The Value Of Facing Down Your Financial Fears

The 4-Hour WorkweekRecently, I was reading The 4-Hour Workweek and I tried out a mental exercise from the book. Basically, the objective is to make a list of your absolute worst-case scenario with respect to your job and then compare it to the dreams you’re giving up in order to stave off any chance of that worst-case scenario. The idea is to make it clear that giving up the dream simply isn’t worth it because, when you really analyze it, that worst-case scenario isn’t really that bad at all.

It occurred to me that it’s quite easy to apply the same basic exercise to personal finance. Give this exercise a try:

First, imagine the worst possible personal finance scenario in your mind. Would it be losing your job? How about having your house burn to the ground? What scenario really makes your stomach flip over when it comes to money?

Once you have the scenario in mind, figure out exactly what you would do if that happened. Would you sell your home? Would you sell your car? Move to another part of the country? What would happen to your life after you did those things?

Now let’s do the opposite. What do you want to do that you cannot because of your financial requirements? Would you like to move somewhere else? Would you like to try out another career? Imagine your life in detail if you could actually follow this dream. What would it be like? This dream should put you at peace.

Ask yourself this: would the sacrifices you would have to make in the aftermath of the disaster allow you to follow your dreams? If they would, then what is keeping you from following your dream?

For me, my dream is actually moving to the Pacific Northwest (Washington, northeast of Seattle/Tacoma), getting a little house in the middle of nowhere, and becoming a writer. For a very long time, this seemed like an impossible dream because I thought I would have to give up so much to actually make it happen. I would have to leave the financial security of my current job, move away from everything I’ve ever known, and so on.

But you know what? When I sat down and started looking at what I would have to give up if I lost my job and had to start working minimum wage, I realized that the possibility of living my dream would actually be worth the material things I’d have to give up in order to live that life. Making that realization was a powerful step, and it made me start living my life in a way that puts my dreams within reach.

In fact, the only thing that keeps me from living that dream right now is the fact that I actually do love many, many non-financial factors of my life as it is right now, so it’s a matter of choosing the best life for me. I’ve already made the choice to start living my life so that losing my job (or other financial disasters) wouldn’t really impact things too much. I’ll still have the things that are most important to me: my wife, my child, my thoughts, walks in the park on sunny afternoons, and so on. Compared to things like that, working a job that stresses me out just to afford a new car or a monstrous house doesn’t really sound like much of a life, does it?

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