“The time to save is now. When a dog gets a bone, he doesn’t go out and make a down payment on a bigger bone. He buries the one he’s got.” Will Rogers
This article is three years too late, but I’ll write it anyway.
Over-extending your finances hurts your freelance career. It could put an end to it, if you were one of the masses that bought too much home on too little income. If you were wise with your money, you are free to take more risks.
Risks like a new business venture, writing a book, starting a huge project that will reap big rewards further down the line. This the gold, the good stuff, that will propel you into greatness. But you can’t do it if you have to worry about how to get your next meal.
The economy is hurting. I drive down the streets of my little town of San Clemente, California and every day there’s a new store that’s shut down. “OUT OF BUSINESS” signs are everywhere. Just last week I was in Cocoa Beach, Florida and was saddened by the number of empty storefronts. In one area, an entire three-blocks was taken up by empty buildings, all with “Lease” signs on the doors. It’s going to be years before those spaces are rented again.
And I thank God and myself that I never lived beyond my means or tapped into home equity to buy useless things like nice cars, clothes and big-screen TV. sets, because I’d possibly be out of business too.
For some people, this is the best time ever to start a new business. Consignment shops are thriving, since people want to spend less on clothes. Bob, the guy who repairs my car, said that he’s been busier than ever and has hired new employees, since more people are opting to get their cars fixed rather than buy a new one.
Even artists and writers are benefiting from large companies laying off in-house designers and copyrighters and instead, opting to use freelancers. This is the bright side.
But the reality is that people are spending less. And that means they are buying less from ME! In 2008, my gross sales just from the online store of DrewBrophy.com brought in $10,000 – $15,000 per month. Now it’s $3,000 – $4,000.
Luckily, I’m not going to lose my home or anything else. I can weather the storm, because of my personal hatred for owing money. My obsession with not taking out loans has served me well. I haven’t tapped into my home equity and so my mortgage is cheaper than it would cost to rent an apartment. My car has been paid off for 6 years. I don’t use cable or watch t.v.
If I ever “blow” money, it’s on good wine, fine dining and travels. You won’t see me carrying a Gucci bag or whatever the latest designer thing is. (But give me a cheap bottle of wine, and you’ll hear some complaining!)
Over-extended people cannot take risks. They can’t afford to. And it’s the risk-taking that leads you to the gold.
Your amount of financial rewards equals the amount of risk you take. Take a big risk – reap a big payout. Take a small risk – get a small payout.
It’s hard to take risks when you are barely surviving. For all those people who bought huge houses and got big loans for things they really didn’t need, I feel sorry. They may have been misled by all the others who were doing it. They were excited at the amount of wealth that seemed to be right at their fingertips. They were following the status quo, which said “get all you can right now!”
But the bottom has dropped out. I’ve watched friends as they’ve lost the home, the car, the job, the wife. And their freelance business is suffering – they are taking any job, without discretion, even selling out, to just survive.
I might not have seen this coming three years ago, but I had an instinct not to overspend. I have the luxury of continuing to take risks that will reap rewards. I have that freedom, because I’ve kept my expenses low.
There are great things up ahead. The economy is slowly improving. But I urge all of you this time around, don’t over-extend yourself. It doesn’t matter if you have a nice car or a big house. THE HAPPY is the real stuff in life.
Focus on your art, your family and your projects. Allow yourself the freedom to make a few mistakes and continue to take risks. That’s where the rewards are.
Maria xxoo
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