Get out of slavery
Get out of slavery: detect and control your liabilities
Starting to invest and training on it made me aware of many of the things around us. One of this things is to distinguish those aspects that enslaves us, not only economically, but also in many other aspects. I summarize them in: everything that means a monthly expense. Obviously, there are others, but the important thing is to become aware of them, to know them and to spend only on what gives you any value. Nowadays, big companies, the media and politicians have teamed up to be their slave: to consume a lot, work hard, pay a lot of taxes… However, financial education is non-existent, as part of their plan.
And if you are ignorant, you will fall into his clutches and be his Slavic forever: you will go to school, then to college, then a master’s degree, then you will get married and you will have children, car, house, you will pay taxes and more taxes, then a bigger house, then a house on the beach, a bigger car, you will start a pension plan , you will go on holiday twice a year… Anyway, a mess that leads you nothing more than to spend and spend (consume and consume) and to have more and more debt.
Detect your montly expenses
Of all the things that involve financial slavery, I will point out those that involve a monthly expense. That is, that they are a passive income for large companies and for the political class:
- School: in addition to being the place where we are indoctrinated to be good workers, the purchase of material, trips, clothes, etc. become a liability. Also, lately we are so busy working, so we need to hire someone that takes the children to school, pay for the dining room, extracurricular activities, activities in July…
- University or other professional courses: most are still “free” in Spain, but lately it is necessary not only to study a career, but also a Master (that is the expensive thing). You can have a loan that the same university offers you.
- Housing: is the number one of the liabilities. From the purchase by mortgage (every month you pay an interest to the bank), to the supplies (gas, water, electricity…), internet, community payments, insurance… If you don’t buy it, the mortgage expense is transferred to the rent.
- Vacation home. It is very common to have a second home, with all the associated expenses. And, in addition, an alarm, because we are never there and anyone could get it.
- Cleaning the house, au pairs and other services that we hire because we are so busy working that we can’t make everything.
- Car: another of the great liabilities. From the cost of the car (which we can pay in installments), to insurance, gasoline, parking, repairs, taxes…
- Gym (I’m glad to see that a lot of people run on the street or the park, which are for free).
- Retirement home, because our sons are too busy working all of the time.
- Bank: another of the big liabilities. There have been a lot of consumer loans lately, which are the most expensive.
- Clothes/beauty: fashions change very fast and products last not much. Many people are slaves to fashion and beauty services, which is, in the end, a steady expense (sales every 3 months, hairdressing once a month, manicure every three weeks…).
- Food. Many people are a fast-food slave and companies take care that everything carries sugar and other products that are addictive and very harmful to health.
- Communications: mobile phone, internet, TV and internet payment channels, etc.
- Holidays. The stress of work and advertising/television campaigns make sure that one of our greatest desires is to always be on the road. Obviously, you can pay in installments.
- Health/social security. We don’t think this is our expense because we pay it directly from our paycheck. Nevertheless, many people also pay for private health services, retirement plans, and other health services.
- Tobacco. The publicity is making possible that we kill ourselves little by little. It is one of the clearest examples of slavery, since it does not give you anything (it is only an addiction) but it hooks you and it is very difficult to leave it.
- Dog/pets. In the past, having a dog meant feeding him (of the same food) and little else. Now having a dog is a continuous expense, you only have to see the businesses that are associated with it (clinics, automatic dog laundry, people who walk the dog for a small price because we do not have time…). There are even people who take a loan in order to buy an expensive dog (no words…).
- Football/other sports. There are matches every day. To whatch them, you must go to the bar or any authorized place, or pay a convenient monthly fee if you want to see it at home. If you like a team very much, you will pay another comfortable membership fee, the T-shirts of each season, scarfs, etc. Just think about player checks and who pays it….
- Lotteries. There are many people who directly allocate a weekly budget to buy tickets.
- Go skiing/going to the beach. One of the things that surprises me about the big city is the need to escape from it every weekend. From a young age you are indoctrinated so that you learn to ski in winter and sail in summer, with all its associated expenses. Obviously, when you’re an adult, you want to keep doing the same things, otherwise you may be so frustrated…
- Taxes. They are gradually increasing and we must pay taxes for everything. More and more “needs” are emerging and they must be covered. We have also to pay the increasing public debt. Whether you are a consumer or an entrepreneur, self-employed… we pay a lot of taxes for everything we buy, acquire and get.
I’m sure there are many more. Many of them rely on a false illusion, longing for a particular lifestyle, or alleviating the stress of life. There is a trend that defends the minim service, eliminating all those round expenses… As a close friend once said to me: this man goes to work to pay for the car he needs to go to work. Many go on vacation to reduce the stress produced by their work, which will mean having to work harder to pay for them. An endless wheel…
How to control these traps
Very difficult inertias have been generated. And if you open your eyes (and turn off the TV), you’ll see that a lot of people complain about how bad’s their situation, even though we keep spending on a lot of useless things. The lack of financial education means that, in many cases, we have extra money (savings) and, as we don’t know that we could you something profitable with it, we spend it on one of the previous items.
Obviously, many of these expenses are necessary: you have to live somewhere, with some expenses, a lot of people need a car, etc. But since we have decided to be aware of the money, it’s necessary to know in advance whether that expense and that product agrees our financial goals. That’s how we should decide if we buy that thing (and maybe the loan we need) or not. That is, it is not about demonizing any company, since they all have to live and each one fulfils a function, but we must try not to fall into the traps that adds and marketing are showing us every day. Even more, these products, far from making us happy, often make us more unhappy, because there is always something more and more expensive that we want.
And above all, if our goal is to improve financially, as I detail in my book, we must always ask ourselves whether the money we are going to spend on that liability would not make us happier being a passive income rather than a passive expense. As I explain in my book, this can make a big difference: the same expense made a passive income for me (+350 €/month) and a debt or liability (-150 €/month) for another person; in total, the difference is 500 €/month between a consumer person and an investor with a single expense.
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