How to Escape the Rat Race
Page 1
How To
ESCAPE THE RAT RACE
Four Keys to Acquire the Life of Your Dreams
Sherry Peel Jackson
© 2016 by Sherry Peel Jackson
Heartworks Publications, LLC
P.O. Box 1085
Cumming, Georgia 30028
www.heartworkspublications.com
All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher. The only exception is brief quotations in printed reviews.
All Scripture quotations are taken from The New King James Version / Thomas Nelson Publishers, Nashville: Thomas Nelson Publishers., Copyright 1982. Used by permission. All rights reserved.
Layout by Ginger Marks
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Library of Congress Cataloging-in-Publication Data
Jackson, Sherry Peel
How To Escape The Rat Race,
Four Keys To Acquire The Life Of Your Dreams
ISBN: 987-1-943254-03-3
1. Financial Planning
2. Wealth Creation
3. Business Creation
Kindle edition
CONTENTS
INTRODUCTION
SECTION ONE: DECREASING EXPENSES
How To Decrease Expenses
How To Eliminate Debt
How To Make And Keep a Budget
Knowing How Much You Owe
What’s Good and Bad About Interest?
What About Borrowing and Lending?
Why Impulsive Buying Kills Your Dreams
SECTION TWO: INCREASING INCOME
How To Improve Your Finances
How To Improve Your Net Worth
How To Increase Your Income
What About a Home-Based Business?
What is the Ideal Home-Based Business?
What About Taxes and Home-Based Businesses?
Why Teach Your Children About Money?
What’s Important About Giving Back?
SECTION THREE: SAVING
Why Should I Save?
How Should I Save?
Where Should I Save?
SECTION FOUR: INVESTING
Where is the Road to Wealth?
How Do the Wealthy Stay Wealthy?
CONCLUSION
What is Your Recipe for Financial Freedom?
Two Possible Futures
EXHIBITS
INTRODUCTION
Hi. My name is Sherry Peel Jackson, retired Certified Public Accountant and Certified Fraud Examiner; and former IRS agent.
I’ve been teaching about finances for over 30 years, and have seen the results of the vicious cycle called “the rat race”—mental breakdowns, broken marriages and even suicide. I’ve even seen people resort to crime, such as embezzlement, just to get relief from the drudgery of the race. Of course there’s a better way.
There are many financial gurus out there who tell you all the wrong ways to escape the rat race. They’ve told you to do everything from get an extra job to sell your house and live in a commune. Many of you have followed their advice but it didn’t free you from the race.
When the market crashed in late 2008, millions of people lost over half their savings and retirement funds. Over ten trillion dollars in savings was transferred from the middle class to the ultra-wealthy. That event sent thousands of people into a tailspin that will have them running the rat race for the rest of their lives, and even thousands more had to delay retirement or return to work, because they weren’t preparing themselves to get off at the next exit ramp. They listened to traditional advice from traditional financial “experts” and they lost their shirts, literally.
Wealthy people have escaped the rat race. Do you want to escape? Here’s where you learn how. The wealthy people that I interact with haven’t followed traditional methods in decades. Some of them never followed the television guru’s at all. They don’t invest in the traditional manner that we’ve been taught via main stream media.
In this book I will show you the steps to get off at the next exit ramp. You’ll learn how to be financially free by decreasing your expenses and increasing your income. You’ll also learn the proper way to save for future purchases and to invest so that you will have resources in your latter years. You can be out of the rat race in as little as two or three years if you prepare and follow a plan. You’ll also learn how to help others escape with you.
This book contains four sections; keys to acquire the life of your dreams:
· Decreasing Expenses
· Increasing Income
· Saving
· Investing
Each of these sections will comprise several chapters to bring clarity to the strategies that will free you from the rat race.
I’ve traveled to Canada, Europe, Africa, East Asia, Malta, Central and South America, and the Caribbean. In many of these places there is no middle class! The United States is not far from that point! The United States is becoming like those other countries that have only the rich and the poor.
The education that you receive in this book will show you how you can avoid landing in the poor category, or escaping the poor category if you are already there.
This book does not contain legal advice. This book is designed to provide accurate and authoritative information pertaining to the subject matter covered. It is sold with the understanding that legal, accounting, or other professional services are not included. If you need legal or accounting advice, or other expert assistance, please seek the services of a competent professional.
Every effort has been made to make the course materials current. Laws affecting our finances are subject to rapid changes, however. Congress has authority to modify the law, and it has done so on numerous occasions in the recent past. Court decisions and rulings may significantly affect the applications of financial laws to individual circumstances. Such changes may affect the accuracy of this book.
This information comes from over 30 years of study and experience, from one who has run the gamut of making six figures a year to being flat broke, and from observing others in the same situation. This perpetual rat race is an epidemic in our culture and is slowly killing us mentally, physically and financially. Let’s get started on our journey out of the rat race!
