The Career Consigliere

Episode 35: Turn Your Paycheck into Freedom

• America's White Collar Wise Guy • Episode 35

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The money we earn from our time at the office is what allows us to enjoy life.  But if we're not strategic with what we bring home, things can go off the rails. And when that happens, we wind up in shackles, completely dependent on our employer for our livelihood, and that's a rough place to be.

But, there's good news.  If we're smart with our paychecks, we can break the cycle and increase our financial independence so that we work because we want to, not because we're desperate.  Today's episode will give you some strategies and considerations to help influence the trajectory of your financial future, and, in turn, your whole career.  Enjoy!

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Whaddaya hear, whaddya say?  Welcome to episode 35 of the Career Consigliere podcast: your no frills, no BS forum for navigating the corporate job scene.  We’re back with you once again for what we hope to be a highly informative and engaging half an hour, or so!  Today, we’re going to address what is, in my opinion, the single most important reason why we work:  the paycheck we bring home.  The past few episodes talked about drawing very clear lines of demarcation between what you are, and what you are NOT willing to do for your organization.  And ultimately, it comes down to using the paycheck we bring home to fund other aspects of our life, and as the old cliché goes:  working to live, not living to work.  So today, we’ll talk about how we can strategically use our salaries to gradually become more and more financially independent as we advance throughout our careers.  Probably not the episode you were expecting:  get ready for some out-of-the-box ideas.  Podcast land:  let’s do it!

We’ve heard the old cliché many times:  work to live, don’t live to work.  And it makes perfect sense on the surface:  you think about all the things you’d like to do in life – hobbies you have, places you’d like to go, things you’d like to get involved in, anything at all that gets you fired up.  And quickly you realize that these things cost money:  some a little bit, some a lot, but anything that’s fun and exciting eventually makes you go into your pocket at some point.  So from that angle, it makes sense that we need something to fund the life we want to live:  a career – something that we can spend a healthy amount of time doing that gives us the financial means to do all the other things we WANT to do with our lives. 

But what winds up happening, in a lot of cases in the corporate world, is the complete opposite.  A lot of people wind up in a situation where the cost of maintaining their lives makes them a slave to the paycheck coming in, and this is a TREACHEROUS situation to be in.  And sure, you can easily point to inflation, interest rates, gasoline, or the cost of a gallon of milk, but if you want my honest opinion, it comes down to a fundamental flaw in mindset and planning.  I’ll tell you this:  personal finance is a HUGE aspect of my life.  I’ve always been a big saver and investor, and have just gone about my life in such a way to avoid having my back against the wall financially.  I had some good mentors around me from an early age, so I’m fortunate in that sense.  But from day one, my mindset was to use the money coming in, the money that I earned from working, as a tool to strategically fund other areas of my life and make sure I always had enough in my pocket to do so.

However, unfortunately, this is not the norm in the world.  I’m not going to cite any statistics or studies here:  there are entire YouTube channels, other podcasts, and articles all over the internet that are way more qualified to talk about the details than I am.  But I’ve seen and heard enough of them to know what’s going on, and a common theme that emerges from all the buzz is that the world around us normalizes excessively high consumption.   Turn on the TV, the radio, or just go out around the neighborhood, and what do you see and hear?  Companies trying to get you to buy cars at ridiculous interest rates.  Special sales enticing you to impulse buy horribly overpriced clothing and TVs that you don’t need.  Or worse, go on social media and get bombarded with ads that make you feel left out if you aren’t using the latest model phone, or aren’t flying to Portugal on a whim to take your third vacation of the year like all your friends seem to be doing. 

Let’s be clear:  I’m NOT on some crusade against enjoying your life:  we’re all on this earth for a limited time, the world has some great things to offer, and we’d be miserable if we didn’t seize the opportunity to go out and experience life.  But the issue here is that many of us go about it ass backwards:  we spend and spend and spend without the proper planning in place.  And to bring it full circle, we wind up becoming slaves to whatever job we do for a living.  And god forbid something happens to that job?  Dismissal, layoff, company goes under, whatever the case:  what happens then?  Not only do we lose the ability to keep a roof over our heads, but we’re also going to go through withdrawal on the recreational activities that are going to come to an abrupt end:  really setting ourselves up for a double whammy. 

So the best way you can rectify, or better yet:  prevent this from happening to begin with,  is to change your mindset on the money you have coming in.  When you really think about it, what did you envision growing up as a little kid?  You probably had fantasies of living in the kind of house you always wanted, driving the kind of car you always wanted, having a family, doing fun stuff, “the dream” as they say.  But was 9 year-old you thinking about what would be involved in getting to the point where you could actually have that kind of life?  Were you fantasizing about getting dealing with passive-aggressive comments, getting bombarded with emails all day,  walking the political tightrope, commuting in gridlock traffic, or getting called into your boss’s office to take heat for some miniscule thing that’s not really even your fault?  For those of us that wound up in the corporate world, that’s the reality of what we deal with:  going through these mundane and maddening realities is what affords us the house, the car, the nights out, the vacations, all the stuff we actually look forward to.  Quite a bit different than what we’d pictured when we were younger, wouldn’t you agree?  And guess what, people:  it’s not changing anytime soon.  Like they say in the Godfather:  this is the business we’ve chosen.  There are definitely worse ways to make money, but anybody listening to this show knows that the corporate life is NOT all glitz and glam.

