I've written a lot lately about finding balance. It's important to save for the future, but how do you balance that with enjoying today? Each of us has to address that question in our own way. A reader named Max wrote to share his own dilemma:
I've been working as a web designer since I was 18. I made a few financial mistakes in my early days: leased a car for four years, bought a couple of motorcycles, spent money on Stuff that had no value. I'm 25 now and I've owned a condo for four years. I was lucky to buy it really cheap and only have $100,000 mortgage left to pay.
Things have changed in the last two years. I've traveled a lot. I'm constantly increasing my knowledge and working on new business ideas. But I don't have the time to do anything about it because I'm always working…to for pay my condo.
Fortunately, I have no debts other than the condo. I have $5000 in savings. My total expenses are about $1700/month and I make about $2600/month. I made some calculations and I can easily bring my expenses down to $1000/month if I didn't own the condo.
After working as a web designer for nearly seven years, I'm sick of it. I want out. I want to bartend a couple nights per month and travel the rest of the time. Actually I'd be happy just traveling and doing any kind of work outdoors: bartending by the beach, teaching motorcycle riding classes, gardening, surf instructor…
Would it be wrong to sell my condo (I could get $160,000), take the profits, and go travel the world? Do a few side gigs here and there and enjoy life while I'm still young? I don't have kids. I'm not married, no girlfriend. No car, no debts other than mortgage. I've been wanting to live in Australia, California, Japan. I'm sick of cold winters in Maine.
I'm also scared to just “save money” eternally until I'm too dead to enjoy it. I don't understand the point of saving my money and working to pay my bills when I can just cash in now, take as much time off as I want, and still get by on a small salary doing work that I really enjoy — outdoors, where the weather is great.
I need advice, and my parents keep telling me to keep my “good” job.
This is an interesting question, one that many GRS readers wrestle with. The good news is that Max is in fairly good shape financially for this stage in his life. He has $5000 cash and $60,000 in equity in his condo. He has no debt. He has no ties.
Based on this, I think there's a balance to be found. I'm sure many folks would recommend simply finding another job, moving from Maine, and pushing forward with a sedate (but safe) life. And there's value in that. At the very least, Max should stay away from debt.
But at the same time, I can't help but remember my friend Sparky. Sparky didn't have $60,000. His wealth was more like $6000. But when he was Max's age, he packed up and traveled the world for five months. Sparky loved it.
Because he was not burdened by Stuff, Sparky returned to a financial position similar to the one he'd left. He didn't have a mortgage or other debt. His core savings and investments were still intact. He lived for five months without an income, it's true, but he spent exactly what he budgeted, and he had the experience of a lifetime.
Max has an opportunity that may never come again. How many of us at age 40 can simply pack up and travel the world? How many wish we could? (I do!) Knowing what I know now, if I were in his position I would sell the condo, put half of the money in savings, and then use the rest to travel on the cheap. I might even take a job in another country and live there for a while.
When I returned to Maine (or to Texas, or wherever), I'd start again from scratch, either as a web designer or as something else entirely. Maybe go to school. I'd use the remaining condo money to jump-start my life, to stay away from debt.
This advice may be counter to what you'd expect from me. I'm a huge advocate of saving and investing early. But I think Max already has a good start, and he has a chance to pick up something even more valuable than home equity: He has a chance to build life equity.
What would you do in Max's situation? Would you travel the world, too? Or would you parlay the good financial start into a stronger foundation for the future? What advice can you offer Max?
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.