- "It is not the man who has too little
but the man who craves more, that is poor."
A lot of people are caught in the financial trap of life,
often referred to as the rat race.
This is where you are in the endless pursuit
of chasing something, whether that be money,
success, a promotion, something like that.
The problem with this rat race is that you often
end up financially trapped, and out of control.
You have to work 40 hours or more per week
in order to afford that fancy car
to bring you to and from work.
Not to mention, you have to pay the mortgage
on your big house, which you spend most
of your time outside of.
And on the weekends you have just enough time
to go grocery shopping, do your laundry,
and get caught up from the last week,
before repeating the entire cycle over again.
Then, two weeks out of the year,
you have your vacation time
where you're able to take a break from it all.
So my question for you is how long
have you been stuck in the rat race?
And more importantly, how much longer do you want to stay?
So I officially entered the rat race
when I was 20 years old.
I got a job working for my local power utility
where I earned a salary of around $60,000 per year.
Now, while that was good money,
the other aspects of this job were not that great.
For one thing I only had
two weeks of vacation time per year.
And for another thing, I had a really long commute
which took up a big part of my day.
So I would wake up at 6:30 in the morning,
I had a 45 minute drive to work,
get there around 7:30, work until four, drive home.
I would go to the gym after work, make dinner,
And by the time I was all done with that
I had about one hour per day to myself
where I could actually do what I wanted to do.
And I was determined to find a way
to reclaim my freedom, and get my time back.
And so after doing this week in and week out for two years,
I knew this just wasn't for me,
and I knew I had to get out.
So I officially left the rat race,
I did what most logical people would do
and I quit my job to make money on the internet.
Now I definitely took a big risk by doing that guys,
and I'm not recommending that as a strategy.
And in fact, you don't even actually have to quit your job
in order to escape the rat race.
And I'm going to explain how that's possible
in a little bit here.
But for me, my way of leaving the rat race
was leaving that job behind and figuring out
other ways to make money that made more sense for me.
So if you're looking to escape
that hamster wheel life that I had,
here are five different things
I would recommend that I followed myself.
All right, so the very first thing you have to do
if you want to escape the rat race,
and the most important thing, is to minimize your expenses.
So I like to explain it this way.
In life you can either have a lot of things,
or you can do a lot of things.
Because when you take on
a lot of material possessions in life,
you have to pay attention to two things.
Number one, how much that's costing you money wise.
And number two, how much that is costing you time wise.
Because if you want to have more freedom in life,
you can't spend all of your money,
or all of your time on things rather than experiences.
So most people out there would get more fulfillment
from taking a week long road trip,
like I'm doing currently,
rather than buying a brand new flat screen TV
or driving a brand new car.
And so if you are one of these people,
you have to prioritize experiences
rather than buying things.
So for example let's say you go out there
and you buy a swimming pool
because your neighbor bought a swimming pool,
and you're stuck in that
keeping up with the Joneses mentality.
Well, that's gonna cost you
tens of thousands of dollars,
but it's also gonna cost you your time.
Because now you have to maintain that swimming pool,
you have to put chlorine in it, you have to skim it.
So not only is that pool a money pit,
it's also a time vampire taking away
both your time and your money.
So when I knew I wanted to escape the rat race
I kept my expenses as low as possible.
I drove a 15 year old beat up SUV
with over 200,000 miles on it, with no air conditioning.
And a lot of people thought I was crazy,
but I didn't wanna take on the high expense
of a monthly car payment.
So if you are looking to escape the rat race,
your very first step is to get rid of things
that no longer serve you,
particularly those things
that are costing you money every single month.
And second of all, you need to stop buying new things,
especially if you're doing it from the mindset
of trying to impress other people,
or keep up with friends and family.
I would recommend doing things like I did.
Drive an older car that you maintain for longer.
Maybe you don't need those brand new countertops
in your house, and maybe you wear last season's clothing,
but you understand this gives you more freedom
in life by not wasting all of your money.
(calm music)
All right, so the second step for escaping the rat race
is to minimize your biggest expense out there,
which for most people is going to be your housing.
So most people out there have a mortgage
on a single family home, or they are just renting.
And this costs them usually anywhere from
$1,000 to $2,000 per month.
Now, if you want to eliminate this,
you could go live in your car,
or live in a camper in the woods,
but that's not really my style.
So what I've done, and what I recommend doing
is something called house hacking.
So rather than going out there
and buying a single family house, or just renting,
you actually buy a two to four unit property
and you rent out the other units to offset your mortgage.
I actually own a four unit property
where I live in the main unit,
and I rent out the other three.
Now my mortgage on that property is around $2,400,
but my rental income adds up to around $2,100.
So at the end of the day, I'm only paying $300 per month
of that mortgage, effectively minimizing the largest expense
that most people have.
And not to mention beyond just saving money
as far as how much you're paying for your housing,
there's also an array of tax benefits associated
with being a real estate investor.
