Above: An unsecured fiscal liability.
If you look at your regular monthly fixed expenses, cat ownership may be one of the biggest... and most unnecessary.
A cat provides a guaranteed 0% return on your investment, unless you have it trained to do certain tricks and you make money from its performances on the sidewalk or in a feline circus troupe (highly unlikely).
Let's take a look at the costs involved: a can of Fancy Feast, if you buy them in packs of 24, would cost you around $0.50 to $0.60 per meal. Assuming your feline is fed thrice per day, that is up to $1.80 every 24 hours, or $657.00 per year. This is before any veterinary bills, cat nip offerings, litter, and toys, which can add hundreds to its annual drain on your budget. Not to mention indirect losses in income due to you taking photos of your cat, posting them to Facebook, and having potential clients lose faith in you... and take their business elsewhere.
You need, therefore, to kill this financial freeloader off ASAP. A single shotgun blast to the head should disable its nervous system, preventing it from eating any more expensive Fancy Feast. Damn thing eats better than you do, anyway.
Wait a second. If you are thinking this is pretty insane, you are right.
Congrats on not being a sociopath penny pincher.
But this little post illuminates the serious problem I have with bullshit like the "latte factor" -- and I'm not alone, other bloggers such as Bad Money Advice have called this out as fake sage wisdom, too. Maybe I WANT a venti latte every morning, with a dash of Splenda. Maybe that gets me through the day. Through life.
Or maybe I WANT to splurge on a vacation every now and then, or get my work shirts dry cleaned as opposed to washing them in a creek by hand and singing Irish hymns to myself.
In other words, the key to personal finance success is not usually found in denying yourself the little pleasures. Keep your cat -- definitely don't kill it. Drink your lattes. Go on that vacation or get that chiropractor session or massage or acupuncture you've been dying to have done. Buy that new digital camera, as long as you'll use it.
If you want to become financially free, the key is to increase your income, diversify these sources of income (e.g. if you get laid off from work, your life won't grind to a halt because you have other investments working for you), live below your means and avoid high-interest debt like the plague.
It's simple. The latte factor, and the ascetic "deny yourself anything that costs money" school of thought is crap. Sure, you could become a millionaire (barely) in 42 years if you save all your latte money and invest it incredibly well in just the right index funds, selling and buying back in at the right times, like a little Wall Street maestro.
But who wants to wait 42 years? Boost your income today instead. And lessen your reliance on your job as a primary income source. As I read online somewhere, "Don't become married to your company, it's not married to you." They could drop you in a heartbeat to cut costs or appease investors.
Almost anyone can start making side income, within a matter of days, without resorting to scammy online nonsense or shady real estate schemes. We will be doing a 10 part blog series here over the next week with ideas for getting started, so stay tuned.
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