I once drove down the highway and saw a billboard that advertised, “I can help you retire in less than ten minutes.” I bet he got a lot of calls from pretentious Americans with short term memory. Kind of funny when you think about it. No joke. All that being said, I do like reading the advice on financial websites and social media posts. That is until lately when I realized how exhausting it was. I won’t deny that the advice is practical and realistic, however it doesn’t seem to work in the real world.
Here are some examples of the bullshit advice:
- The biggest one is that you should only pay one quarter of your income on rent, or one week’s paycheck. In the real world, most people pay nearly half of their income or more on rent and utilities. The base requirements are 2.5-3 times the rent for income. You can say just live below your means, but many people can’t lower their standards any more than they are already.
- The next best advice that works for most people is to have an emergency fund equal to 3-6 months of expenses. Alas, more advice that doesn’t work for the average person. Again, with the ‘you can only lower your living standards so far to live within your means.’
Solutions for the bullshit advice:
- Find the cheapest place you can stand to live. And then economize and look for deals on everything else you want or need. Fortunately, the high cost of living is only in few areas: housing, healthcare, transportation, education; you know all the fields that the government has their hands in. If you can minimize costs in these areas, you can maximize your potential no matter your income. Maybe look for co-living or cohousing opportunities if you are into communal living. I am okay with this as long as I get my own space and individual autonomy.
- Save as much as you can but have a credit card with a low limit and keep it paid off for those “oh shit” moments. Most financial advisors say cut the plastic, but they do come in handy if you use them right. If you ever get a six figure or unlimited credit limit, you can invest in business opportunities to supplement your income. Even small loans are okay as long as they aren’t too predatory. Keep it small and dont take more than you need. 730% for a payday loan may sound huge but it’s only 2% per day, as long as you pay it off quickly. Always wise to just avoid them altogether.
- If you take out loans to go to college, major in something that is marketable, otherwise just look for scholarships or pay your own way and go part-time if you have to. I noticed when they quote the cost of college, it is usually $25,000-$100,000 per calendar year. However, when you look beneath the surface, tuition is only maybe 1/3 of the cost. Room and board and books can be paid by the borrower. It’s amazing most people would rather use student loans to pay their living expenses rather than just getting a job and paying these yourself. The only thing expensive about college is the tuition and this is all you need to borrow for, if you must borrow at all. There are all sorts of scholarship opportunities out there; you don’t have to be a genius.
- Take advantage of communal wealth. I don’t think anything will happen to Social Security, understanding how the economy works. The Democrats fear the Republicans will eliminate it, and I read about how they want to privatize it, which means putting part of it in the market, so you earn a little more. It was never meant to be a sole source of income anyway. You have to supplement it with a retirement income, paid off home mortgage, family, part-time work or business if you are able in your golden years. Some states even do away with property taxes once you pass 65.
In closing, it is not that the advice I hear from financial “gurus” isn’t practical. Most of these people understand finance from a booksmart point of view and not from the real-world point of view; at least from the working-class arena where most people are. They are usually academics who are out of touch with the average person yet make huge incomes from corporate sponsors. The advice does work well if you an elitist, i.e; usually white collar. No one cares about blue collar anyway, right? Now I am starting to sound like a Democrat. Don’t even get me started on politics. All the government does is subsidize people, welfare, and make them more dependent on government, while the capitalists use that as an excuse to hike prices and make things worse. Both sides just play off of each other to keep us trapped in the rat race.
The “poor” of the world are God’s people. Trust in the Divine and remember He is the One who ultimately prospers us. Even if we look poor by the world’s standards. Becoming wealthy isn’t a matter of “just work harder”. It all has to do with your social class and who you are networked to. If you are born working-class, blue collar, you are automatically poor by the world’s standards; with only a 1% chance of upward mobility. That sounds pretty bleak, but you have to hear the bad news first before you can hear the good news. And I gave the good news at the start of this paragraph.