After I paid off my house a few years ago, I wrote about the experience (via the post: Stop Drowning in Debt, Start Swimming To Shore) using a swimming analogy. In the swimming analogy, I compared “being in debt” as being similar to being underwater and swimming straight up to get desperately needed air.
In the under water analogy, there were no complex choices, you had to swim straight up on the quickest and shortest path to get the prized air. Instinct practically took over so there was no thinking, just a constant and quick paddling to get to the surface. Much like debt, it makes the decision very easy because every movement up was a direct contribution to your end goal which was to breathe or reduce your debt.
Once surfacing (or getting out of debt):
- at first you catch your breath,
- rest a bit,
- then start looking where to go from there!
In a later post called (Getting Wealthy By Swimming to Shore), I wrote that I plotted a basic course to follow and that I started implementing my loose plan.
I’ve discovered that following that plan is hard because of so many other options that are out there once you get out of debt. I’m constantly wondering about the direction that I should be swimming and if current path is the best… I miss the days when every payment on debt was instant feedback on how my financial position has improved. The wealth producing opportunities are not anywhere near as predictable making debt payments.
The feedback can be false depending on how you act on your investments. For instance, 3 years ago I would have never guessed that gold would be as high as it is today. In a unsure economic climate and the increased consumption from developing markets on a scarce resource, it makes sense that gold would rise as it has but it’s hard to see this sometimes because of all the variables involve. To bad I didn’t buy any back then!
Interestingly (and not really related to the point of my article), I recently saw on TV that we can make gold out of lead. The process requires massive amounts of energy that make it too expensive, but it is possible.
Achieving financial independence and my swimming analogy:
So I’ve plotted a course to follow that I will try to achieve financial independence, but it’s a tough course and I’m constantly making small adjustments. I think as long as I don’t swim in circles or suddenly decide to swim the opposite way, I’ll be okay. I have learned that my journey won’t be a straight path as it was with getting out of debt.
There will be times when I go backwards because of the currents or I’ll have to swim around obstacles (like stinging jellyfish). I think the important point is to keep swimming, because after you stop swimming for too long, eventually you sink.
So in conclusion, it looks like I’m in for a long, hard swim until I develop a pace to swim/invest by…
MR
Glad to hear you have made it out of debt, but now you are ‘in the green’ it can be difficult to make decisions on what to do nect, especially if you have been in debt for a while. Taking it back to your swimming analogy it van be hard to stay afloat and even after you rise to the surface you need to follow your get out of debt rules for a while, at least until you reach the shore. This will prevent you from drowning again.
Yeah, once I reach shore, I consider myself to be financially independent. I wish I could make that happen instantly 🙂
Great analogy. Even though it may be more difficult, you are in a better situation. It is hard to go wrong by saving something each and every month provided you are dollar cost averaging into some investment.
Thanks 🙂
True, the bulk of my savings is in my 401K plan, which naturally dollar cost averages my investment strategy.
Good luck “swimming” towards your goal. I love the analogy. It works well. It is a great one. I actually just wrote (to be published in a couple weeks) a post on the best first investment. I am finding that everyone is left wondering… “what should i do?” I think the recession has forced people to realize the importance of financial planning and now the question is what the best course…
I don’t remember what my first investment other than savings was since my uncle started buying me shares of stock when I was 5 or 6.
I too love this analogy. I used to swim and now that you mention it, debt can be like coming up for air.
I want to wish you luck with your goal. I know you will reach it with perseverance. Remember, just like swimming, the more you do it the better you get at it. It is the same with your investment plan. The more effort you put into it the better the reward.
Great point! Practice makes perfect and this hold true with investing also!
Thanks 🙂
Great analogy with swimming/debt. Unfortunately, many people don’t even know when they’re drowning in debt these days. They say “Oh, it’s not THAT much debt.” Well, in my opinion, any debt is TOO much debt. It’s up to each one of us to make our own financial plan or have a financial manager make one for us. We will never reach our personal goals with debt looming over our heads.
I don’t hate debt, but I can see where is a sudden emergency hits, you can fall into a deep, deep pool of debt water if you aren’t careful…
So yes, for the average person no debt is the best debt.
Don’t look out at what would have been if you invested in this or that. Focus on saving and developing a diversified portfolio, and you will win in the end.
good point, and a risk aware, balanced portfolio at that!
You have done so well with achieving the first goal. That’s laudable, and only 30% of homeowners have tasted what you have accomplished at a relatively young age. You rock! Surely, you will reach financial independence.
Thanks, I hope so, I think after I get a few hundred thousand in my regular account, I’ll feel better!
It’s a great analogy…being in the middle of the ocean and you can swim in all different directions and meet a variety of hazards and storms along the way.
What I find tough is when there are not distinct landmarks along the way (or milestones to your savings goal) which makes it seem like you’re swimming aimlessly with no goal in sight.
I plan on making some milestones for myself so that I have something to swim towards that is within sight and achievable.
I highly recommend reading South by Shackleton. It’s a nonfiction shipwreck survival story but the best part of the book revolves around leadership and keeping people motivated.
The swimming analogy is also perfect for retirement planning. Most people get tripped up on this because of the time factor. They figure they have decades to plan and fund retirement so they use the go-slow approach, especially if they’re young.
You could probably establish a comfortable retirement plan in as little as 10 years if you threw all your resources into doing it. Then you could sit back and enjoy the rest of your life, knowing that you have a fat nest egg waiting for you at the end of your work life. How might that free you up to do other things you might want to do???