Aware Brain

Part 1:

A persons happiness at any given moment is a result of decisions made in previous days, weeks, and years. So consider a scenario which would make you happy. For many humans in modern culture, it would involve being free from required work, financial security, and physical comfort. As you read through the following scenario, anticipate

Imagine a story where you are 45 years old, in the following situation:

• Retired from working
• Own a home free and clear
• $260,000 in savings

That rough outline of a life scenario would be reasonably attractive to most normal Americans. Then let’s backtrack and find a starting point that will arrive at this scenario.

You are probably thinking this is the start of some sales pitch for a real estate investment scheme, MLM program, or get-rich-quick scam. It isn’t. This is an everyday life plan. It does require working a real job. However, it does not require a high-end job that requires any degrees, special training, selling, or connections. This story is written for the point of view of a 21 year old, and walks through all of the steps to get to that point. Probably 90% of the people reading this are already older than that, maybe much older. We’ll connect the dots for how to make this work for different starting points at the end, but you will need to understand the entire routine first. Actually, this routine is really intended for starting points later in life, the 21 year old starting point is described because it is all inclusive.

So, I will base this on getting a normal, everyday job that anyone can get, for just over minimum wage. In addition, it will be only based on working part time. This is the type of job anyone can get at Wal-Mart, Home Depot, UPS, or even a fast food chain, working only about 4-5 hours per day.

Start with a 21 year old person, a few years out of high school. (No college is necessary.) So this kid has drifted around for a few years out of high school. Maybe worked a few jobs, wasted time with friends, and done all the pointless but fun things that kid/adult hybrids do.

So let’s start with that job. The national minimum wage is $6.55, so let’s figure a job at $7.25. Worked part time, for 30 hours per week, this equals $935.25 per month gross.  The typical take home pay would be about $750.00 per month. This is not a great deal of money.

As soon as the job is started, buy a house right away. Find a single family home (no condos) for between $20,000 and $45,000. There are hundreds of thousands of these all over the country, within an hours drive of almost anywhere.

Here are a few examples:

• Cape Coral, FL
• Nashville, TN
• Berlin, NH
• Indianapolis, IN
• Amarillo, TX
• Phoenix, AX
• Kennewick, WA
• Oneonta, NY

There are plenty more, and if for some reason you are in a rare location where this is not practical (NYC, San Francisco), consider moving. You don’t have to go far, probably just a couple of hours.

You will need money for this purchase, but there are still government programs that can get you in a house for 3% down, or $1200.  If you have to, sell your skis, Playstation, TV, or other junk to come up with whatever you need to add up to $1200. Craigslist and eBay will be your launching pad to a great life!

So now you have a house. Your mortgage payment with taxes included will be about $275. ($40K – 30 year – 5.5%)

Expenses:

• Mortgage $275
• Utilities $125
• Food $150
• Health Ins. $50
• Clothes/necessities $40
• Medical/dentist $10

Total: $650

That leaves $100 left over from your $75o income.  Really, it does not leave anything, because at some point there will be things that come up, such as repairs for the house, etc. But in the beginning there will be some left over.

The second part of this equation is your second “job”. You need to operate a self-directed venture, from your house. It can be anything, and does not need to make alot of income, only about $15 per day. But it has to be something you do for yourself, NOT working for someone else or a company.

It would be great if it started with something you like doing, but if not, it is still valuable. Some ideas?

1. Write blog posts or web pages for $3 per page. (5 per day)
2. Grow tomatoes and sell them for $5 per basket (3 baskets)
3. Build _____ trinkets and sell them at flea markets
4. Buy yard sale stuff and sell on eBay
5. Make web pages for Adsense
6. Do housecleaning
7. …etc

In any event, take the $110 you make from this venture each week and save it all. Don’t even spend one dime of it. so $110 per week x 52 weeks = $5720. At 5% per year interest this equals $266,000 after 24 years. So there you have it, work part time at McDonalds, and then retire with $250,000 at age 45!

Well there is a little more to it than that, and a few questions to answer. How do I get to work? Why do I have to sell tomatoes? I will be 45 in 24 years, why is the mortgage 30 years?

The second “job” is key to the results. Yes, the income from this venture becomes the nest egg, but there is much more to it than that. In fact, it would be easier to work the primary job full time to get the extra $15 per day. However, that defeats the beauty of the overall plan. The primary part-time job is going to suck. Stocking shelves. Flipping burgers. waiting tables. Telemarketing. Whatever. By associating this undesirable job with everyday expenses, it will instill the idea that expenses = pain.

Now, the second self-employed venture might start out as being undesirable as well. This is why it is recommended that it be based on something you like doing. If you like playing video games, then buy and sell them. Write blogs about them. Write how-to manuals and sell them online.

Operating the self-directed “business” will have more value that the paltry $110 per week it generates. It will more importantly develop your knowledge of creating income from your own efforts. You will learn that it involves being personable with other people, being interested in observing the world around you, and making each activity easy and efficient. At the same time, you will learn that “work” is really not work when YOU decide where, when, and how to do it.

Over time, you may end up trying many different activities. You might take one that works well and expand on it. You will abandon some that don’t work out. You will abandon some that you will discover later you should have stuck with longer. Ten years will fly by, and by the time you are 30 you will suddenly discover that you are an expert at managing a business.

While you may never decide to formally manage a business with other employees, this skill is exactly the same as what is needed to successfully manage your own personal affairs and contentment in life. It is exactly the same skill that many people lack, that you see around every day, which causes them to be indifferent about their every day life. This applies to even those who are “successful” in the modern day definition of the word, meaning that they have a high paying job, a nice car, and and a big mortgaged house. But as you see, many are not satisfied.

This learned skill will also help you make the best personal decisions in life; what spouse to pick, what to do when there is a family problem, how to take advantage of personal opportunity, and how to deal with challenges. Most importantly, as you learn that generating production from your little enterprise requires dealing with and helping other people, you will be a more positive member of society in general.

In reality, what will probably happen is that one of your personal enterprises will turn into a gold mine, and it will generate enough income for you to quit your burger flipping job. Alternatively, your high level of responsibility will be surely noticed in your primary-job workplace, and you will be given raises and promotions as the years go by.

It will be so drastic, that you will have to turn down a few promotions that would put you as a full-time employee. Which brings us to a few traps to avoid, as your success builds.

• Don’t accept a full-time job
• If you have money left over from your primary job, don’t spend it, put it towards your mortgage principal
• Don’t take on additional expenses (car, loans, gym membership, etc.)
• Don’t us a credit card. Ever.

Let’s leave it there for now, the next posts will answer the following questions:

• What do I do for transportation?
• What do I do if I start making $50,000, $70,000, $100,000 per year?
• Which house do I pick out to buy?
• Do you want me to stay working at Wal-mart when I am 35?
• What do I do for fun and entertainment?
• How do I eat for $150 per month?
• What if I am already older than 21?
• What if I am already 45?
• What the hell kind of $40K house will I be living in?

~ by Dave on December 15, 2008.

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