SECTION ONE
DECREASING EXPENSES
First, I’d like to talk to you about implementing a plan that will help you become debt free and stay that way.
Becoming debt free today is a very daunting task. Current statistics reveal that Americans have a negative rate of saving, meaning that we spend more than we earn. We have created a massive amount of debt, and we are witnessing devastation around the country because of this debt.
I want you to avoid the coming economic earthquake, and you can if you take the proper steps. Time is of the essence.
As I interact with people on a regular basis I find that many are in debt because they are self-indulgent. Self-indulgent people have tell-tale signs:
1. Buying items without thinking about the bills that are already due.
2. Living a lavish lifestyle to try to impress others.
3. Buying or leasing a new vehicle every two years.
4. Having closets full of clothes, many with the tags still on them.
5. Always talking about department store sales.
6. Making sure that everything they buy carries a well-known name brand.
One of the hardest things for people to do is decrease their expenses. Whether out of habit, pride, or for whatever reason, people don’t seem to be interested in d
ecreasing their expenses. They always talk about making more money to make ends meet, but never mention cutting the grass themselves or doing their own hair or nails.
The fastest way to have extra income is to immediately decrease your expenses. Write down your monthly income and all of your monthly expenses in a notebook. Then decide which ones to reduce or eliminate. For example, if your monthly income is $3,215 but your monthly expenses are $3,795 then you are spending $580 more per month than you’re earning! It also means that you are probably floating this overspending with credit card debt that is steadily mounting. The types of expenses that you should consider decreasing or eliminating are:
· Gym memberships—walk around a park or your neighborhood
· Beauty salon, barber shop and nail shop—do it yourself
· Eating out—cook more
· Car detailing—wash your own vehicle
· Clothes and Shoes—wear what you have or shop at thrift stores
· Cable TV—read books that will help improve your finances
A woman came to me in desperate need of financial counseling. She had been spending on things that she didn’t actually need and things that she could do herself. When I told her that she could at least even out her income and expenses by eliminating many of her discretionary expenses and that she could get ahead of the game by eliminating entertainment and music all together for a while, she was very angry and did not want any more counseling. Unfortunately, she is not unlike many Americans who want to live a lifestyle that is higher than they can afford. If you want to become financially free, you must get out of the overspending syndrome.
Over the years I have heard of or have developed creative ways to improve my finances by cutting costs. I have listed a few of the ideas below and I will explain the reasoning behind them:
· Make out food menus for the month. Make a shopping list and only buy what’s on the list. Some people are very good at shopping for only what’s on the list, but many are not. You will buy much more than what is on the list and go over budget time and again if you don’t develop discipline.
· Use coupons—these are little jewels of saving. I heard of a woman who was able to purchase a good used car using coupons. Every time she went to the grocery store, she would get the receipt with the amount of money she saved and put that amount in a jar. For example, if the receipt said she saved $2.93 during that grocery store trip, she would put $2.93 in the jar. The jar turned into a box and after all was said and done she had over $3,000 to purchase her car! Many people are not going to be that disciplined, but this is a sure way to help with your finances.
· Don’t go to the grocery store hungry. Every single time I go hungry I overspend by at least $20. When I must go to the store and I am hungry because I have been on the run, I will stop at a convenience store to buy a small pack of peanuts and eat them before I go into the grocery store. I become more sensible and don’t go crazy in the store when I practice this procedure.
· Buy in bulk if possible. Food co-ops are available in some areas. Stores like Sam’s Club, BJ’s and Costco have some things in bulk for a lower price. Be careful, however, because sometimes these items are not any less expensive than they would be at a regular grocery store.
· Use a calculator to total your store purchases. When you have a set amount of money to spend and you do not monitor your spending, it can be embarrassing. For example, if you go to the grocery store with $100 and start dumping items into the grocery cart without keeping up with the prices, you could end up at the checkout counter with $113 in groceries and have to start putting things back. This happened to me once and once was enough! When I am shopping for multiple items, I bring a small calculator, paper, and a pen. Many people don’t do this because they just have the total debited from their checking account, but this is not good for your budget. If you have $100 allotted for food and you are not careful, you will blow the budget in other areas by not monitoring your food purchases.
· Use cloth napkins and rags instead of paper towels and napkins for cleaning. I know a family that is having severe financial problems. When I went to their home, they used paper plates, napkins, plastic forks, cups, spoons, and paper towels. I asked them why they used all this picnic paraphernalia instead of regular cups plates and silverware. The response was surprising. The husband said, “Nobody likes to clean up, so we just eat and throw everything away.” They ate out quite frequently; which we will talk about later. When your budget is tight, you can save a lot by using regular kitchen goods, cloth napkins, and towels that can be washed and reused. Using these can save hundreds of dollars a year and those funds can go toward getting you out of debt.
