You Can Escape the Rat Race & Live Meaningfully

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Well, I did it. I broke free from the rat race.

How did I do it? I retired. (Much to my amazement.) What does retirement mean to me? It means I never have to work another day job again in my life. It doesn’t mean I never will. It just means that based on my projected lifespan and my finances, I don’t have to.

How did I retire? Well, first I got lucky. Not everyone who has a goal and saves diligently is able to retire. Still, that’s what I did. I had a goal and I saved diligently.

And I was a cheap-ass bastard and still am. Which means I can live on very little. And that is the biggest factor in my ability to retire. Not having a boatload of money in my 401ks and investment accounts. Not getting rich.

Nope, deciding that I don’t need to live on $124K a year but can live on much less.

And you too can escape the rat race if you can figure out how to live without all the things you think the rat race brings you.

So what is the rat race anyway?

What Do I Mean by the Rat Race?

When I refer to the rat race, I mean the way of life that dominates modern society. People believe that they have to compete for their job, their money, their power and their status.

The rat race grinds down workers who sell their labor to others. It grinds down small business owners who feel they are constantly in a race against extinction.

The rat race is the idea that you’ve got to work really hard and really fast or you’re not going to survive. The rat race apologists and propaganda artists exhort you to get more done, be more productive, consume more, be faster at what you do, work harder and smarter, get ahead, and do what society tells you do. Compete, compete, compete without rest. Consume, consume, consume without rest.

That’s what I stopped doing. How did I do it?

Step 1: Yeah, I did a budget and tracked my expenses.

Just like they always tell you to – I did a budget. Oh boy, did I budget. I do not come from a family of budgeters. Instead, I come from a background of not having very much money. And that made me want to budget. I had very little money, so I wanted to think carefully about what I spent it on. I wanted control. I wanted to exercise conscious choice.

This business of exercising conscious choice is a big part of being able to escape the rat race. Breaking free from the rat race does not happen magically. You can make enough money to put yourself in the top 1% and still be pretty sure that you’ve got to keep up the grind or you’re gonna fall off the boat and drown.

Budgeting and tracking your expenses help you escape the rat race by giving you control over your decisions. You decide what you’re gonna spend your money on. You decide whether an expense is worth more rounds on the hamster wheel. You decide what’s important.

You don’t let society and the push toward consumerism make the choices for you.

Now it’s possible that I did overdid it a bit. I didn’t have a script or a mentor or a role model so I might have taken my cheapskate ways a bit farther than was really necessary. But I am grateful for those cheapskate ways now.

This business of scrimping and saving and working towards goals of a better life for yourself or your loved ones is actually the time-honored way that people used to pursue the American dream. It’s only really since the 1980s that people have been relentlessly told that they must spend, spend, spend in order to be a good ‘normal’ member of society.

Step 2: I made it my goal to make a ‘profit’ each month

In my lexicon, having money left over at the end of every month was the same as earning a profit on my work. Like a business, I wanted my revenues to exceed my costs during each period. The excess revenue I considered profit. I love profit!

I found it a lot more motivating to consider my excess revenues profit than to consider them savings. Profits can be re-invested, distributed, or kept on hand for emergencies or future opportunities.

You get to decide what to do with your profits. But if you’re not running a profit, then you’re gonna go broke. You should always be making a profit on your labor (if your labor is what you’re selling).

That’s why you keep track of your revenues and expenses, so you know how much profit you are making.

And then you constantly tweak your formula to optimize it. If your budget didn’t account for certain expenses you consider essential, then you’ve got to change your budget to account for those things. The idea, like the idea of business, is to constantly grow your profits, to maximize them. I would redo my budget every six months or so, updating it based on what happened during the last 6 months or what I anticipated would happen in the next six months.

Having the idea of profit in mind makes you want to think strategically about how to optimize your inflows and outflows. It makes you consider the payoffs and drawbacks of things you can do to increase revenue and the payoffs and drawbacks of what you spend your money on.

Step 3: Communicate and Compromise

This one maybe I wasn’t so good at. But it’s still very important. The other people who can affect your financial situation need to understand where you’re coming from and what your values are.

