Rich Dad Poor Dad is one of the best personal finance books ever made. It is a book that is simple to read and uses a lot of stories to keep the audience engaged. It contains a plethora of lessons and learning but for this post we would just be discussing about the trap that is employment.
I am in no way saying that employment is bad. It is a good way to start, earn some money to pay the bills and to learn. However, in today's day and age of lesser and lesser job security, relying on employment alone is a dangerous proposition.
Here is an example of a scenario that happens in real life. When you graduate, you are eager to find your first job and earn your first paycheck. You don't really care much for the pay. You are too happy working for money perhaps for the very first time. Later on since you are earning your own money, your parents no longer support you and you are forced to pay for your own bills. Since your job is your only and primary source of income, you fear losing it. I mean what about food on the table, the utility bills, the rent and the credit card bills. You have to have a way to pay these. This fear drives you to do things like work extra hours and sacrifice personal and family time for fear of losing the job.
I am in no way saying that employment is bad. It is a good way to start, earn some money to pay the bills and to learn. However, in today's day and age of lesser and lesser job security, relying on employment alone is a dangerous proposition.
Here is an example of a scenario that happens in real life. When you graduate, you are eager to find your first job and earn your first paycheck. You don't really care much for the pay. You are too happy working for money perhaps for the very first time. Later on since you are earning your own money, your parents no longer support you and you are forced to pay for your own bills. Since your job is your only and primary source of income, you fear losing it. I mean what about food on the table, the utility bills, the rent and the credit card bills. You have to have a way to pay these. This fear drives you to do things like work extra hours and sacrifice personal and family time for fear of losing the job.
Lets just assume that because of your diligent efforts, your boss noticed you and decided to promote you and give you a hefty pay raise. You suddenly become overjoyed by this new found wealth and your mind suddenly starts coming up with things that you could buy - a new gadget, a new car, a new house and whatever you could imagine. You suddenly become a bit greedy and start to bite off more than you could chew. You approach your friendly neighborhood bank and decide to apply for a personal loan to get that big-ticket item that you so desire. You end up with a lot of debt and get tied to it for years and even for some for the rest of their existence.
Since you now are the proud owner of say a 25 year housing loan, you now more than ever cannot afford to lose your job. I mean a couple of defaulted payments and your dream house gets repossessed and ends up in the bank auction. So you end up having the emotion of fear again. You fear losing that job more than ever since so much is at stake. This is just a simple example. Imagine if a person was just relying on his job and had to pay for both a housing and car loan, for food, housing and utilities, for credit card debts and for his kid's education. Wouldn't that job mean the world to him? Wouldn't he do anything short of killing someone to keep that job?
Fear and greed are powerful human emotions. You can either be a master to them or they can be you master. The choice is yours.
Since you now are the proud owner of say a 25 year housing loan, you now more than ever cannot afford to lose your job. I mean a couple of defaulted payments and your dream house gets repossessed and ends up in the bank auction. So you end up having the emotion of fear again. You fear losing that job more than ever since so much is at stake. This is just a simple example. Imagine if a person was just relying on his job and had to pay for both a housing and car loan, for food, housing and utilities, for credit card debts and for his kid's education. Wouldn't that job mean the world to him? Wouldn't he do anything short of killing someone to keep that job?
Fear and greed are powerful human emotions. You can either be a master to them or they can be you master. The choice is yours.
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