On my last day at a job at an Internet Marketing company, the owner/CEO addressed to everyone in deadpan joking manner, “You’re all here to make sure that I’m set for retirement.” The room was so silent that you could hear a pin drop. To his credit, he quickly recovered, and acknowledged that comment didn’t help morale. But in a very blunt sense, he was telling the truth. Everyone there was to make sure that the company succeeds. In return the company paid them regularly for the duration of the employment. There was no further obligation. If the owner of the company decides to sell the company one day, and retire, he could. Everyone else will likely have to find other employment.
I have no regret in quitting my job and starting my own business. The jury is still out whether it’ll succeed. But I do know that I’m a lot happier and less stressed. One of the biggest drawback of being employed is that it kills initiative. By having a manager, you always have to seek that person’s approval. When you’re on your own, you’re on the one that makes the final decisions.
I’m not saying everyone should run out and start their business. But for me I rather be in control of my own financial destiny, instead of be dependant on someone else. That’s why I decided to stop working to make others rich, and mind my own business.
Money exists because of debt. If there’s no debt, then there’s no money. The current economic depression is caused by the default of trillions dollars worth of debt. This destruction of money causes deflation, where money becomes scarce, and more valuable.
So what happens next is that economic growth slows down. Unemployment goes up. More loan default happens. And the cycle repeats. The Fed decides to solve this problem by creating massive amount of money from nothing, thin air, a snap of the fingers. It’s a fight they will definitely win. Heck money doesn’t even need the printing press to exist these days! Just go into the computer and add a few extra digits, and viola, instant more money!
My predication is that eventually there will be a lot of money. It just won’t worth as much. For a recent lesson on hyperinflation, check out the Zimbabwe money. 
I’m not saying that we’ll be walking around with $100 Billion Bills, maybe just $1 million, but instead creating money from nothing is a slippery slope that we’ve been falling for quite a while even before the whole economic mess. Now the crisis gives the Government the power to create & spend an unprecedented amount of money. So yeah the chances for inflation, even hyper ones in the years/decades ahead is pretty high.
So what should a cautious person do? Maybe buy some gold. There’s only so much of it around, and has a proven track record of retaining its value throughout history. If you don’t want to own the actual stuff, then at least go for the paper certificate, like GLD. You don’t have to have everything in Gold. But get some insurance policy against losing big time if the whole system actually collapses.
I’ve given long rides to people where I felt generous and just let everyone off the hook,not paying the gas money, often at huge expense to myself. But I’ve noticed a pattern perhaps it was a reluctance to ask for the money as if that’d be rude. And that’s really stupid. Because in all fairness it’s my money! So now, I just ask for it. And I’ve found that there really isn’t any difference in people’s reactions.
These days, almost everything is getting more expensive. It kind of sucks for people that saves money because it’s like a hidden tax that steadily erodes your purchase power. So there’s definite an incentive to spend it, but wisely. Heck, first take care of the basic necessities, then invest rest in stocks or gold, the former if you know how to read the financial reports, the latter if you don’t.
The basic cause is because the Fed is keeping the interest rate low to stimulate economy. The low borrowing cost creates a lot of money suddenly that dilutes the existing purchasing power. Here’s a link that explains how Money as Debt works.
It’s kind of funny. But ever since I was a kid living in China during the 80s, still a time when most of locals talked more about communism than capitalism, I knew that I wanted to be rich. And until I was in my early 20s, I thought of wealth in terms of the accumulation of money. But it was after reading Rich Dad, Poor Dad that I began to think of cashflow as the means for financial independence.
It’s actually a very simple formula. When your passive income, or money that flows in even when you don’t have to actively work, exceeds expense, then you are essentially financially independent. Of course how you build that passive income requires hard work, unless you win the lottery or get a generous inheritance. I had planned on 2 ways to achieve my dream, real estate & business startup, and originally planned to do the former. However, being rather conservative with money, I thought that the housing market was outrageously expensive, a bubble waiting to pop. So far, living in Seattle area, I’m still waiting for it to happen…
The other option is to build my own Internet publishing business. Having the experience in the industry in my previous jobs, I feel pretty confident about my success. But I still work like a manic to get if off the ground. It’s a risk that I willing to take for a better future.
It’s a good question and one that most employees have asked themselves as they toiled for often unsteady paychecks and mind-numbing work. It wasn’t openly discussed in school and certainly not at work. Instead the expectation to make a living is to get a job and earn an income. So most people do that. Work hard, get more responsibilities, which usually result in a lot more stress, but not necessarily a lot more pay. Then marriage and kids suddenly provide urgency to work even harder. But deep down most people feel like they’re going nowhere fast. Unless the managers are actually family or relatives, they aren’t going to look after the employees’ best interests. The obligation ends with the paycheck and occasional perks & bonuses to extract maximum productivity at minimum expense.
Instead the answer to financial freedom lies with starting your own business. Save enough money so that you don’t have to worry about bills for a certain period time. Think hard about what you want to accomplish, work out a plan and then build your business. It’s not for everyone. But if you happen to ask that question often enough, it just might be right choice for you. That’s what I did. As of the beginning of this month, I’m no longer an employee, but instead a business owner. And I love it! 