I am not going to get all political on this blog, but like many Americans I have been watching the 2016 Presidential debates, and it seems that one of the recurring topics is the economy. Both candidates have plans to grow the economy, but Hillary Clinton keeps talking about how we need to help the middle class grow and “get ahead”. As I sit here and watch that I cant help but ask myself, “How the hell do they plan on doing that?” I ask that question about both sides, but in the context of this article I’m going to discuss how I personally would suggest someone in the middle or lower class try to get ahead.
This may be painful and somewhat naive of me, but I do think it is possible to get ahead, and I don’t necessarily think that social programs or providing free educations for everyone to do this. That said, as a white male born in American, the son of an educated family with an above average income, I realize that I came into this world with a silver spoon in hand, and some might argue my mouth. I’ve one the genetic lottery, and won the parental lottery. While I haven’t “made it” yet, I also have the benefit of some hindsight at this point as well. Those caveats aside here is what I might suggest to try and get ahead.
Do the Opposite of What Most People Do
We have been programmed to buy things we don’t need. To wantonly consume. The idea is we want something bigger, something shinier, something better than our peers. Many are focused on the pursuit of the mere trappings of wealth, and not real wealth itself. They want the big house and the shiny car. Or at least they think they do. There is an argument that this is how we are wired as animals.
My advice would be to do the opposite. If TV tells you to buy, don’t buy. Better yet, don’t watch TV. If everyone thinks it is cool to drink, don’t drink. Avoid crowds and lines. That’s a ticket straight to the lowest common denominator.
Earn more than you spend, and save money. Easier said than done for many people, but for many this is ultimately a choice.
Add Good Habits, Subtract Bad Habits
I have been experimenting with habits. So far some have stuck (cut back on my drinking drastically, read daily). Some haven’t (exercise in the morning, write daily for this blog). That’s OK. As long as I am adding good habits and working on subtracting had habits I think in the long term that will help me get ahead.
Typical habits to add could include more exercise, reading, meditation, or spending time outside. Habits to subtract could be less tv, less social media, less drinking, etc.
Set Goals in Writing
People always talk about the importance of goals. I never really set goals in writing. In the start of 2016, when I started this blog, I decided to write down some goals. That has been helpful. I think I have thought about them more consciously throughout the year. I think when I look back on these goals at the end of 2016 / start of 2017, I’ll be able to say I met some of these.
It has been a helpful practice and I would suggest doing this. A blog is a great format to do this, but you don’t need a blog. You could write them on a word file, or a piece of loose leaf paper, or even a forum. Just keep them somewhere you can revisit them.
Pay Yourself First
Charlie Munger suggests this. I think it’s a great idea. Make sure you pay yourself. At first I was literally paying myself by investing in mutual funds, paying down debt, etc. I think this is great.
But now that I have been doing this for a while and have my finances on auto-pilot, I have been trying to set aside at least half an hour a day to work on a project for myself. Lately that has been my affiliate Website, or working on buying real estate. Ideally I want to invest my time in something that scales or compounds. Rather than work an extra hour for the man or something. Not that making more money can’t compound. I’d like to try to grow my more “passive” income, rather than my “time for money” income, although lets be honest – I want to grow both.
Still, positive passive cashflow equals freedom. There is nothing as satisfying as cashing a rent check, or watching an affiliate commission hit my bank account. Dividends are great too. Pay yourself first. It has been addicting to watch these numbers slowly grow.
Life is a battle. Most days in my line of work it feels like me against the universe. Everyone and every thing is pulling me in different directions. Trying to distract me. Trying to stand in my way. Trying to keep me from getting things done. It’s the most brutal sport. You have to roll with the punches. You can’t take it personally. You can’t allow yourself to be defined by your failures either. I
refuse to do that. I choose to be defined by my success. I think resilience is important. Everyone gets their cage rattled. It’s how you respond that defines you.
Develop Soft Skills
Develop skills like being able to communicate effectively. Read a lot. Write. Try to sell something. Practice the art of persuasion. Lead people. These aren’t the kinds of skills they will teach you at school, but these are critical for both the day to day transactions of life, and for generating value where others cannot. If you can’t negotiate let alone communicate effectively with people, how do you really expect to get ahead in life? I suppose you can be some sort of idiot savant, but most of these people come off as assholes anyways. Emotional intelligence can go a long way.
When I think about the average middle class American the word “over-extended” comes to mind. Their finances are over extended. Their waistlines are over extended. Their attention span is over extended. Yes the flailing middle class is like some sort of mystery. Find a foothold and then build some momentum. Stay hungry and lean. Only dead fish swim with the current.
And a lot of what I am talking about here is the same stuff I am talking about throughout the entire blog. If you want to see the middle class get ahead, follow what I am doing. I literally am the middle class getting ahead. My parents were successful, but it’s not like I grew up in the Taj Mahal. I wasn’t loaned $15 million dollars like Donald Trump. I started out $125k in the hole 4 years ago and now I’m well into the black. I still have a long way to go, but this shit works.