When You Have a Safety Net, You Have More Options

Think of yourself as the star trapeze artist in your own life. You swing from one day to the next, endlessly until your part of the show is over. And each day brings its own options, challenges, and choices. Some of these involve risk. Think of these risks as letting go of one bar so that you can catch the next one. It’s easier to take risks when you know that there’s a safety net down below to catch you if you fall.

In real life, a cushion of cash acts as a safety net. If you start a new business and it fails, money in the bank means you’ll be disappointed but not financially crushed. Perhaps there’s an unpaid internship that you want to take. Having a multi-unit revenue property that covers your expenses, or parents who are willing and able to foot your bills, means that you can work without renumeration in order to pad your resume. Perhaps you’re simply mentally exhausted from work so you decide to take a sabbatical while living off your dividends.

Dividends. Cash-flowing rental property. Parents. These are all forms of a safety net. If you have access to them, then you have a surer foundation from which to pursue various options. To go back to the trapeze analogy, you can let go of the trapeze bar knowing that missing the next one and falling down won’t break you.

Try to imagine taking time off work to protect your precious mental health without anyone or anything around to pay the bills. How long could you go before being evicted? What kind of impact would the financial stress have on your mental well-being?

Having a safety net gives you room to breathe, to make choices that bring you closer to your goals. You’re not stuck. Getting un-stuck from whatever bad situation is making you unhappy is rarely ever easy, but it’s always easier with money. Hate your job? Quit! No longer love where you live? Move! Need 9 months off to pursue your Bucket List travel itinerary? Go!

When you have the safety net that money can provide, you’re free to pursue those options.

I’ve talked about having a safety net for Future You and that you need to save for your retirement. While that’s very important, you still have to live in the present moment. There are probably some things you want to try before you get to your golden years. It’s very likely that whatever those things are, they’ve got a financial component to them. I want you to pursue your dreams, but I don’t want you to be impoverished if those pursuits aren’t successful.

For my own self, I knew that I wanted Future Blue Lobster to have access to a stream of dividends in retirement. I’m happy to report that my army of money soldiers is growing nicely. I’m not doing as well as Tawcan and his annual dividend projections, but I’m getting closer and closer to my own goals each month. In other words, I’ve created a safety net for myself. I don’t have wealthy parents who can pay my bills for me. Instead, I now have an annual stream of income that will allow me to live without employment should it become truly necessary. It would be Lean FIRE in the extreme, but I would survive without going into debt.

Money buys options. Having a solid safety net in place means that you can pursue those options without worrying that doing so will lead to complete financial ruin. You can hope that your plans work out while knowing that you have the resources to recover if they don’t. The safety net of money allows you to consider risks that you otherwise would have disregarded. Imagine if you had rental property that paid all your bills, what would you do with your time? If you love your job/career, maybe you’d keep working. But if you wanted to spend a few months in an artist colony, you could do so without worrying about going bankrupt.

If you don’t already have one, I suggest that you work on weaving your own safety net. The bigger and stronger it is, the less risk you will face in pursuing whatever option you think suits you best. You won’t ever regret having a safety net if the time comes that you need one.