Retire from the rat race

An increasing number of people are leaving the traditional life path. What are they thinking? Probably these.

An increasing number of people are leaving the traditional life path. What are they thinking? Probably these.

Contents

The ideal lifestyle then
The ideal lifestyle now
Think like the new rich
Think like the millionaire next door
Think like a fastlane millionaire
Think like the richest man in Babylon
Wrap-up

The ideal lifestyle then

A while back, the traditional progression of a “successful” life danced to the tune of: finish school, get a good job, buy a house, marry, have kids, and live happily ever after.

In previous generations, this approach was unquestionable. It often meant a predictable paycheque from a permanent job. It paid for the mortgage, cars, and occasional travel. As long as you showed up from 9 to 5 on weekdays, and took only the allotted vacation, and didn’t get sick for more than two days – life was financially stable. It also gave a sense of social stability because everybody did it. It was acceptable to do this like clockwork forty years or so. The hope was that when you retire, you would finally reap the rewards from your best years’ work.

Career advice ranged from “be practical” to “choose to do what you love and you’ll never have to work a day in your life” to “learn to love what you do.” With this in our career arsenal, the 40-year span was supposed to be more meaningful.

This was the only way to think about life back then. It benefited society, families, and the economy. In tangible ways, it improved the quality of life for many.

The ideal lifestyle now

Though the traditional lifestyle still works for some of us today, it’s no longer the only option. Now there are more opportunities to think differently.

Why think differently about work and life? It's not uncommon anymore to see people work like crazy so that they can buy impressive things. Things they think will make them feel respected and happy. Unfortunately, these things almost never make life more meaningful. If they do make us feel good, the feeling is fleeting. So we get back on the treadmill and run some more to get more that dose.

Do you sometimes think that there must be a better way? Do you get a gut-wrenching feeling every time you have to go to work on a job you dislike? Do you dread the weekdays? Is work mundane and unfulfilling? Do you feel stuck? Is the busywork draining your sanity?

Maybe you have other things in mind. You want to retire young. You want to travel. You want to write a book. You want to do something you’ve always wanted to do. You just want to breathe. If so, maybe it’s time to think differently.

What choice(s) do I have? If the 9-5 work situation isn't working for you anymore, here are some alternatives. This list is far from being exhaustive or definitive. There's no one-size-fits-all option. Ultimately, the way we work and live is a personal preference. Expand your options and choose what works for you. Here are some ideas.

Think like the new rich

The life of the new rich involves alternating periods of retirement and work. This means designing a lifestyle where your work, location, and schedule are flexible. You have time, mobility, and money – altogether. Instead of waiting ‘til the end of life, you get to do what you’ve always wanted to do in your best years.

It was 2006 when the concept of the “new rich” was popularized by Tim Ferriss in his book The Four-Hour Workweek. It was a radical idea then. Fast forward to 2022, and after the Covid19 work-from-home wave, this option feels more feasible than ever.

The main route to the new rich lifestyle is online entrepreneurship. The overarching process is to define what you want, eliminate lesser tasks, automate operations through outsourcing, and liberate yourself to be, do, and have what really excites you.

One of the upsides of the new rich route is that you get to have your cake and eat it too – whether it’s a Ferrari or living abroad.

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Think like the millionaire next door

In an earlier era, Thomas J. Stanley studied the financial habits of wealthy Americans, the so-called “millionaires next door”. They accumulate wealth as they live below their means. They have pretty solid financial and psychological foundations. This approach takes a lifetime but it creates generational wealth.

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Think like a fastlane millionaire

In his book Millionaire Fastlane, MJ DeMarco talks about building wealth the quick way. That's a 5-to-10-year sprint. It’s shorter than a 40-year career marathon.

The secret is to generate wealth without trading time for money. If we trade time for money, it’s difficult to earn more money. That’s because time is limited.

There are several wealth vehicles we can build to get on the faster lane to wealth. First, we can create a rental system. We can lease out an asset we already own. For example, we can lease a room on AirBnb, a car on Turo, a lawn mower or a storage space to someone who needs it. Investing in real-estate is the epitome of the rental system, but that requires that you own some already.

The other vehicles leverage technology and don’t require owning real estate from the get go. Creating a distribution system is another fast lane strategy. Amazon, Etsy, and Shopify are examples of this. By creating a distribution system, we enable exchanges. I feel this not only provides value to existing players in the market but it also helps revolutionize commerce for the future.

Similarly, software and content systems can get us on the fast lane. The archetype example of the software vehicle is to build apps and monetize them. Meanwhile, the content system doesn’t need programming know-how. It’s where we create virtual assets like graphics, photographs, audios, and videos.

These days, I see more and more successful millionaires on the fast lane. It’s tempting to think that success happens overnight. It doesn’t. It takes the fortuitous collusion of many factors. That includes showing up and taking action. Although it’s faster, it’s important to note that it's not a get-rich-quick-scheme.

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Think like the richest man in Babylon

When I think of the book The Richest Man in Babylon by George S. Clason, I remember two numbers: 7 and 5. There are 7 rules for acquiring wealth. There are 5 laws of gold (or money). It was first published in 1926 but the ideas in the book are far from outdated.

It's important to note that this is not advice from a financial professional - and even if it were - please, still do your own due diligence.

The 7 rules for acquiring wealth

  1. Pay yourself first. Always save a portion of your income before you start spending any of it. Even if you’re in debt and even if you feel you’re not making enough yet, save.
  2. Live within your means. The key is to separate your wants from needs. Know what you really need and what you could live without. That in itself is a superpower across many areas of life.
  3. Make your assets work for you. Look at what you already own and take advantage of the financial opportunities they provide. It can be as straightforward as renting out space you already own. Money itself can be put to work for you through securities and other forms of investments.
  4. Avoid risky transactions. Prioritize securing your principal. In the long run, it hurts more to lose principal than to earn little interest.
  5. Own, don’t rent. If you own your own place, much of the expenses related to it will come back to you in the form of assets. If you don’t, yet, it goes to someone else. I would say this depends on your situation. Calculate the costs and benefits - including physical and emotional - to see what works better.
  6. Ensure a future income. Plan for your retirement. Put contingency plans in place for earning. If you stop earning what you’re earning now, where will the money come from? You want to have more than one answer to this.
  7. Maximize your earning potential. Skill-up and get good in your field. Develop expertise so that you will be worth more to your employer or customers.

The 5 laws of money

  1. Save at least 1/10th of what you earn and your money will increase seamlessly.
  2. Invest what you save and make your money will work for you. If you let money just sit around, it will deflate.
  3. Consistently proceed with caution when it comes to your money. Protect your investments by learning from those who are knowledgeable about money. Gather as much relevant information as you can in all your transactions.
  4. Invest in what you know. Be smart about where and how you invest. Choose where you have the greatest advantage.
  5. Don’t get looped into get-rich-quick schemes. Be smarter about what and who you believe. Like with all advice and talks under the sun, take the information with a grain of salt.
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Wrap-up

In the past, we all had to dance to one tune. That tune was to go to school, get a job, buy a house, and make a family. We’ve come to the 21st century and with the combined ingenuity of 7.5 billion humans, we can now savour an orchestra or silence or anything in between.