· Rarely eat out. I understand that sometimes you have to attend luncheons and parties, but when you are in debt, one of the main things that will keep you there is eating out. The average square meal in a restaurant will cost you about $20 with the tip. However, if you cook that meal at home, it will cost $7! Many people who are in debt do not realize that eating out is a big part of the problem. Convenience sometimes has to be sacrificed for good sense and time at the stove.
· Try to shop for advertised specials. Many people, like me, don’t like to go grocery shopping. It’s one of those necessary evils. If you go to the store in a hurry and don’t pay attention to what you buy, you could lose out on lots of savings each trip. For example, if you just grab your usual brand of peanut butter from the shelf and toss it in the buggy, you may have missed out on the fact that the comparable brand, which is sitting right next to it, is 80 cents less! Many stores have newspapers with advertised specials each week. If you read over the specials for your favorite grocery store before you go shopping, you can rack up on good savings. This also works if you are shopping at discount or department stores. These retailers also have specials and discounts advertised in the Sunday newspaper or on line on a regular basis. One thing that will kill this savings strategy is if you hop all around town to get all the specials; you will waste more in gas than you will save. Select the store with the most specials that you are planning to take advantage of and go there. You will save on your purchases and on gas.
· Use non-name brand items. Because of advertising, many people prefer to purchase all name-brand items; however, most generic (not name-brand) items use the exact same ingredients, and there is often no discernible difference in the product beside name recognition. I have started using generic paper goods when I shop. I even get generic cold medicines if the ingredients are exactly the same as the popular brand.
You can use your own judgment about using name-brands. I bought some generic canned vegetables in the mid-1980s and found a grasshopper in the can. I threw it out and went back to name-brand canned vegetables. In the mid-1990s I again tried the generic canned vegetables. Incredibly, I found a moth in that can! I stopped buying canned vegetables all together and started buying frozen, then fresh ones after that. You have to decide for yourself how you want to save by using generic products, but at least give it a try.
· Don’t go berserk during Christmas; hand-craft gifts or just buy Christmas cards. Christmas has become a time of getting people further in the hole by making them feel like they must get a gift for everyone in the entire family. I personally know many people who buy gifts for nieces and nephews that they don’t see but once a year, on Christmas. By mid-January when the credit card bill comes, they are uptight because they spent all that money out of pride or guilt. When I was younger I decided that I would not get into that trap. I bought Christmas cards for everyone and I bought my parents gifts. When friends and relatives bought me gifts, I thanked them but refused to feel guilty.
After a few years, I became known as the broke Jackson because I didn’t go into a spending frenzy during Christmas. However, now those same folks who were calling me names are in financial turmoil and asking to borrow funds from me. In the long run, it is not wise to spend a lot for the holidays. It should be the heart that counts. Make gifts if you have thos
e skills, or just buy Christmas cards until your financial situation improves drastically. You will thank yourself in the end.
· Take vacations at friends’ homes in distant cities, or join a house swapping group. This may sound outlandish, but you can save thousands of dollars a year this way. If you have a relative or friend on the west coast and you are on the east coast, you can swap houses for a week and have a great vacation, saving between $800 and $2,000 that you would have paid on hotels or resorts. You can cook instead of eating out and save hundreds on food. People around the world have created house swapping groups; they have very strict standards and rules to be a part of the group, but once you join you can virtually travel around the world and stay at someone else’s home.
I have a friend in San Diego who is a part of a house swapping group; she joined years ago and she is glad she did. As long as she posts her home as being available a few weeks a year, pays a small dues fee to keep the Internet site up and current, and keeps other group rules, she can travel the world. She goes on the group site and keys in her destination of choice to see if anyone has a home available to swap during the time that she wants to travel. If there is a home available then she registers and she is on her way. See if you can find such a group to join and start saving thousands!
· Read and play board games instead of going to the movies every week. A trip to the movies averages $20 per person if you buy popcorn and drinks--$80 for a family of four! Many families go to the movies every week even though they are in severe debt, using the excuse that they need relief from the stress. However, there are several less costly ways to relieve the stress of life. One is to play board games. In the 1970s, my family and others got together on weekends and played board games. There were games for adults, teens and young children to play, and we had fun interacting with each other and building strong friendships.
Nowadays, everyone is glued to the TV or movie screen like zombies with no interaction and relationship building. The TV will distract you from achieving the things you need to achieve, like finding ways to become debt free, bonding with your family, and creating wealth for your future. The folks on those “unreality” shows, talk shows, and sitcoms are not going to be there to bail you out when the excrement hits the portable cooling device in this country, so turn off that electronic intellect reducer and get busy helping yourself and your family become financially free!