Most career events in my life had some sort of financial consequence which either left me feeling financially secure or fragile. I’ve been thinking back to those moments and wanted to sum up what factors give me that marshmallowy feeling.
Feeling financially secure depends on what wealth and stability means to you. To me it’s having a steady income, followed by a healthy net worth. For someone else it might be a massive bank account or owning multiple businesses.
When I feel financially secure then I’m more likely to take healthy risk. I’m also less likely to be timid when it comes to making career or job changes. This is good, it prevents me from feeling stuck in a shitty situation.
I look at my very wealthy friends and they don’t really have money fears. They have a weird subtle greed for displays of wealth but no financial insecurities.
When I feel financially secure I’m also more likely to help others. I worry less about my own well-being and am able to do positive things for those around me.
Feeling Financially Secure
I want to list all of the factors which help me feel financially secure. I’ll go in descending order. I think it’s helpful making such a list because you can focus your energy on the things which are more important to you.
1. Steady Income
In my case, my spending is low enough that as long as I have a steady income I feel financially secure. If I can earn some money every month, in the neighborhood of $3,000, I’m not too worried.
If I was living a more traditional US lifestyle, I’d feel quire secure with $5,000/mo of income. And since that’s the median US household income, that should be quite easy to achieve.
2. Multiple Income Streams
I like having income from multiple sources. But the downside is that it’s hard to focus on each source enough to make it reliable. For example, I might have income from my main job, a per diem gig, and some real estate.
Or I might be making money from a peer-to-peer lending service. Maybe I am doing some healthcare consulting on the side or selling services or products which are unrelated to my main work.
3. Control Over my Spending
I’m just referring to budgeting here. If my household spending is low and I have few financial obligations then I stress less over life events.
Even if I have to get into debt, knowing that I know how to budget gives me the confidence that I can pay back my debt quickly.
4. Investment Accounts
When you have money invested, every guru wants to convince you that you investments will go to zero. That there is some impending global financial collapse – which has been predicted since 2012.
Still, having money invested in an investment account helps me feel financially secure because I have extra income and I am growing my net worth. Not only that, I’m learning how to invest which is a skill which helps me feel like I have some control over my financial situation.
5. Real Estate
I’m still trying to figure out my fetish with real estate. Either I’m becoming a real estate mogul with my 2 condos or I’m just addicted to real estate ownership like a chump.
Regardless, knowing that I can rent out my place even for some pocket change is a good feeling. I feel one step further removed from financial catastrophe.
I’ve had good luck relying on good family and friends for help. I think this is very important because unless you are disgustingly wealthy and diversified, you won’t get this feeling of security otherwise.
It only falls into the 6th category because I wouldn’t want to rely on others unless I had to. I’m hoping that I can get to a place where others can rely on me.
7. My Own Business
What I like about owning my own business is that I would have fewer people meddling in my life. I’ve realized that I’m a bit of a troublemaker, so being able to do things on my own terms gives me an extra level of security.
Having my own business means that I would have an income stream and also an asset which I could potentially sell. I suppose a real estate portfolio might be considered a business.
8. Access to Cash and Line of Credit
Having access to cash is good but I worry too much about inflation to want to park my money in a bank account for too long. Even if it was a CD.
Having a credit card with a $25k limit is plenty for me. For someone else it might be having access to a HELOC so that they have access to a line of credit in order to feel more financially stable.