I still haven’t answered the question I asked
yesterday. I think the problem is still
relevant, but I don’t know the answer.
It’s a problem that requires us to look at the whole scope of what our
life is doing now in order to formulate a plan on what we should be doing. The end result of that “should” is something
we need to create a life that will sustain while we do other things. Money without work, as you were. And that really, is the goal.
I’m not talking about free money. I’m talking about money earning more money,
and providing the end user with enough money so work isn’t a requirement. It’s the point at which you can enjoy a
semi-permanent retirement that I want.
The goal is not to retire. The
goal is to get to the point where you don’t need a job you don’t like to make
money and pay the bills. Once that
position is reached, then one has to spend time doing what they feel they
really want to do, as opposed to what makes the most money.
And I think I figured out the answer while taking a
shower this morning. The answer is to
pay off debt. Paying off debt yields the
best rate of return (so long as you don’t charge that debt back up again). Now, unless your investments are great and
awesome, more than likely you are getting between 6 and 9% annual rate of
return. Which is about the same rate of
increase as all the debt you happen to have.
Unless you have credit cards, and then it’s like 14%.. But think about this. If I pay off an extra $20 on debt, then that
is less debt to accumulate interest so the debt gets paid off faster.
Now, the psychological part of the game is convincing yourself
of the math that you already know is correct.
Because paying off debt really doesn’t seem like investing or getting a
rate of return. Maybe that’s the next
question to answer.
No comments:
Post a Comment