Flashback. One of our rare first-person anecdotes, but one general enough that you can apply it to your own situation.
While studying in college (mathematics, not some useless liberal art), your humble blogger worked at the front desk at a boutique hotel in downtown Toronto. The midnight shift change approached, and in walked the night audit manager. An immigrant from India, he had a background in finance. Or at least enough aptitude to be charged with balancing the day’s books while remaining affable enough to meet with guests.
Somehow, the conversation turned to the topic of the college kid lamenting his own financial situation. Not drowning in credit card debt nor student loans, but making just enough to cover rent, food, and little else. Not getting ahead. I mentioned to the night audit guy – let’s call him Rajiv – that I was puzzled as to how people, especially my young and (I thought) equally impoverished contemporaries, could afford houses and cars. Building wealth was as baffling a concept as interplanetary travel.
Rajiv, who was 40 or so, rattled off a list of his own financial obligations. Kids to feed, family members back home to remit money to, and (thus, according to him) a VISA bill with a balance in the high 4 digits. With the tactlessness of an early 20-something I exclaimed that that must be awful. He shrugged his shoulders and said, “That’s life. How else are you supposed to do it?”
Years later, that remains one of the most depressing conversations about money that any 2 people have ever had. Rajiv was a guy who, at least on the surface, had none of the trappings of self-induced poverty. He wasn’t unemployable, overly self-indulgent, irresponsible or unduly risky with his money. He was educated and hardworking, with a steady if unspectacular white-collar job, a home in the suburbs and a wife and family. Yet he’d resigned himself to having a negative net worth, then dying.
Admit it. At least some part of Rajiv’s story resonates with you. Rajiv was a smart guy, at least smart enough to understand causes and effects. Could he have done anything to fix his situation?
Of course. He could have temporarily downsized his living arrangements. Cut more fat out of his budget. Taken a second job, assuming diurnal sleep wasn’t all that important to him. Pleaded with his bosses for more money, which is what most of us would have attempted.
All of which would have made incrementally small differences and still kept him struggling to make up ground.
Or he could have changed his mindset. May Control Your Cash never enter the depths of the category of repetitive and unctuous self-help sites, but here goes. The best way to plan your escape from financial inertia is to think that you’re worthy and capable of doing so.
Many of the details of Rajiv’s case have been lost with the passage of time, but there’s always something you can do to increase your value at work. Tony Robbins (oh God, we’re quoting Tony Robbins. And only one paragraph after claiming we wanted nothing to do with self-help sites) once said that you should make yourself 15 times more valuable to your employer, a recommendation both numerically precise and somewhat ambitious.
The hospitality career eventually ran its course. Your humble blogger later worked in advertising, an “industry” that attracts people disenfranchised by other, more regimented lines of work. That’s a nice way of saying that along with the free spirits and the extremely casual dressers, advertising attracts drug addicts, alcoholics, and the exceedingly lazy who excuse their inconsistent work ethic as tortured brilliance.
Nowhere is it easier to get ahead than in a place where diligence is rare. Your humble blogger managed to complete the work assigned to him and insist on more. Not so much because doing so looked good, but because there were 8 plodding hours in a workday. Filling them up with as many tasks as possible made the time go faster. And yes, it’s hard not to get noticed when you’re picking up your coworkers’ slack and then some.
It helps to be good at and not hate whatever it is you do for a living. It also helps to quantify everything. When contract time comes up, it’s easy to point at the pile of work you’re accomplishing and compare it to the inferior molehills assembled by your coworkers. Pay equity? (We think they mean “equality”.) Heck and no. Just because employees A, B and C have identical job descriptions doesn’t mean they’re entitled to equal paychecks.
Rajiv could have done this; found opportunities to fill his shift with as much high-value use as possible. Hopefully he did. After that, he might have ordered his family to live on rice and pigeon until that credit card debt was wiped out. Again, intense and brief pain beats dull and enduring pain every day of the week.
Once you get out of the red, and not a moment before, you can start leveraging. That means investing. Refinancing. Buying assets and selling liabilities. Taking the necessary steps to remove you from a situation in which a lifetime of debt is inevitable. Because it isn’t.
You don’t need inherent smarts for this, just a little common sense. And God knows you don’t need a college degree. Rather, to start off you need a decent job, the appropriate attitude, and the belief that while you might not get rich you don’t have to be poor. Oh, and $13 or so.