So if this is what we have to do to keep ourselves going in the world, wouldn’t we be better off “beating the system” essentially?  Wouldn’t we want to gradually decrease our dependence on this kind of lifestyle as time goes on?  Ahh!  And that’s where the lightbulb goes on!  So how can we do this?   For the record, just as disclaimer, I’m not giving you any specific financial advice here:  I simply don’t have the credentials to do so.  I’m just here as a dude with some experience trying to point you in the right direction by telling you very generally about things that I’ve actually done myself, and that many people that I know have done that have helped all of us immensely.  So let’s get into it. 

It all starts with being proactive and strategic with the money we earn.  A lot of people do this backwards:  they spend first, and save second (if at all), which is a guaranteed to land you in shackles to some corporation until you’re 65, possibly even longer.  You spend everything you make, and you wind up putting yourself on this hamster wheel where you need more and more money to fuel the lifestyle that gets increasingly more expensive as inflation goes up, as the kids get older, and as life generally gets more complicated.  But if you could simply flip the order of operations here, save first and spend second, that alone is enough to completely change your trajectory and turn this whole dynamic on its head.  

Right off the bat, the far majority of corporate jobs offer you some kind of retirement savings plan, usually in the form of a 401-K with a company match.  I’m going to sound like every talking head you see on TV, but take full advantage of that!  Especially if you’re on the younger side, retirement might seem like some far off, incomprehensible time in your life.  But this is what’s going to get you out of the game someday, and if the company is willing to give you free money to help you get there, to essentially help FREE you from them, you’d be INSANE not to take it!   Online you can find investment calculators for free that you can use to stage out some financial scenarios.  You know you and your situation better than anyone else, so think about things like what age you’d like to retire, and how much money per year you think you’ll need to live comfortably.  Then, you work backwards:  play around with the numbers and figure out how much you’ll need to start contributing now to get you there. 

And don’t limit your saving just to what the company offers you.  Remember, any money that you save in a company 401-K is tied to that particular organization until you leave.  Part of decreasing your dependence on an employer is saving money on your OWN, completely separate from the company.   And there are MANY financial vehicles out there that you can use to do so.   Here’s where I recommend you get in touch with a good financial advisor.  Do some research and find someone that’s credible and trustworthy.  They’ll talk with you all about what your financial goals are, and they’ll recommend a whole bunch of different strategies to help get you where you want to be.  And when I say financial goals, it’s not just retirement: maybe you’re looking to buy a house, or save for your kids’ education – whatever it happens to be.  Doing this kind of planning and saving on your own is completely separate from your job, and won’t go away when you inevitably leave that company someday. 

Another good thing about saving money outside your company is that it forces you to be more proactive and be more strategic.  A lot of people rely on that payroll deduction they get from a 401-K plan as the sole vehicle to save money.  It’s a great tool, because it allocates the money into savings before you can ever get your hands on it to spend it:  essentially it keeps your money safe from you, and this is the kind of thing you want more of.  And while independent financial institutions that you work with can’t access your paycheck directly, you can at least set up automatic withdrawals from your bank account every month to funnel a specified amount into whatever accounts you have with them.  So the more you do this, the more it becomes habit.  It’s going to feel like paying a bill every month, but at least you can rest assured knowing that you’re paying yourself, not somebody else, and over time this is going to build you wealth and help you reach whatever goals you’re trying to get to.  And the best part?  Your job has NOTHING to do with it, other than the fact that they’re FUNDING it!  You’re simply using the money they give you to build your independence and gradually DECREASE your reliance on them.  

When it comes to saving, investing, or anything financial, there’s a big misconception out there that “oh, it’s only for rich people”, or “oh, it’s only for people who know about the stock market”, “oh, it’s only for the 1%”.   Not true at ALL!  It’s simply a matter of math: the more you save, the more money you’ll have.  Of course, if you put it all on one risky stock, then don’t be surprised when it’s gone one day:  that’s why I recommend getting with a good financial advisor who can set you up for the best probability of things working out in your favor.  But assuming you put the money in tried and true places, it’s not a matter of IF you’ll come out on top, it’s a matter of “by how much”.  And the earlier you start, your savings will grow EXPONENTIALLY!  In case you can’t hear it in my voice, this stuff really excites me.  So again, go out and find any free investment calculator on the internet, there are zillions of them.  Put in some numbers:  your age, how much you plan to invest per month, all the parameters it asks you for.  Run a whole bunch of different scenarios, and you’ll realize that the amount of money you’ll wind up with one day depends way more on YOU and how you manage it, than on who’s in office, what the economy does, or the direction things go in your company.      

