Getting ahead of the Power Curve
Most people don’t have any idea that their life could be so much easier, they have found a way to survive with their current level of spending and earnings and that’s good enough. They don’t know how money works, so they simply have money in from their job and money out from their spending and hope like heck that the money in will continue to flow and support the money out. These people have no idea that it could be any other way. Let me give you a mental picture of what I call the power curve.
Think of the power curve like a hill, most people live on the upslope, some live on the crest, and a few have made the journey all the way to the downslope on the other side. Of course you don’t just stand on this hill, you are pushing a big rock. It’s much harder work to do that on the uphill slope, than on the crest or the downhill side.
- The upslope represents debtors. Those people with little or no savings but with credit card, auto, and mortgage debt. Trying to save is hard because a chunk of their earnings go to pay the interest on stuff they bought last year or earlier. The bigger their debt the steeper the hill. If the debt gets too big the rock is going to crush them no matter what they do.
- The crest is those people who have paid off their debt. They no longer have to pay interest on past debts, they can live slightly below their means and still save money. It’s much easier for them to save as they have little or no interest payments.
- The downhill slope is those people who not only have little or no debt, but also have an investment portfolio or other passive income generated by their assets. Eventually their passive income will grow to the point where the rock will roll itself downhill and they can stop working and still maintain their standard of living.
Where are you on the power curve? If you are not somewhere on the downhill slope then you have work to do, the work will not be easy, you have to move your rock uphill. But trust me this first step in the hardest and once you reach the crest and dig yourself out of debt things get much easier because now you are on the good side of the power curve and don’t have to push your rock up hill.
I started pushing my rock about 18 years ago, and within a decade I was rolling down the good side of the hill, it takes a while to dig out of college debt. My passive income is growing every year and I continue to move down the good side of the power curve. Don’t wait for someday, get your financial house in order and start moving toward the crest of that hill, you will be glad you did.