Woke and Broke; Is That Where You Are?

It seems that we have entered a new era of being woke. Woke to the society’s social ills, woke to political injustices, woke to unfair policing. But what is missing from these discussions is the need for true financial literacy. Now there are large numbers of woke people in Americans who are taking to the streets to protest causes they feel most passionate about. But many of them are woke and broke.

Many people tell me that I should not be so concerned about money and the future because “everything will work itself out.” But, then they want to have these deep conversations about America’s social ills, injustices and how difficult it is to be a minority trying to get your slice of the American pie. There’s a disconnect when wealth and economics aren’t a part of the conversation.

Unfortunately, a lot of American’s are okay with us being financially asleep. Generations of the past never had to worry about saving for the future; they had pensions. They worked at a job for 20 or 30 years and the pension checks just showed up in the mail. But for today’s workforce, that concept no longer exists.

The story below speaks to a time when I was financially asleep. I hope this situation is one that most of you can relate to. And if you find yourself in this situation, I hope that it wakes you up.

When I was young, I dreamt of be middle class. It was my dream to work in an office environment making about $25,000 per year. Growing up, we were a part of the working class to working poor. What I realize, now looking back, is that ignorance is bliss. Because from where I stood at the time, I couldn’t dream any higher than being middle class. I did not know anyone in the middle class and if truth be told, I did not know any white-collar professionals. Most of the people I knew growing up were members of the working poor to working class.

The idea of being middle class at the time meant freedom. I believed that if I could become a member of the middle class I would have a level of financial stability I did not have at that time. These thoughts and ideas were not based on sound financial principles, they were based on information I learned from watching television. Television also taught me that I needed a money guy to ensure my continued stability of my financial future.

So, many years later I achieved my goal of being middle class, I got a money guy and I thought I was all set. I had gotten my first job out of college. I was making $28,000 per year so, I figured that from that point on life would be on cruise control. I was giving 3% of my income, $70 per month, to my money guy so I would have no concerns about the future. When I was ready to retire 30 years down the line I would be all set.

Now think about this. If I spent all of my working life making a $28,000 per year salary and contributed 3% into a retirement saving account, I would end up with a whopping $105,212 to live out my golden years. If I wanted to have a chance at making that money last for 30 years of retirement, I would only be allowed to take out $4,200 per year out from this account. I have a question for you all. How do I go from living off of $28,000 per year to $4,200 per year? Now to be fair, I need to add in $9,700 per year for my estimated social security benefits. This brings my total retirement yearly income up to $13,900. That means I would need to adjust my lifestyle spending by half. How many of you could cut your spending in half if you had to?

In the scenario above I would need to get a job in retirement or never retire. Unfortunately, a lot of Americans are unknowingly in-line for this outcome. They are not woke to the reality that they are working to be broke in retirement. They are placing their financial future on curse control, assuming that something else (aka Social Security) will ensure that they will have enough money in the future. If you are in this situation it’s time to make a change. Let’s get woke to our financial situation.

As for me, I am woke to the reality that our financial system purposely makes investing seem complicated. I am woke to the reality that most financial corporations and institutions are working to ensure their own future not mine. I am woke to the reality that most Americans are financially illiterate. I am woke to the reality that it is my responsible to grow my own wealth. I am woke to the reality that I cannot pass the responsibility of my financial wellbeing on to anyone else.

So, I am all for being socially aware and woke. But being socially woke and broke is a bad combination. Being socially woke and not being able to do anything about it out of fear of losing the job you have and need is another problem. Keeping members of society making payments and needing a job is a way to control society.  If we want true freedom we must first become financially free. Keeping us tied down with credit card payment, car payments, and mortgages is a way of controlling our actions. If we want true social change we should also work to free ourselves from various items that drain our resources.

Stay woke, but not broke.

And remember that without sacrifice there is no growth

The Broke Architect

(-$19,200 negative)

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