That’s the happy positive part.  But, the downside is that getting there takes work.  You don’t have to lift anything heavy, go on some crazy diet, or wake up crazy early to run 5 miles every morning.  This is different:  it involves completely reengineering your saving and spending habits.  And I’ll admit:  I was able to get myself on a good trajectory as a single, unmarried dude that lived by himself.  I was given some good advice early on, so if anyone’s listening in their 20s, even as far as your early 30s, start doing this kind of stuff now before life gets complicated.  If you’re older, maybe you own a house, have a family, have some medical issues, whatever the case:  “life” will get in the way and make this transformation a lot more difficult.  You might already be at the point where the company you work for is your lifeline.  But the good news is that it’s never too late to make things right, or at least make them a little bit better.  

Again, I’m not going to tell you what to do or how to do it:  there are thousands upon thousands of personal finance books and programs out there that you can follow (some better than others, but there are many of them).  Read as many of them as you can!  But eventually you’ll notice that they all stay a lot of the same things:  I’m simply here to drive home the mindset that getting caught in the financial hamster wheel CAN be avoided, and CAN be corrected, and you CAN use the money you earn strategically to set yourself up for a much more comfortable and lower-stress life.   

Think about it:  we all deal with insane, ridiculous, asinine, dumb, (insert whatever colorful adjective you want), things at work.  We hate them, but we have to deal with them because that’s what the company pays us to do.  They stress us out, cause us grief in all kinds of ways, but we have no choice but to go full steam ahead.  When these things happen, wouldn’t you feel much better standing in a position where every paycheck gets you one step closer to autonomy, independence, and freedom?  Sure, do your job like you’re supposed to, but you can do it with a smirk while you say to yourself, “fine, you want me to do this stupid thing?  No problem – joke’s on you, because you have no idea how much the paycheck I get on Friday is ACTUALLY paying me.  They’re used to everyone in the place being broke and desperately reliant on them.  If you rise above that, and get the financial situation working in your favor, I PROMISE: the dumb stuff you deal with on the job will be way less stressful when the paycheck you get is no longer a matter of life or death.

So what should we take away from all this?  Let’s sum it all up with today’s……consigliere curtain call.  Newsflash:  life costs money – there’s simply no way around it.  And every one of us needs to do something to create value that gets exchanged for money:  our job.  But too many of us fall into a bad rut when we live our lives in a way that makes us excessively dependent on our employer to replenish our bank account every two weeks, and this is a dangerous way to live.  

Maybe some of you are absolutely in love with your corporate hustle, you worship your organization blindly, and you’ll jump over the moon if it means winning employee of the month.  And if you’re one of those people, then good for you – really.  To love a job that much is very rare, and there’s a lot that the world can learn from you.  Go start your own podcast and tell us how you do it.  But for everyone else, who are just using their $60, 70, 80 thousand dollar a year job as a means to stay alive, there’s good news:  the fix here is relatively simple.  Flip the spend first save second mindset on it’s head:  save first, spend second is what we want.  

There are many books, podcasts, YouTube channels, articles -  an infinite number of resources you can dive into for strategies on how to do this.  But at a high level I’ll tell you:  it’s going to involve a LOT of strategic planning, discipline, and long-term thinking.  If you’re younger and have time on your side, then you’re very well-positioned for this.  If you’re older and have more complexity in your life, it’ll be harder, but it’s still doable.  Take advantage of any savings plans your company offers ,and then get with a good financial advisor, talk through your current situation and where you want to be, and whoever that is will help you get there.

This isn’t just for rich people, or people who are professional stock brokers.  It’s behavior modification combined with simple math – that’s it.  Break the bad habits, be smart and strategic with the paychecks you earn, and as time goes on you’ll be less and less reliant on the company you work for.  Your mental health will improve, and you’ll have more in your pocket to do the things that get you fired up.

Sadly folks, that’s all the time we have for today.  But have no fears, and shed no tears, because I’ll be back with a new episode very soon.  As they say in the industry:  no listeners, no show, so do me a favor, and stay loyal!  If you find value in my content, please leave me a nice review, tell all your friends, and don’t forget to like, subscribe, and follow on whatever platform you use to get your podcasts.   Beyond the confines of your headphones, speakers, TV screen, or any other crazy contraption with the ability to stream audio, I also provide one-on-one career assistance, so visit my website at career-consigliere.net to learn more about me, book me for a private consult, join my email list, or explore some of the other career services I offer.  And to all of you out there in podcast land, remember this:  Who’s the boss in your career?  You, nobody else.