement if they cannot be adopted. Most often this applies to large-breed dogs or pets with expensive or time-consuming medical issues, but some rescue organizations are at max capacity and a long-term foster may be the best solution to allow them to help more pets.

Travel:

I personally believe that one of the best investments you can make in yourself is to travel, so I always look for opportunities to get out and explore the world. Traveling isn't the best way to save money, but if you are prepared, then you can make it work.

The number one thing you must do is avoid "tourist traps," these are places where they charge $10 for a bottle of water. Tourist traps are places like theme parks and aggressively advertised destinations. Everything in a tourist trap is geared toward visitors and the tourists may actually outnumber residents. Instead, look for places to visit that are less well-known and enjoy discovering new places with authentic people. You won't probably find a collectible shot-glass that was mass-produced in China, but you may find more memorable things to collect.

The next step in affordable travel is to plan your trips in the off-season. Don't completely give up hope of visiting Hawaii or Disney World, but wait until prices drop or they offer incentive packages. Even if you travel in the off-season, keep in mind that popular tourist destinations will always be pricy. You can plan multiple trips for the cost of one visit to New York City or Universal Studios.

Finally, seek adventures that are focused on experiencing and not spectating. You can pay to get on a tour bus, or you can look up famous, historical, or interesting places and just go and explore. It may require some research and planning to see which parks and museums are open when you plan to visit, to pack a lunch for a hike, or to bring water toys to the beach from home, but it is worth it to have the chance to travel without going into debt!

You've probably heard that nothing worthwhile comes easy, and that is very true. Regardless of how difficult it was at the time, I am so glad that I didn't have sex until I was married, I only took risks I saw as opportunities, and I lived cheaply. These three things gave me the discipline, experience, and boldness to make tough choices. They also allowed me the tenacity to persevere through my failures and times when life threw overwhelming things at me. More to the point, anyone can decide to do these things at any point and lay the foundation for the next steps to their financial success.

If you found this article helpful or interesting, look up the next two articles about my keys to pulling myself out of the financial morass I started in: "the biggest risks I took that paid off" and "the things I wish I had known and would do differently."