Pay up or take the bus 2723

I'm trying to express a different philosophy and worldview in which that kind of stuff doesn't matter so much. If you live a frugal (not cheap, not skinflint but frugal) lifestyle and don't let your work become your life, concepts like "job security" don't mean so much.

Far too many people (myself included in my past life) let their work become their lives. Their happiness is practically completely tied to ebbs and flows in their job success. A layoff is devastating, both emotionally and financially. The alternative, working at a job you hate because you have to have the money, is as bad. Drug and alcohol abuse and getting joined at the pocketbook to a shrink often follows.

A cute little sound bite that says it all is "do you work to live or live to work?"

It took a traumatic event (almost burning up in the fire and losing most everything I had.) to slap me in the face and make me take a new look at my life. I realized that I would not get a second chance to do this "life" thing correctly. I also realized that I could live just as well on a lot less income by leaving the rat race.

Once your create a sustainable lifestyle then being tied to a particular job and income level doesn't matter so much. You can then do what you like instead of what you have to do. It is little more than an inconvenience to be laid off or simply to decide that you don't like the work.

Another key is to maintain a current and diverse education. I've changed major career paths 4 times in my life and in each case, self-education was key. Being competent in many fields is powerfully empowering. To put it in the street vernacular, you know that at any point you can tell 'em "To take this job and shove it."

The French philosopher Proust said that most people end up doing what they are second best at. No truer words ever spoken.

A major part of living a financially rewarding and independent life is patience, the kind of patience that for most folks, unfortunately, comes with age. I was as bad as anyone else at the "gotta have it now" thing when I was younger. I still get that feeling sometimes when I see a really nifty new toy. My wiser self slaps the impatient self and says "settle down, it'll be there later when you've saved enough to pay cash without pain."

I use a modified Dave Ramsey envelope system paycheck into cash. Label envelopes for each expense. One for the mortgage, one for the (ughhh) car payment, one for the power bill, one for groceries, etc. Divide the cash up among those. Have a couple more envelopes, one labeled "mad money" (one for each member of the family) and one for "nonessentials".

Pay the bills out of the envelopes. When the envelope is empty, stop spending in that category for the month. When the "groceries" or "restaurant" envelope is empty, well, time to eat out of the freezer and pantry until the end of the month.

I don't have debt and my recurring expenses like utilities are well defined so I don't use envelopes for those. I do use envelopes for toys and other non-essentials. For example, I have one labeled "MacMillian 50bmg sniper, er target rifle". When I have some extra cash, I put some money in that envelope. When it reaches the approx $3500 I need for the rifle, I'll order it.

I have another one I labeled "transportation". This is a futures fund to pay for car maintenance and a new car in the future when it's needed. For large funds like this, I actually just put chits in the envelope and keep the actual money in my mutual funds so they earn a little. I have the discipline to forget that I have the money represented by the chits. Yet another one in the chit category is "motorhome". I pay for maintenance on my current motorhome and will buy a new (used) one sometime in the future with the money.

The envelope system has a very powerful emotional calming effect on one's patience or lack thereof. I don't find myself having to constantly make the decision of "can I get away with buying that rifle or camera or car or whatever?" I take the available surplus cash every week and divide it up among the envelopes according to what has my attention at the moment. I keep the tally on the outside of the envelope so that I know what's there at any time.

I freely rob from one envelope to fund another as my interests change or needs arise. The Macmillian rifle one, for example, has ebbed and flowed for over 5 years now. I bought a new digicam out of the rifle fund last year when my interest in digital photography took off.

If you have kids, the envelope system makes it very easy to say "no". "Sorry, kids, but your envelope is empty because you bought that Nintendo last week. You can't go to the concert this week because you can't afford it." That also teaches the kids about budgeting and the real worth of money at an early age.

Not to sound like I'm shilling for him but I've found the Dave Ramsey course to be among the best money I've ever spent. I'm a very sharp guy but those courses made me realize that I didn't know jack-spit about managing money (after all, I AM an engineer.... :-) I wish I'd discovered his methods 20 years ago - I'd be quite wealthy right now.

There is a good little book out there called "Do What You Love, The Money Will Follow : Discovering Your Right Livelihood" by Marsha Sinetar. ISBN 0-440-50160-1. On amazon for $10.88. She has written another book that I haven't read yet called "To Build the Life You Want, Create the Work You Love : The Spiritual Dimension of Entrepreneuring"

Some parts of this book is sorta squishy but all in all, a great guide to a great philosophy.

You know you're doing what you like when you look forward to the weekend ending so you can get back to work :-)

One other thing I should mention in this thread. Until one is there, one cannot possibly realize the peace that comes from savings. When you have enough money in the bank to live at your current lifestyle for a year or more, you simply don't worry about layoffs, burps in the economy and the like. This is similar to the peace that comes from having the house paid for. The combination of the two means that you can tell the world to go fsk itself for very long periods at a time. Certainly long enough to figure out what you might want to do next, and the money to do it.

When you live from paycheck to paycheck, even if you are able to put a little back, there is a low but constant level of stress caused by worrying about what might happen that over time, corrodes the soul. It wears you out and removes a lot of the enjoyment from life.

Consider the other situation. Right now if my building burned to the ground, I could thumb my nose at it and go on my way with no worry. I'd have plenty of time to figure out what I wanted to do next. I might want to rebuild with the insurance or I might not. There would be no pressure to make a decision because I could live for at least a couple of years on my savings. The only thing I'd lose if the place burned would be heirlooms and to the extent possible for things like photos, there are copies stored off-site.

My savings are not that large, very low six figures with a net worth of no more than half a mil, quite modest for a 50-something. ALL my very modest investment income goes back into the investments and I take nothing out. I live on my income. The key is that my expenses are so low.

Somebody's going to say something about bad health forcing them to do something they don't like. Not true. I have the usual problems of late middle age including insulin-dependent diabetes. Healthcare is a major expense center but because I live so cheaply otherwise, the cost is manageable. I don't LIKE pouring almost a kilobuck a month into that bottomless pit called healthcare but that's life.

I'm not an evangelist for this style of living and normally don't talk about it all that much. I just want to show that there is an alternative to living paycheck-to-paycheck and to the "I've gotta drive 100 miles a day to earn enough to support my debt-ridden lifestyle" trap.

John --- John De Armond See my website for my current email address Cleveland, Occupied TN