Your partner needs to understand that you’re a cheapskate. Your kids need to understand your attitude toward money. Your friends, your coworkers, and other people you associate with need to understand what to expect from you financially. Being an embarrassed cheapskate doesn’t work. Being a taciturn cheapskate who never explains herself breeds resentment, and that’s not good either.

People need to understand why you’re not going to the fancy restaurant, buying the expensive car, wearing the most stylish clothes or sending them to the most expensive private school. If you don’t want to accept a big promotion that would take you away from your family and has RAT RACE stamped all over as far as you’re concerned, the other people affected need to know that.

They don’t have to like it, but they need to be able to anticipate your reactions and understand them. Once they know, they’ll come around to accepting it, even if they would prefer that you jet off to Aspen to ski with them or buy the most expensive champagne.

Other people may occasionally give you a hard time about how you handle your finances. But…. if you are upfront with the people who need to know, then you won’t spend your whole life apologizing or arguing or feeling inadequate. You won’t make decisions you regret due to social pressure you never really stood up to.

You also need to be able to compromise with your partner, children, friends, family, and anyone else that’s important. The goal is not to make everyone miserable. The goal is not to avoid all indulgences. The goal is to not to never be generous. The goal is to make conscious choices.

If something is really important to someone who is really important to you, figure out a way to make it happen. And – of course – don’t pick a partner who cannot live with your values and choices.

Step 4: Be Specific with Your Goals

This is another tried and true bit of advice. Goals need to be specific. If your goal is to escape the rat race, you need to know what that means to you. Retire at 40? Work part-time? Own your own business? Marry rich? Be a stay-at-home parent? Live off your investments? Be a digital nomad?

My goal was to not spend my entire life working a day job. My goal was not to never work a day job. Sometimes I liked working that way. For awhile.

But I never wanted to identify with a particular job or feel trapped into having to keep it. I never worked a job I couldn’t walk away from in a second if I wanted to.

My goal was to not feel like I was constantly striving to ‘get ahead’ according to someone else’s definition of what that meant. My goal was not financial security. My goal was to be able to do what I wanted. To able to exercise the conscious choice and control that was so important to me personally. Your goal, the underlying feeling, may be different.

Once you know the underlying feeling, then you set the goals that reflect those values. And you set the metrics you want to track to achieve those goals. In business, they call them KPIs, key performance indicators. You decide what tells you that you are living the kind of life that you want – or not living the life you want.

For me, as I mentioned, a key performance indicator was what I called profit. I found the concept of profit rewarding. You need to decide what rewards you. If you don’t experience a sensation of reward when you meet a goal or check a metric, you haven’t chosen the right metrics.

For you, breaking free from the rat race may simply mean having enough cash on hand to buy what you want, travel where you want to, splurge on what you desire, build your dream home, or something else that relates specifically to spending without worry. Your metrics and your goals should reflect what feels rewarding to you.

It all comes down to you being able to do you!

Step 5: I Made Use of Credit – Loans, Credit Cards, Etc.

As you may be aware, nowadays credit cards can be useful tool for managing your finances, and even for breaking free of the rat race. Strategic use of credit cards (or other forms of credit) can allow you to invest when you might otherwise not be able to swing it. You can invest in your own business, in education, or anything else that will pay off down the line to a greater extent than your cost of borrowing.

I borrowed to finance my education, and to finance business and personal ventures that ended up being well worth it to me. The secret, of course, is that I paid off my loans quickly and never lowered my credit score.

Making good use of credit and financing is a key skill for achieving your goals. Using credit takes effort though. You need to research sources of credit, interest rates, prepayment penalties, repayment amounts, and, of course, how you are going to pay off what you owe.

In my experience, using credit isn’t something to be afraid of, but it is something to use in a goal-directed and thoughtful way. Again, it’s all about conscious choice and control.

You can use credit cards, as many people do, for airline miles, to achieve your goals of traveling at affordable cost – if being able to travel is part of your definition of breaking free from the rat race. You can use credit cards for the cashback bonuses, discounts or deals to decrease your expenses on things you would otherwise be spending money on anyway. You can use your home to finance improvements to your home that you think will pay off in a larger sale price down the line.