So if you go out there and buy a single family property
you're going to be house poor,
you're gonna be spending thousands
of dollars on this mortgage.
However, if you go out there and you buy
a piece of real estate, a two to four unit property,
you have the income potential from the other units,
plus all of the tax benefits of real estate investing.
So when you're able to minimize your other expenses in life,
and then add house hacking on top of it,
well, all of a sudden you have thousands of dollars
of extra money per month
that you could direct towards travel,
or just saving up and looking to retire early
to escape the rat race.
All right, so the third step for escaping the rat race
is figuring out how to earn location independent income.
Because even if you have super low monthly expenses,
if you still have to go to a job five days a week
and work in an office, well you're not really free
at that point because you still have to go
to this location to actually earn money.
Now one good thing about this whole global pandemic
that's going on right now is it has shifted
the work environment from having most people working
in offices to having more remote workers than ever.
Because if you're not stuck working at a given location,
you can pretty much do your work from anywhere in the world.
For example, let's say you work in construction.
Well, you can't exactly be in Spain
while working on a construction project
because you physically have to be there working.
So your goal here is to figure out a way
that you can make money without being stuck
in one location at a time.
So if your job allows you to do this,
you already have this checked off.
And if it doesn't, it might be time to find a different job
that can allow you to work remotely,
or find other ways of making money
outside of actively working in a job,
which we're gonna talk about more in a little bit.
So the fourth step for escaping the rat race
is figuring how to achieve time freedom.
And that is where you don't have to go to work
for set hours during the day.
Because what I have found
having basically set my own schedule
for the last three years is there's times
when I'm super productive and I may wanna work
10 or 12 hours at a time,
and there's other times when I'm not productive at all.
And even if I sat down working for numerous hours,
I would pretty much get nothing of value done.
There are people out there who are morning people,
there's night owls, and it really doesn't make sense
for everyone out there to work
a set schedule during the day.
Now it is difficult to get your employer on board
with this flexible schedule,
but again with people working remotely
more than ever nowadays, there's more people
that are working this flexible type schedule,
where rather than working like a nine to five,
you simply work when it fits your schedule best,
and you may find that you're also more productive.
Now, if you follow the first four steps we covered here
and you minimize your expenses, and you house hack,
and you find a job,
or a way to make money that is location independent,
and then you also have your time freedom.
At this point, you have basically escaped the rat race.
But there's a way to take this even a step further,
And that is the fifth part of this equation
to where you no longer even need to really work
as a means of deriving income.
And that is the fifth step, which is making passive income.
For most people, especially when you go
through the traditional schooling system,
you're raised in this mindset that in order to make money
you need to have a job.
And jobs typically have you working a set number of days
at a given location for this number of hours per day.
But if you're able to escape the rat race
following those steps I covered earlier,
and then if you have minimized your expenses
to where you have surplus income that you can then invest,
it's possible to replace that active income
with passive income.
Or essentially earning money based on the assets
that you already have rather than going out there
and getting a job.
And so this is something I have done myself
over the last couple of years
of running my own online businesses.
While I have spent some money on cool experiences,
and things that I've wanted,
I've taken the majority of my money
and I've set it aside into passive investments
like the stock market, or real estate,
and different things like that.
And I'm now at the point where I earn
many thousands of dollars per month passively
from the assets that I already have.
And I'm in no way telling you this to brag
or anything like that, but I'm simply telling you
this is the next step to that equation
of getting out of that nine to five lifestyle,
is essentially not having to work
for your income in the first place.
And I'm certainly not advocating for sitting around
and being lazy, and doing nothing.
I still do a lot of stuff with my time,
and I still work quite a bit,
but it does allow you to have experiences like this,
and to get to do things on your own timeline
rather than following your boss's timeline.
Now, I will say this.
For those of you that follow me on social media,
you probably know that I have a nice watch
and a nice car, and different things like that.
And you might be saying to yourself,
well, why am I not driving a 15 year old car,
and spending as little as possible?
That way I can escape the rat race.
And what I wanna say to that is I have done this previously.
I spent many years living well below my means,
even when I had a job that paid me $60,000 per year,
I drove a 1999 Honda CRV in order to follow these steps
that allowed me to get out of the rat race.
And so there's nothing wrong with wanting these things.
If you want a newer car, or if you wanna spend
a lot of money at restaurants, that's really fine.
But what I challenge you to do instead
is wait until your passive income,
the money you're not actively working for,
is able to pay for these luxuries
rather than using your active income
which should be essentially setting you free.
So anyways guys, those are the steps I followed
in order to escape the rat race.
I hope you enjoyed this video.
It's kind of a different style but honestly,
I've been doing YouTube for four years coming up in October,
and it can get very monotonous.
So this is totally different than my usual style,
but it's been a lot more fun making this video.
I would expect to have a lot more
like this coming in the future,
so if you enjoyed this guys, please drop a like,
make sure you subscribe,
and hit that bell for notifications.
And I hope to see you in the next video.
(calm music)