Dear daughter,
Once upon a time, there was a guy who studied a lot.
He was always reading something new.
This helps him to learn new words, get a better vocabulary and speak better.
His studies, make him get a well-paid job.
Money was not a problem to get the basic things he needed, and few spoils from time to time.
Because of this, he bought an expensive car. He needed to have a car.
But, he used leverage (a loan from the bank) so he can get an expensive car he couldn’t afford.
And each month, he now has to pay to the bank a certain amount of his hard-earned money to pay for the vehicle he is using or the car he borrowed from the bank.
Using debt
Every day, the guy will read for at least 1 hour to learn new things. To learn better how to fit into the system.
Until one day, he realized he was in a rat race. This means that you earn more, but you also spend more. As a result, you are at the same place, financially.
The rat race is the same as a hamster running on a wheel. The faster the hamster runs, the faster the wheel turns, and the hamster is still at the same place.
When he learned this, he made the following statement:
“I don’t want to be the hamster in the wheel that goes nowhere”.
So, he continued reading, but this time, the book has to teach him something that will help him to go out of the rat race, to stop being the hamster in a wheel.
I mean, who likes to be compared with a hamster running on a wheel. Not him, for sure.
This is one of the reasons why he reject a temptation that came on his way.
Getting out of the rat race
Finally, he discovered a simple method to stop being the hamster in the wheel. The method was laid out in several books in different ways.
Here, I summarize for you what he learned.
Steps to get out of the hamster wheel:
- Live under your means. In plain English, spend less than what you earn.
- Have some money for emergencies (three to six months of your monthly expenses).
- Get out of debt.
- Invest, regularly, the money that you don’t spend.
- Learn something new every day.
- If one day you earn more than you usually do, invest the extra money (do not spend it to buy something you probably don’t need). In the long run, that money will work for you, to your benefit.
- Stop wasting your time. Big time wasters: watch tv, chit-chat, gossiping, sleeping more than you need, being lazy.
- Don’t work for money. Have the money work for you.
And ever since that day, he didn’t buy anything that he couldn’t afford. In other words, he wouldn’t borrow money to buy things.
He always has money for emergencies.
He invests regularly.
And most importantly, now he knows when debt is bad and if debt is worth it or not.
Love you, Dad.