When I left Corporate America in 2012 to work on Financial Samurai, I never considered working part-time for anybody else. My goal was to concurrently build passive income streams and online income in order to never have to work for anybody again.
It wasn’t until 1.5 years after being on my own that I began to feel the itch to assimilate back into day-to-day society. It gets lonely building a business by yourself. An opportunity arose with one of my largest clients and I took it.
After consulting for a year between November 2013 to December 2014, my enthusiasm for consulting began to seriously fade. There were some personnel changes that helped accelerate my feelings of apathy. Meanwhile, I learned all there was to learn about marketing at a financial tech startup.
But I decided to hang on for six more months because I created a new goal in 2015: finally pay off a rental property mortgage I had since 2003. By tethering my consulting income to paying down debt, I was able to build more goodwill with the firm while finally paying the bugger off. I became motivated and happy to continue working again.
Debt Is A Great Motivator To Build Wealth
Reflecting further, the mortgage I took out in 2003 actually helped keep me motivated for much longer than just my six months as a consultant in 2015.
After 9/11 happened, all I wanted to do was be a nomadic traveler without a care in the world. I had worked for two years after college and was completely debt free. A couple lucky investments during the dotcom bubble also filled my bank account with more than I needed. I was already super frugal, living in a studio with another guy and it felt pointless working in finance to try and make more money. I needed to find myself because I was unhappy.
My feelings of wanderlust changed when I bought my first property in 2003. As soon as I took on a $460,500 mortgage, my motivation SHOT THROUGH THE ROOF! It was if a bunsen burner was lit under my ass to start hustling again. I knew that if I lost my job, I might fall behind on my mortgage payments and ultimately end up a disgrace to my family and friends for welching on my debt.
I thought I would last for maybe five years in finance. The hours were brutal (5:30am start time) and the stress was immense. But I was happy again because I had a purpose to pay off debt. My mortgage helped me survive for 13 years because it was important to make enough money to have the OPTION to pay the sucker off. If I was debt free, I would have quit banking a long time ago to the detriment of my finances. Looking back at my years working in finance, I cannot help but smile and feel proud of the roller coaster ride.
I firmly believe many of us, including myself, don’t stick things through long enough to see the flowers bloom. Life is too easy in America compared to a couple hundred years ago when indoor plumbing was a luxury, mobile phones were non-existent, and minorities couldn’t roam the streets as freely without being ridiculed.
We’ve got it so good now, yet we aren’t any happier!
Use Debt Wisely
Debt can be used to create great wealth if used properly. Put 20% down on a property that goes up 20% in value and you’ve just made a 100% cash return. But put 20% down on a property that loses 20% in value, which you have to sell because you can no longer afford the payments, is a 100% loss. I definitely don’t recommend anybody invest in stocks on margin due to the volatility and forced margin calls that may sometimes come about. Invest passively with minimal costs instead.
Use multiple reward systems to motivate yourself. I remember telling myself in college that I could only buy a mint chocolate chip milkshake with my girlfriend if I spent three hours studying beforehand. If I didn’t study, at least I wouldn’t drink 800 worth of calories, get chunky and lose my lady’s love in the process! And if I did study for three hours, then my grades would improve and I’d get to have fun with my girlfriend as well.
The same system can also be used with mortgage debt, credit card debt and student loan debt. Make your debt payoff journey a fun one that is coupled with an additional reward once paid off. Having too much debt is bad, but having enough debt can also help keep you from quitting a job, a side hustle, or an entrepreneurial endeavor way too soon.
Check out: FS-DAIR to give you some guidance on determining when to pay down debt or invest.
The More Money You Have, The Less Motivated You’ll Be Too!
Just like how having less debt is demotivating, having more money is also demotivating! We should feel sorry for the trust fund babies who are born with everything handed to them. Only people with tremendous amounts of pride would be willing to study eight hours a day and work 60+ hours a week to try and build their own wealth if they’ve already got millions at their disposal.
Having no motivation is one of the reasons why money doesn’t buy happiness. No motivation equals no progress. And progress is key to all happiness!
Be very careful believing the myth that once you’re rich and debt free that everything will be wonderful. I’m telling you now that you’re going to feel the exact same way once you hit a financial target. You will miss your journey towards debt free much more than you’ll appreciate actually being debt free.
The only way you’ll continue to elevate your happiness level is if you continuously do something that helps other people. I enjoy blogging about personal finance mainly due to the comments and e-mails I receive from readers who say an article helped them out of a financial bind. As soon as these messages stop, I’m sure so will my motivation to keep on writing.
Readers, have you ever used debt as a motivator to work longer than you otherwise wanted to? Any examples of where debt helped you get ahead besides in investing?
Image by: Colleen Kong Savage
I’m all for taking on some healthy debt if it gives some investment leverage or positive cash flow. Real estate or businesses are where debt make me smile. 🙂
Yes, almost everyday. While at my last job, I worked weekends at the restaurant, making for 6 to 7 workdays in the week. It was brutal. But being able to make such large payments and knowing that by the time I’m 30, all my debt will be gone and I’ll have the beginning of a retirement nest will really drive me for the next couple of years forward. My hope is that my tight restrictions now will lead to an awesome lifestyle later on.
Private school tuition isn’t technically debt, but it functions in much the same way for us.
My father-in-law described our choice to send our children to private school as “buying an insurance policy.” Sure, they may be successful without the advantages that a private school education provides, but if it gives them a little better chance at success, and we can afford it, we choose to do so.
But the thought of having to pull them out of their school because we cannot afford it, keeps me up at night and keeps me motivated to make money.