Do not toil to acquire wealth; be discerning enough to desist. —Proverbs 23:4
Jailbreak is an elusive state. Usually, our day-to-day lives provide us with distractions aplenty, each one in its insidious way keeping us from a quiet consideration not only of how to achieve Jailbreak, but also of even what Jailbreak means to us. Sometimes, we self-distract with mental junk food; other times, we sit in analysis paralysis over some decision. At my worst, all of my distractions will pile onto me just before bed, and I will lie awake in interminable distraction…which not only accomplishes nothing, but ensures that the next day I will be exhausted and unable to consider anything, much less difficult-to-grasp topics.
But let’s face it: among the distractions, both the imposed and the self-imposed, few are as all-consuming as money. Most of us spend eight hours a day—half of our waking hours, five-sevenths of the days of the week, working at jobs in order to bring in money. In the best case, we’ll spend as little as only one extra hour preparing ourselves to do this…dressing, commuting, etc. Because we spend so much time and energy working to bring in money, we also spend a good bit of time “decompressing” at the end of the day. And for the ambitious, the notion of a 40-hour work week is laughable; the reading of career-oriented books, attendance at “networking” events, and planning a career trajectory all combine to turn free time into “quasi-work” time. All told, the pursuit of a paycheck, though necessary and good, can consume virtually all of one’s time and mental energy, in one way or another.
Some people live for this. The adrenaline rush of job performance is a reward in itself. The feeling of power and success that comes from moving up an organization’s ladder, or the heady glee that comes from leapfrogging the ladder altogether by jumping between companies, or the self-reliance that comes from the entrepreneurial push to create a new personalized job, all can provide a sense of meaning and purpose. A lucky few also find the work that they love doing so much that they would do it for free…and the paycheck is just a way to make sure they don’t have to do anything else.
Whether that’s you—or whether you are the polar opposite, and hate laboring in your personal coal-mine—one question we all face is: what do we do with this money that we earn? Some things are given. We acquire food, shelter, and clothing, and provide the same for those who depend on us. We provision some security services: e.g., health insurance. And we go on to get some convenience and entertainment: cars, cell phones, televisions, more clothes, food in restaurants. We all have our own lists. And we all choose to draw the line somewhere: this I will buy; that I will not buy.
One thing that too few people buy is one of the most important things that can be bought. Freedom. The problem is that you can’t find it in any store. If you go looking in stores or online or in advertisements, you will only find clothes, and restaurants, and electronic gadgets, and cars, and cable packages. No freedom anywhere. Nobody makes money off of freedom…except you. So nobody is going to try to convince you to buy freedom…except you.
Money can’t buy you love…never more true words were spoken. Can money really buy freedom? Yes, and no. Money can’t buy freedom from your inner demons. It can’t buy freedom from your past. Too many celebrities and lottery winners end up broke and in rehab because they think they are buying their way to happiness with their enormous riches. No, money can only buy you freedom from one thing: itself. Fortunately, since so much of our lives revolve around the earning and spending of money, money’s limited power to free us from itself is actually exceedingly powerful.
To understand how money can buy freedom, first understand how it can buy imprisonment. For $700, you can buy a new iPhone and pay $70 per month for a service plan. For $1,000 down, you can buy a new SUV and pay only $400 per month for it over the next five years. For $5,000 down, you can buy a beautiful motorboat and pay another $400 per month for it over 10 years. For $50,000 down, you can buy a nice suburban house and pay $2,000 per month for the next 30 years…and taxes, maintenance, and HOA fees in perpetuity. And for absolutely free, you can sign up for cable TV, magazine subscriptions, streaming video services, club memberships, warranties, service plans, and insurance to cover loss, theft, and destruction of all the things you have already bought. You can get house cleaners and landscapers for your nice house; good dry cleaning for your nice suits; stabling for the horse that you can’t keep in the back yard. Go a little further, and you can also engage a pilot to fly your pretty new executive jet. And you can always sign up for credit cards or revolving credit lines to cover anything you can’t quite pay for…at the cost of 20% annually.
Having money allows you to acquire things; those things require money to maintain, upgrade, or replace. The more money you have, the more things you can buy; the more things you buy, the more you commit yourself to spending. It need not be said that the more you commit to spending, the more you must work to earn what you have in effect already spent. And—violà—you have bought your way into a comfortable, middle-class Jail. There will be no leaving unless you serve out your sentence—30 years at 3.7%—or you go bankrupt. One way you walk out into the daylight, gray-haired and grateful to finally be out. The other way is just a transfer to a place far worse.
