The book How to Survive without a Salary is a refreshing look at the rat race. The focus is on living a “conserver” lifestyle rather than competing for more and more income. The truth is that you can live a nice lifestyle in middle-class style on MUCH less money than you think. In fact, the government-created ‘poverty line’ is actually more than enough IF you practice a debt-free, smart approach to living.
One simplified example is spelled out in the book:
“Consider the simple example of a $1,000 purchase: a holiday, a little furniture, or a replacement for the worn-out refrigerator. Nothing unusual or extravagant, but its more than the paycheck will cover. So put it on the credit card, right? And don’t forget the sales tax of, say, seven percent, or whatever it is where you live. If you pay it off in a year, at a credit card interest rate of 15 percent, that new fridge will end up costing you $1,230. Now, if you are in the 25 percent tax bracket, you will have to earn $1,640 in order to buy that $1,000 item.
Meanwhile, the cost-conscious conservers found a qualuity used fridge or a “no-name” holiday resort for half the price the Joneses paid. They paid cash (which is one of the reasons they got a better deal,) and to be fair, we’ll add the foregone interest they might have earned by charging the item and leaving their cash in a three percent interest account. So the fridge, or whatever, will cost the conservers $500 plus $35 sales tax, plus $15 in lost interest, for a total of $550. If they are in the same 25 percent tax bracket as the Joneses, they will have to earn $733 in order to buy that $500 item… while the Joneses had to earn $1,640 in order to buy the $1,000 model. A difference in earnings required of $907! So in this case, $500 saved is the equivalent of $907 earned!”
Sure, that is a simplified example, but the point is blindingly obvious when you look at start to add up the numbers.
The book goes on to describe how, with some good planning, you can walk away from the 9to5, the traffic, the idiot boss and all that hassle. Don’t mistake this for some feel-good, utopian, down-with-society book – it explains that you will still have to work – you will still have headaches – you will still feel the occasional financial crunch… but you just might do it with a lot less day-to-day stress.
Being self-employed, I walked away from a salary a dozen years ago and wouldn’t think of going back. Give it a read and open yourself up to the possibilities.