Slave Pays $1,517,433 for Freedom in 2007

Did you think slavery was over?Wage Slave.jpg

It’s not… not even in the United States.

True, the 13th Amendment officially abolished slavery in 1865 (although Mississippi neglected to ratify until 1995). It ended slavery in one of its most brutal, inhumane forms: chattel slavery, in which people are treated as nothing more than property.

Yet at least one type of slavery continues to exist, even thrive. In fact, almost every person in the world has been subjected to it, including you.

What kind of slavery am I talking about?

Wage Slavery

Wikipedia defines slavery as, “a socioeconomic system under which certain persons — known as slaves — are deprived of personal freedom and compelled to perform labour or services.”

Without a doubt, this describes the form of slavery abolished in 1965, but I also believe it does a fair job of describing the majority of our workforce. Does your job “deprive you of personal freedom?” Do you ever feel “compelled to perform labour?”

Almost certainly.

If you’ve ever wanted to sleep in one morning but forced yourself to get up and go to work, you are well aware that you have lost a measure of “freedom.” In fact, you were probably “compelled” to go because you knew that failure to show up would cause you to lose your job.

What we’re talking about here is not a difference in definition. It’s merely a difference in degree.

I’m Not a Slave!

Some people would argue that it isn’t the same, that you have a personal choice about whether to continue working or not. To a certain extent, they’re right — you aren’t going to be flogged if you threaten to stop answering the telephone at work.

But you can be fired. Once again, you could argue that this isn’t so bad, that you can go out and get another job, and once again, it’s partially true — some people, such as surgeons, are in such demand that they can easily find another job, barring any serious misconduct.

The majority of the world, however, isn’t so lucky. To the mother with six children, minimal education, and a network consisting primarily of family members, the prospect of getting fired is nearly synonymous with starvation, or at least a drastic reduction in quality of life.

Even for people in better situations, getting fired still carries negative repercussions. You might be ridiculed by your family, forced to sell personal property, or experience a general feeling of worthlessness. One way or another, society finds a way to punish you. It’s a matter of necessity.

The Economic Necessity of Wage Slavery

If there were no consequences whatsoever from quitting your job, would you continue to work there? Imagine that society just started taking care of you, no one in your family minded, and you lived in a state of total abundance for the rest of your life. Would you go back to the same job?

Probably not.

Of course, without significant technological advances, this isn’t likely to happen anytime in the future. If people started quitting their jobs by the millions, the rest of the world wouldn’t be able to support them. Economies would crumble, people would starve to death, and everyone would have to go back to work.

Thinking about it that way, the world actually has a reason, or even a necessity, to punish you for failing to work. If they don’t, you and others like you could bring about the collapse of mankind.

We can’t let that happen, now can we?

The Only Way out

There is a way out of the system, of course. In fact, millions of people do it every year, especially in the United States and Europe. It’s a process, and you might say we work toward it for our entire lives.

What am I talking about? Retirement — the contemporary equivalent to buying your freedom.

In many cultures throughout the world, slaves could work to buy their freedom. Usually, it was almost impossibly difficult, requiring the slave to take an additional job or find other ways of creating exceptional value for their masters. But it happened.

Retirement works the same way. It’s a way of rewarding dutiful workers for carrying their fair share in society.

What happens if you’re a steadfast, dutiful employee, serving the same company for 20 or 30 years and making them a bundle of money while you’re there? You’re rewarded with a pension, or maybe 401(k) contributions.

What happens if you’re a steadfast, dutiful taxpayer, reliably paying your portion of taxes for 20 or 30 years and supporting all of the government services that we use? You’re rewarded with Social Security.

What happens if you’re a steadfast, dutiful investor, setting aside a percentage of your income and investing it into securities? You’re rewarded with residual income.

You get the idea.

[On a sidenote, the reason advisers put so much emphasis on saving and investing is it’s the only source of financial freedom in this list that you have significant influence over.]

Regardless of how long it takes you, when you’ve given enough, society releases you to do what you want. The level of your contribution also determines the degree of your freedom. For instance, Jack Welsh probably has better retirement benefits than General Electric janitors.

It’s not fair, necessarily, but it’s how it works.

Why We Talk about Personal Finance

Others will probably argue about this, but I believe the entire personal finance industry is centered on this paradigm. It’s basically a class teaching you how to buy your freedom from wage slavery.

We spend our entire lives doing what other people tell us. When you’re a child, your parents tell you what to do. When you’re a teenager, your teachers tell you what to do. When you’re an adult, your employer tells you what to do.

It’s only in your retirement that you get to tell yourself what to do. Sooner or later, you figure out that this is where life really happens, so you begin to ask questions like:

  • What can I do to get there faster?
  • What can I do to build a better retirement?
  • Once I achieve retirement, how can I maintain it?

The entire personal finance industry exists to answer these questions. We teach you how to buy your freedom. Of course, not all advice is created equal.

The reason I started this blog is because I think there’s a frightening misconception in the personal finance community right now: that you can’t be free until you’re relatively old.

And that’s just silly.

The Cost of Retirement

If you had to put a price tag on retirement, what would it read?

You might think it says, “30 years of dutiful service to your employer, saving a portion of your income, and investing it for slow but steady growth.” Because that’s what the personal finance community teaches.

Except, the cost of retirement is measured in dollars, not years. You can buy your freedom at any time during the course of wage slavery, provided you have enough money to pay for it.

How much money does it cost, exactly?

The experts are divided on this one. Some say you can live comfortably on $500,000. Others say you need more than a million. Personally, I picked $1,517,433 because it sounded convincing.

The reality is you have to find your own figure. Decide what kind of life you want to live and then figure out how much it’s going to cost. Unlike slavery, you get to decide the price, not wait for your masters to tell you. To me, that’s very, very cool.

The Purpose of This Blog is not just about making money.

It’s about making enough money to buy your freedom. It’s about doing it faster, so you can do what you want before you’re old and gray. And it’s about having fun in the process.

I know you can do it, not only because it’s theoretically possible, but because I’ve done it myself. I’m 25 years old and retired, at least for awhile.

One reason I can spend so much time working on this blog is I can do whatever I want to do. For now, that’s passing on what I’ve learned to people like you.

Believe me, the best is still to come. We have several posts left in this series and lots more after that. If you don’t want to miss it, subscribe here.

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