It doesn’t have to be this way. It is too often this way, but it doesn’t have to be. The path away from this Jail—toward financial Jailbreak—is probably the world’s worst-kept secret, but it is so rarely trod. It has been featured in books: The Millionaire Next Door comes to mind. It is in Thoreau. It’s in the Bible. There have been no shortage of people who, in the course of history, have pointed out that stuff doesn’t make you happy, that debt is ruinous, and that making yourself feel rich by spending like you are rich will just make you poor.
In the context of Jailbreak, money distracts. It distracts when you earn it—especially if you are working a job you would rather not be working, but regardless, if you are dependent upon the money, you are never truly working on your own terms. It distracts when you spend it—you have to spend a lot of time figuring out what you want to buy and then buying it. And it distracts in its aftermath: you have to maintain your stuff, you have to service any debt, and you need to worry about whether you will be able to do any of it.
Thoreau said—and I agree with him on this, though I don’t agree with him on everything—“A man is rich in proportion to the number of things which he can afford to let alone.” I can attest to this from personal experience. When I was in graduate school, I was the only one among my friends who didn’t own a car. They told me that I should get one—we all made pretty good stipends, after all (it’s good to be an engineer). But in truth, I saw no need. I lived just off campus, where the most extensive libraries I had ever seen housed almost any book I could ever think want. The university symphony played almost monthly in the concert hall. I walked across the beautiful forest-and-castle campus to my lab every day. I occasionally had the grocery store deliver groceries, or I would walk to the nearer (but dearer) organic-foods store for small supplies. All my needs were easily met without a car, and I could not see at all why I would want to spend the time to 1) find a car, 2) buy the car, 3) register and insure the car, and 4) maintain the car. Perhaps there were some other things I might have done occasionally if I had a car. But I can say with certainty that my life was simpler without one, and I read more books and took more advantage of the university’s resources. Life was also cheaper. Based on that single decision to not buy a car, I was able to pay off all my remaining undergraduate student loans by the time I finished graduate school.
If you need to watch the latest TV shows, or all the college football games, you not only have to devote $70+ per month to your cable subscription, but you need to devote several hours per week to watching it all. If you need to be a wine connoisseur, you not only have to devote a few hundred dollars per bottle to your collection, but you have to spend time finding and acquiring the wines, and devote space and electricity to the climate-controlled wine cellar. If you need to have the latest electronic gadgets, you not only have to walk the $700 iPhone upgrade treadmill, but you should really be reading the industry news to make sure you know what features you’re really after and what you can brag about when showing off your newest model.
Do you see? Not only does all of this stuff cost money…it costs you your attention and your time, three times over, once when you earn the money, once when you spend the money, and once when you use and maintain the stuff. With all your time taken up in the pursuit of stuff, where will you find the time to Jailbreak?
So what do you do instead? How can money, rather than being a distraction, help you achieve Jailbreak? I suggest that getting to the answer looks something like this:
- Choose something you want and have but could do without (cable TV, new electronics, new leased cars…).
- Get rid of it.
- Stop and enjoy your new free time. Consider what else you might get rid of to create even more free time.
- Invest the money you’re now saving in paying down debt or in income-producing assets (stocks, bonds…)
- Stop and enjoy the mental freedom of knowing your debt burden is permanently smaller, and growing smaller by the month. Or that your passive income stream is permanently larger, and growing by the month.
There are a ton of specifics to get into on this topic: what should you eliminate? How should you invest the money that you save? Just how much of a standard middle-class lifestyle can you get rid of and still enjoy a decent quality of life? (Or is that even a good question?) We’ll discuss some of these things here in the future. But they have been talked about an incredible amount in the personal-finance blogosphere already. Some of my favorite blogs on the topic are Mr. Money Mustache, Go Curry Cracker! and jlcollinsnh. For loads of specifics, these are invaluable resources.
To wrap up, then: just how does all of this talk equate to money buying freedom? The simple answer is: money first buys you freedom when you can have it, and not feel compelled to spend it. It buys you more freedom when you can choose to buy things that give you back more money (investments). It will buy you a final dose of freedom when the investments that you have bought produce enough money to cover those things that you still feel compelled to buy. And that is complete financial Jailbreak. You have redeemed a huge chunk of your life from the pursuit of money and the stuff it buys—and are now free to pursue Jailbreak in the rest of your life.