Simple Does Not Mean Easy
By Ric Edelman
The financial strategies in The Truth About Money are fairly simple to understand, but that doesn’t mean they're easy to do, and I know this from personal experience.
Back in 1982, before Jean and I launched our financial planning practice, we were in another business, and it was several years before we admitted failure, ending up about $6,000 in debt.
To solve that problem, we decided to kill the business (before it killed us) and start over, rebuilding from scratch. With no income and no assets, we moved out of our three-level, 3,000 sq. ft. townhouse and into a one-bedroom, 900 sq. ft. ground-floor apartment.
We placed an ad in the paper which read, "Moving family must sell everything," -- which we did, except for the kitchen table my best friend Andy built for me in high school, the bedroom suite that once belonged to my parents, and a sofa. We sold all our other furniture, the TV -- everything.
If you’ve never had a bunch of strangers walk through your home, offering you ten bucks for a desk that got you through college, or $15 for your stereo, you can’t imagine what this experience is like.
We accepted all offers and raised $2,000 that day, because I needed $600 for a security deposit on the new apartment, $200 to rent a truck to move our few remaining items, and to buy food and gas for the next few weeks while we got ourselves re-established. For three weeks, we spent $25 per week on food -- mostly fruit and vegetables. If you think it can’t be done, think again, for we proved it’s possible. People who are eating peanut butter to save money are fooling themselves: We discovered that processed foods are so expensive we couldn’t afford them. But you can eat well enough to survive on very little money.
The manager of a nearby retail store let us have some boxes he planned to throw away, and we used them to pack our clothes and dishes. I didn’t want to pay $30 a month for a self-storage place, and since we had no furniture anyway, we stacked the boxes in our new apartment, creating a mountain in the living room. But I told Jean not to worry. "It’ll only be for three or four months. We’ll be out of here by then," I said.
We ended up living there for four years. During that time we did not own a television, nor did we buy a newspaper, because I refused to spend 25 cents each day when I knew I could get a copy at the office after someone else finished reading theirs.
Entertainment was the library and public parks. Years later, when we eventually bought a TV, we discovered how smart we were to sell our old one. By not having a TV, we were not constantly bombarded with messages to buy, buy, buy. By avoiding television’s influence, we didn’t feel the need to spend money. Perhaps you can control the TV shows you watch, but you can’t control the commercials that air during them.
To rebuild income as fast as possible, Jean and I both had several jobs, working seven days a week, often leaving one job to arrive at another.
After living so frugally (made all the more difficult because life wasn’t always like that for us) one day we splurged on dinner, spending $7 at a nearby Roy Rogers. We knew we shouldn’t spend the money, that we’d regret it later, but we needed the release, and, boy, did those burgers taste good! That meal reminded us of the things we had given up and it increased our resolve to be able to return to a life that would allow us such luxuries. It was a year before we visited Roy’s again.
Despite the challenge, we knew we weren’t going to have to live that way forever, and for sure, we don’t live that way any more. By denying ourselves the little pleasures, setting goals, and focusing all our energy on achieving them, we paid off those debts and in four years had saved enough to buy a townhouse. We’ve since sold that and built a single family home, which we later sold to move into an even bigger one. Indeed, Jean and I are able to enjoy our lifestyle now because we were willing to sacrifice it all for a time, something most people will not do. We give each other a "knowing glance" whenever people comment on the success we’ve achieved. "You’re both so young," people tell us. "It’s amazing how successful you’ve both become in such a short time." If they only knew. You might say it took us years to become an overnight success.
You, too, can become an "overnight success." You will be on this Earth for 40, 60, or 80 more years. You can choose to live month-to-month as you have been living, or you can choose to live better. Give up your materialism for a few years, reduce your needs for now, and one day, you’ll be able to exceed your current lifestyle. All it takes is a little effort each day, and a lot of days.
There isn’t any magic to this, no get-rich-quick scheme. And while you may be afraid of how much time it will take to succeed, that’s nothing compared to how much time is really left in your life. So what if it takes you 10 years to get out of debt? You’ll still have 30 or 50 or 70 years to enjoy after that.
Take advantage of this information. I know you can do it. The mere fact that you’ve read this far tells me that you’ve got the interest. I’ve given you the direction, so all you need is the initiative! Find it within yourself and as W. Clement Stone, the great motivational trainer, said, Do It Now.