Wednesday, 03 August 2016 20:51

My Daughter Just Called Asking For Money

girl on phoneLet me give you a little history...

My daughter is brillant, and independent, but she works for a small business. Last Friday was payday, but after presenting the paycheck to the bank, she found that there was no funds, and of course, the check bounced. She was penalized $35 and who knows how much the business was hit with. Guess the story is that the boss "didn't have time to go to the bank".

It made me realize one thing. 

Your whole life pretty much depends on one person that does the banking for your employer. If they screw up, then your life gets turned upsidedown.

This is exactly the reason that I don't want to have to work for "the man" anymore. It's also the reason that I want to be "The Man" too.

Depending on others to survive sucks. 

Lets face it... Anyone that is an employee of any company or business receives a paycheck. You rely on the company to make good on their payments to you so that you can in turn, make your payments to bills, and buy food, right?

In the simplest way possible, you are depending on others to survive and live the way of life that you're used to. I realized this while I was reading The 4 Hour Workweek, and now that my daughter is calling because she's in a bind, It makes perfect sense.

I'm putting one of the points that was talked about here for your consideration.

During the course of conversation, I realized that she was going through many of the same struggles we are as her parents. The money she makes is decent, but there's just not enough to save... or so it would seem, so now she's faced with two real choices, as we all are when money is tight:

  1. Make more money - Getting a second job is usually the answer for most people in this situation.
  2. Cut your expenses - She's already splitting all the bills except for food and mobile phone five ways in the house she's living at.

So the crux of the matter is that she's living right at her means. Now that her boss bounced a paycheck, her whole financial world just slammed into a brick wall. I've been there, as with many other people. 

The situation leaves you scrambling and eating $0.10 ramen until the boss puts money into the account. Again, point is you're whole world revolves around one person that holds all the cards, so to speak. If they fail, you will too. Problem is that they're not going to be the one that suffers for it. Usually, the one who cuts the checks has enough money to get by for a while.

Diversification of Income

My dad once said, "Always have a contingency plan if things go south." What he meant, plainly is that you always want to have a plan if the money dries up (even temporarily).

While some people don't have much in the bank, nor is it possible to save any (we're about one paycheck away from disaster, I'll admit), there has to be a contingency plan.

It would totally suck, but my contingency plan has always been to do manual labor. During very lean times, I have cut lawns, did odd jobs and made a living wage doing it, albiet I was working like a dog for 18 hours a day. I've made as much as $1,000 a week doing this. I know I could go out there and do it again, but the real problem is the question of how long I could do that for. I was 26 and coming home dead tired. I'd drop into bed around 11 and be jarred awake at 5am to do it all over again.

The point that I'm trying to make is that you don't want to sit around waiting for a windfall, your rich, grumpy aunt to pass, or even just to do nothing. There is no better time than to put together a contingency plan for when sh*t hits the fan.

You won't panic

Panicking doesn't help anyone... especially you. If you have a plan in your back pocket, you won't panic... you'll know exactly what you need to do in order to make it.

You Won't Mope Around

Moping around obviously won't get you out of the crisis, but when push comes to shove, it's one of the first things that people do as a coping mechanism. It's much the same as those who think that if they ignore the problem, it goes away. If it's something that's truly temporary, such as your paycheck being on hold while it clears (and you know it will clear in a couple days), then sure, just wait, but if you're not sure when the money will be available, it's time to put your contingency plan into action.

You'll Get Sh*t done

There's nothing like a bit of pressure to light that fire under your @ss is there? Working in a crisis moment will often yield more effeciency, and better results than if you didn't have issues. Obviously, you shouldn't tell your boss to intentionally miss paying you, but if it happens, you might get more done.

 Obviously, the best case scenerio is to have a steady stream of income coming from a different source in case, and this is exactly what I am aiming for. I want to automate the income generation (passive income) so that I don't have to put as much time (if any) into a 9 to 5.