Welcome to Publius’s Newsletter by me, Publius Moneta. American on the simple path to wealth and liberty.
Last weekend, I was training an employee who was just promoted to a management position. I truly enjoy helping others learn their new role as a manager with my company. Anyone can feel the excitement and eagerness, and to be honest, I like basking in that feeling. It helps invigorate the blood of the older and grizzled veteran.
As we went through some of the training (which was filled with many tips and tricks to keeping time management concise), I was speaking with this employee about their expectations. It was at that moment, when she let me know that she was excited to get the new Ford Bronco. I am ten years her elder and I gave her a smile and I let her know that she was now falling for the biggest trap. We have all heard the saying that “you own the things you own and in turn they own you.” At that moment, I found it my duty to shake my head and asked her if she had saved for that new Bronco. She stated that now that she had this promotion that she should qualify for this Bronco. I asked her what size and style she wanted her new chains to be.
JL Collins, in The Simple Path to Wealth, says “Money can buy many things, but nothing more valuable than your freedom.”
The new manager sat down with me and I began to explain to her about becoming Financially Independent. F.I. has become a synomomous with the FIRE movement. I hold that one can be Financially Independent with out having to retire early. The true reason to become financially independent, or work our way towards FI, is to have agency. We should always try and keep ourselves in the position of power. That is why we should aim towards having F-U money.
So she asked me how do I make my way to having F-U money? I asked her to begin by being debt free and to not owe anything to anyone. Is that truly possible? Maybe. We all begin in a state of dependency. We grow out of that stage in many different ages. Some of us do not make it past this stage at all. That is truly sad. No amount of charity, nor the largest government will remedy this. Humans are social beings. We are political beings, as Aristotle would say. We live with each other. We live in cities. We rely on each other. So we all have to strive to provide a service to each other. So we work or produce to do so. There is value in this work. So we should not take the value of our work for granted. When we take on debt, we are telling the creditor that our valuable work and time are worth the sums that the creditor is willing to lend. So we actively work to pay off the debt. The creditor passively earns their income. It can be a beneficial relationship. It can also be a hinderance. It is all in our mindset. We must understand that when we take on debt, we are saying that we are willing to trade more work and time for immediate gratification.
I let the new manager know that she was making roughly $22k/year as a part timer. Now as a manger she would be making $50K more per year. That is $72K total! She was used to making her living, whether it was in scarcity, or in comfort. So why would she go and get herself into debt. If she saved for a year she could pay for the vehicle in a year. That really got her attention. However, she still claimed that she worked hard for it. I then clarified to her that she has yet to earn it and that she wanted immediate gratification.
I gave her another scenario. I explained that she could save $19,500 (Company Match is $5,000) in her 401K and invest in index funds for 10 years. By the time she was 40 years old (she is 30 now), she would be able to stop investing and by the time she was 55 years old, she would have close $1.6 Million in her retirement. If she did so she could increase her lifestyle to living off $50K per year. She would be on her way to financial independence.
Now do I think she will do this? I don’t really think so. Yet, I felt it was important to give her the quick lesson and advice. I really didn’t receive this. I had to learn it the hard way. I wasted many hours of my time paying off $98K of consumer debt the past 2 years. It was a hard road but I was able to make it. Now I am on the Simple path to Wealth. Everyday I get the solemn feeling of being freer than I did the previous day. I still enjoy a few comforts but, now I have assets that help provide the income to pay for these comforts. This is the reason why I chose to begin this newsletter or blog on Substack. I hope you enjoyed these words that come from experience. Thank you
In the meantime, tell your friends!