I have a secret to share with you… I think that a little bit of pessimism goes a long way towards achieving financial independence. When most of us start working, we’re chipper and happy and excited to be getting a paycheque. It’s lovely to have some spending power! And most of us use that power as quickly as we can. Sometimes, that results in huge debts that chain us to a paycheque. By the time many of us have lost faith that we will one day work at something we love, the financial obligations that were picked up along the way keep us tethered to employment. Without another source of money to replace our paycheque, we’re essentially stuck.
No one ever talks about this aspect of adulting in their graduation speeches… Those speeches are flowery and encouraging, and urge graduates to pursue their dreams. That’s fine and good and great if you can do it. However, I do wish someone could work in a nugget or two about building up some money on the side… just in case you’re among the unfortunate multitudes who won’t have the opportunity to do what you love and receive a handsomely large paycheque for doing it. But I digress…
Take some time to seriously ponder how much life-satisfaction you anticipate receiving from paid employment. Doing so is a powerful catalyst. I can almost guarantee that you will be motivated to pursue financial independence sooner rather than later. It takes a few years, but we all eventually realize that not everyone who works hard gets rewarded. There are those who aren’t good at office politics, and have no desire to expand their skill set in that area. Unfortunately, some people are the victims of harassment and bullying in the office. These are the main reasons why it’s a seriously good idea to add a drop of pessimism to your views on saving for the future.
It won’t hurt to consider what your options will be if you decide that you hate working and that you want to stop doing whatever it is that you’re paid to do. How will you pay for your life without an employer giving you a paycheque? Do you want to work even harder than you do now by starting your own business? Or would you prefer enough passive income to fully fund you the life you dream of? Maybe you’d enjoy the combination of a lower-paying-yet-absolutely-enjoyable job that’s bolstered by passive income from your investments?
Now, there’s always the possibility that you’re like a couple of my friends who absolutely love their careers. Like everyone, they have bad days at work but, for the most part, they love going to work. Read that again – they love going to work. They would do their jobs for free – that’s how much they love going to work!
It’s mind-boggling to me. Even when I loved my job, I never loved it that much. And over time, my like for my job has dwindled considerably. Many accolades and much credit should be given to Young Blue Lobster. Twenty year ago, YBL knew that working to 65 wasn’t a prominent dream for our life. YBL quickly paid off student loans, a car loan, and a mortgage. YBL stayed out of debt and re-directed those former debt payments to savings that were eventually invested in our TFSA, our RRSP, and our non-registered investments. Even before locating the F.I.R.E. corner of the internet, YBL was pursuing financial independence and funding our dream of retiring early.
At the time, YBL had an inkling that having a salary-replacing cashflow on the side would be a very good thing just in case anything went wrong with the regular paycheque. Looking back, I have to say that YBL was 100% correct. Our little army of money soldiers bolsters my investment contributions every month. In a year or two, those monthly dividend payments will exceed the contributions from my paycheque. That’s not too shabby as far as financial achievements go. Without that little sliver of pessimism fuelling my decisions way back when, my current side income would be meagre.
I want you to pursue your dreams. You’ve got one life and it should be the best one that you can achieve. At the same time, a touch of pessimism can help you to focus on how you can best make those dreams come true. Pessimism… a little goes a long way.