My goal in life is to become financially independent. The purpose of this blog A Meerkats Guide to Life was to document the progress and to become a guide to the good life for other people. I will take you on my journey and explain to you what I came across and what I learned along the way. With these article series you can follow the journey to financial freedom step by step with all the ups and downs. You can read what I did and why I did it. This is the first article of probably a long series of articles (although you always hope for that one winning lotto ticket). In this article I will first describe the starting point of my career. Wish me luck!
This article is an english translation from an earlier dutch article published at the start of 2019.
I think it is only fair if I tell you a bit about who I am just to make sure you understand that the journey I will be making is a journey more people can make. So to start, I did not receive a “small loan of 1 million” like Trump did. Instead, as of the 1st of January 2019, I have a debt of 44.000 euro and around 500 euro in my very defensive investment account that generates around 3% return per year. My parents are divorced but I can say I grew up happy and healthy and they can step in when I struggle. Near the end of my study and the beginning of my career I can officially say I am near broke. This is mostly due to a very expensive trip to Japan (very expensive country…) to celebrate the end of my school years (YAY!). This also means that as of right now I have not bought anything new recently (clothing, glasses, shoes, coat, phone, computer). My computer is 6 years old, but a MacBook air so it still works fine. Of course I have a matching iPhone SE (first generation) from 2016 that is around 3 years old and only charges with one specific cable when I put it in upside down. Because of the current situation there are a lot of things I need to replace and pay back. I have around 300 euro’s in taxes still due (please read up on those things before you stop studying…). In February and in March I the local taxes for renting a house come in which is around 300 euro’s. I could not transfer my tuition in one go so I still have to pay 260 euro’s every month until May (so 5 months). Per the 1st of February I will start working on my first job and I get paid at the end of the month so I calculated I need around 250 euro’s to bridge that period. I will receive my tax returns back in March of 450 euro which means I have a total of around 400 euro’s in my account in March.
On the 1st of February I have started working. For practical reasons I will explain the situation I expect to have for this year as of the start of my new job. I will be honest, I have an amazing first job. Because of my conservative study choice and extra curricular activities I was able to join an international company with a fear salary and good fringe benefits. This means I earn, after taxes, around 1900 euro’s a month. I have a lease car and unlimited gas pas which costs around 260 a month but is already paid when I receive my salary. I pay 550 euro’s in rent, 150 euro’s in insurance and around 250 euro’s for groceries a month. That results in a total of 1.100 euro’s on non-essential expenditure and savings. Of course I pay for internet (€40), phone subscription (€20) and other subscriptions like Netflix/Sports/Lenses/parking etc. (€65). Until May I have to pay the college tuition (€260) a month I mentioned earlier which results in a total of €715 per month leftover. I plan to save €500 a month an spend the other around €215 on variable expenses like haircuts, clothing expenses, trips, drinks & dining out, presents etc.
Slave to the rat race
If you have read my article about the millionaires fast lane you might wonder why I decided to still get a job (slow lane) instead of start a company (fast lane). I am aware I am taking the slow lane and it is a conscious decision. There is one thing about the Millionaires Fastlane people should not forget: just because its simple doesn’t mean it is easy. I decided I also did not want to work 5-10 year a near burnout in order to have the possibility (success is never a guarantee) of becoming rich in a short amount of time. The FIRE (Financial independent Retire Early) moment has presented an alternative. Consider it the middle lane in between the fast lane and the slow lane. It means you save more and live frugally in order to retire between the age of 30 and 50 or in 10-15 years.
Everybody knows that there are people with that one great idea and the circumstances to turn the idea into into a flourishing business and perhaps even quit school young because of it. Most people, however, tend to swim along with everyone else because they still haven’t found out who they are, what they want in life and what they actually can achieve. There are practical reasons why you don’t want to take that road too. Perhaps you need a lot of money to start your company. A loan is possible but that can be difficult for some and brings risks while not everyone is a risk taker. Not everyone is comfortable living on the edge and working their butt off to try to make a company survive the first years with a high chance of it not going the way they expected it to go. Only 25% of companies last for more than 15 years.
If you do not have the skills or attitude to become an entrepreneur having a job and taking the middle lane can be a good alternative for you too. If you picked your study carefully and did extra curricular activities like it is also relatively easy to study hard for a few year and get a decent job afterwords. You can save and learn some easy investing and retire early without too much risk or hassle. It takes a little longer but you will also get there. A job has more advantage which can also be relevant for future entrepreneurs. You can create a network and experience in a skill and working field. It is not only about hardcore skills but you also learn a lot of social skills like how to deal with clients, a boss and colleagues. You can learn to lead and to get to know a market inside out. If you live frugally and save you can also build up assets that you can later combine with your learned skills and network to start a company later on. Remember that most people started their company in their 30’s.
There is nothing wrong taking a job in order to make ends meet or to get the experience and capital you need for later. A job offers most people the little stability they need in life. There is nothing wrong with starting your career with a job and deciding where you want to go from there. It is not the best idea to become rich fast, but it might just work for you.