Logic vs emotions - Posted by Jim Beavens
Posted by Jim Beavens on April 22, 1999 at 17:23:17:
Hi Millie,
You said:
“Do not stop contributing to the 401K unless you need the money to pay off bills and improve your credit.”
Bingo.
I can use my current contributions to pay down my excessive consumer debt much faster. I’ve always tried to do both, so I’ll always have some tucked away, but I think it’s time I focused squarely on my debt if I’m going to strike out on my own in the near future. Besides, my contributions have been dwarfed by the profit-sharing contributions my employer makes (12.5% of my pay every year regardless of what I contribute, which is 60% vested so far, and should fully vest in a couple more years).
As far as tax-deferred savings go, Kiyosaki really opened my eyes at the convention when he pointed out how most traditional retirement plans are based on the assumption that we will retire poor. We put money in tax-deferred accounts because we assume that we will be in a lower tax bracket when we retire, which implies a lower income than we currently enjoy. That’s not my plan at all (obviously the Roth IRA changes this…I’ll have to look into which type of IRA I’ll roll my 401(k) over into when the time comes).
I understand how tax-deferred savings can grow much faster than after-tax, and if one doesn’t need the money now then putting it in a tax-deferred account is probably preferable to a taxable account. But since I have a ton of debt, I figure I can put that money to better use now.
As for lightening up and being happy, well what you say (and what you said down below) sounds very logical and makes a lot of sense to the calculating engineer within me. But my emotions keep complicating things. I really do wish I could change my attitude toward my job with a snap of my fingers. But that is far easier said than done. It’s a little late to avoid resenting my job. =)
You mentioned down below to keep my job and REI seperate, and to work on REI only during nights and weekends. Unfortunately I’ve already done most of what I could do during the weekends (studying all the courses and books I got), and some of things I need to do now involve consulting with a lawyer, calling real estate agents, incorporating, and other things that require actions during normal working hours. This is all complicated by the fact that I work in a cubicle right next to my boss, who can hear every phone call I make. And as I inferred in my original post, my brain just can’t seem to handle rapidly switching between two completely different tasks. If I’m deeply involved in solving a tricky circuit problem, then I have to shut out everything else or I won’t get anywhere. Likewise, if I do allow my mind to wander to thoughts of real estate (like coming to this board, which I do far too often during the day), then I have a hard time immersing myself once again in all the minutia of my job, none of which I really have any interest in. So all I’m left with is a half-hearted attempt at both, and a bunch of excuses (“I could do so much better at REI if I didn’t have my job”, or “I could do so much better at my job if I wasn’t so distracted by REI”). As you said, it just ends up tearing me apart.
As with everybody else’s comments, I’ll think about what you’ve said. But if I wait until I have all my consumer debt paid off and have 12 months cash reserves on hand, I’ll be working for several more years. Two years ago, I bought the Carleton Sheets course and found this website. I lurked for a while, but didn’t buy any other courses, and eventually decided that I needed to continue working in my career. Now two years later I look at where I am, and I’m disgusted. I don’t want another two years to pass and look back at this point in time and wonder how successful I could have been by now. After the convention and buying all the courses that I did, I’m certain I have all the theoretical knowledge to be successful in this business. Obviously, I’m lacking the practical knowledge (as an engineer, I know the real world never works like the theory says it should), and so the question becomes whether I can learn and apply that practical knowledge enough so that it covers my current living expenses, and do this fast enough before my cash reserves are depleted. I honestly don’t know the answer to this question, but I’m as close to finding out as I’ve ever been. For the time being I’m not going anywhere; I’ve made a commitment to think about this for a few weeks and make sure I stay as committed as I am now. I’ll keep you posted.