Friday, February 1, 2008

A Clogged Drain and Living By Default

So, this is a story of how a seemingly clogged drain in a hotel clogged drain becomes a modern personal finance story.

Yesterday, I went to Vancouver with a couple of friends, for a night at the opera. This morning, I was bemoaning that one thing universal to hotels in all price ranges (I was sharing a room that was upwards of $200/night): the clogged bath drain. A couple minutes into my shower, and the water was inching towards my ankles.

Turns out, the default setting for the drain cover was closed. When I realized this and moved the lever, the water started to drain quickly, and then the lever fell back to the closed position. After a little of back and forth, the standing water was cleared and the drain stayed open on its own.

What does this have to do with personal finance? I started thinking about defaults and how people often just accept them. I nearly accepted that I had a bad drain, and didn't try to do anything about it. For years, I accepted the rates my credit cards offered, without ever trying to negotiate for a lower rate, or for really taking control and making the cards work for me by using low-interest balance transfers. I’ve known countless people that just pay the minimum balance on debt, by default, when they can afford to pay more. I also used to just accept that what I was paid was what I was paid, and that unless I got some big promotion or a magical fairy godmother, I would never make significantly more money.

I think that when you do things by default, it’s easy to fall into trouble or a rut – and this applies to more than just personal finance. Most people will never get rich by simply working for another person, unless there are commissions or top flight MBAs involved. I know I have an obvious disposition for people to try entrepreneurship. Yet, the amount of time I would have had to work at the hi-tech company (doing the same job I had), in order to earn what I currently do, would probably be the rest of my natural life – if ever.

When you’re growing up, and even in college, it’s so easy to miss the opportunities and variety of what’s available in the work world. I always had an idea that I didn’t want a regular 9-5 job, but I could never put my finger on what that might entail. I should also mention that even three years ago, I hadn’t imagined that I would be pursuing my current profession or that I would be working for myself. Though, I’m pretty certain that the current prevalence of the internet gives students far easier access to the variety of pursuits to consider. So, while now I have an idea of the scope of possible jobs that exist, I really wish I had this knowledge years ago.

My first job was doing telephone sales. It was a thankless, crappy job. After a brief tour of awful jobs, I eventually ended up doing peripheral food service work (cashiering, bookkeeping), and a few years later I landed square in the realm of Office Jobs. Once there, I thought that that was my future, and it was depressing to think that I would be looking forward to hitting the 5-year mark, so I could get an extra week of vacation time each year, and maybe at that point I would have a proper office (I didn’t), instead of working in a cube farm. My mother has done admin work for forever, and while she gets satisfaction from doing what she does well, I know there are other things she wishes she could do, or that she could’ve done years ago. It used to seem (to me) that small-scale entrepreneurs were amazing people who had exceptional gumption and drive. Now, I know that that isn’t entirely true. Yes, entrepreneurs definitely have drive, but not necessarily more than someone working for a company or another person – it’s just a matter of where their energies are focused. I’ve also learned that some people simply stumble into entrepreneurship (which is what happened when I sold hand-painted holiday cards years ago).

That’s a little tangential, but not really. In just accepting what I saw my mother and other people I knew doing, I was defaulting. I wasn’t reaching for more. I wasn't asking for more. I'm not sure I even thought receiving more was even possible. I was underpaid. I had multiple employers take advantage of my work ethic and skills. When I worked at the hi-tech job, I spent a couple years lobbying strongly to get my job classification changed. The change would’ve resulted in a (hoped) significant pay change. I never received it, yet I continued to stay there (though not much longer than the second refusal, but I’d already been planning on taking a year off to travel). It was a lot like being in an unsatisfactory relationship: I loved what I was doing, but I hated how little I was paid, and the love of the job kept me there even when I knew I was underpaid and (to a certain extent) taken for granted.

I don’t think that everyone has to be an entrepreneur to have job satisfaction. However, I do think that people can be much, much happier when they ask for more and pursue anything. This also applies to money, too. If you think you can’t do something, you won’t. If you think there are no options to make life better, you'll probably never find them. If you just accept that (non-mortgage) debt is a part of life, you will never be financially free.

How does someone avoid living by default? Think about what they like and what they want, and pursue that. Ask for more. Be willing to try new things (changing a job or career can be a difficult decision and process, yet it can result in infinitely more job satisfaction and happiness). Don’t accept what appears to be the status quo. Take responsibility for your finances and actively work to get them to a level that you’re comfortable with.


Anonymous said...

I really enjoyed this post. That's exactly the trap that it's so easy to fall into -- just accepting things the way they are.

Anonymous said...

Great story. I know how easy it is to get stuck in a rut, comfortable with the way things are. The problem with a rut or financial inertia is that you're going to keep getting the same results unless you do something drastic to change course.