In all cases, though, I have found that you must figure out how you are going to repay the loan and keep the cost of credit low – even if you are faced with an unexpected emergency or expense. One of the main reasons people feel trapped in the rat race in the first place is that they are overwhelmed with debts they didn’t think through before accruing.

This is especially true when it comes to financing your home. The temptation is always to buy more house than you can afford. This can pay off if you are able to keep up with payments and sell the house at a profit. But a mortgage is most definitely one of the common and significant reasons people end up trapped in the rat race to begin with. If there is anything to be super-careful with, it is the cost of your home.

Step 6: I Had Faith

This may be the single most important element of escaping the rat race. You need to believe you can do it. Did I doubt it at times? Yes. But even in the worst of times I always had this faith in the back of my mind that I would make it. I know lots of people who do not have faith in themselves or in their future. Their sense of worry overcomes their ability to take actions that would further the goal of breaking free of the rat race.

Many people unconsciously believe that the participating in the rat race is the only normal way to live. They think that if they’re not tied down, they’ll just float away. I knew one person, who every time he had a chance to break free – would take on massive debt so that he felt obligated to continue the grind.

The grind is the only thing some people know; it’s the only thing they can envision. The ability to imagine different ways of living and thinking is crucial to stepping away from the rat race.

I know many people who have been terrified to step away for even a moment (let alone permanently) for fear they would have no identity without a corporate job, unending stress, no leisure, and a boatload of imaginary obligations. Many people that I have met don’t have faith in their ability to cope with any lifestyle that could be an alternative to the rat race.

Step 7: Know That the Rat Race is Just a Game and That You Don’t Have to Play It to Live Meaningfully

Can you imagine your life’s purpose? Can you identify what gives you meaning? What’s important to you? What can you contribute to the world? The chances are very good that nothing about the rat race in any way allows you to live with the real meaning you desire. Is your legacy really gonna be that you were a dedicated employee? When you die is God gonna say to you, ‘well let’s send you right to heaven, you blew off your friends, neighbors, family, and everyone else for your job, but you sure did contribute to corporate profits’?

Is the rat race going to help you make the world a better place? You can hope so, but once you step off the hamster wheel, you can easily see how meaningless everything you were doing really was. What motivated you, most likely, to stay on the hamster wheel, was fear. Fear of not surviving, not having money, not fitting in, not having status. You were afraid you were gonna get kicked off the boat if you didn’t follow the rules. Well, you can jump off before you get kicked off, you know. It takes courage and planning and desire and faith and a bit of luck and some strategy and deep thought.

But you can do it.

The thing is, the rat race is a game. It’s the game of capitalism, of the economy. The idea is that your nation will get wealthier if you pursue your own economic interests by trying to make as much money as you can within the system. But the system of capitalism is quite literally designed to make sure you never get ahead if it’s working correctly. This is not a conspiracy element of capitalism, it’s the driving engine of economic growth. People compete with each other, businesses compete with each other and if things are working correctly, they are constantly racing after advantages that the very mechanisms of capitalism will erase. Capitalism is designed to make everyone work really hard, run really fast, to end up in exactly the same spot relative to everyone else that they started in.

So capitalism gets you to work hard for the benefit of society, while you believe that it’s in your own benefit, but it isn’t. Understanding this is why so many people want to start their own businesses these days, so that they can break free of the rat race of working for other people’s benefit but not their own. The thing is, with the advances in artificial intelligence, even owning your own business may not work, as AI is likely to throw the whole economic system into such turmoil that many current structures will have to change. If computers can fulfill the tasks of the economy better than most humans, very few humans will be able to survive by working. Which means very few humans will be able to buy what you sell as a business owner unless other means of providing people with income become the norm. The rat race may no longer be the name of the game anymore. So the time to imagine how you would live without the rat race is now!

Your Call to Action: Stop Believing the Rat Race Will Get You Anywhere You Want to Go

And, of course, get pretty fed up.