Main Street Finance

No Free Lunch

By Jeff

Continuing with our previous topics of how to make more money with your money, and how to just make more money period, I want to address the myth getting of something for nothing.

One thing that residents of Main St should be aware of, if they are not already, is that there is no such thing as a free lunch. In other words, you can’t get something for nothing. I repeat; you can’t get something for nothing.

In theory, almost everyone knows that this is true, but somehow a lot of people keep falling for this scheme of getting rich quick. From infomercials about how to sell junk for a fortune, to ponzi schemes guaranteeing 150% returns, there is always someone selling a way to get rich, and surprisingly, someone willing to buy it (You gotta love the free market). You may have even been one of those people willing to buy it.

What We Learn From Infomercials

They come in many forms, the example I’m going to use here is the one we’ve no doubt all seen, the late-night infomercials. You know, the one with the middle-aged man in a Hawaiian shirt standing next to his twenty-something wife with a conveniently placed boat in the background talking about how he “just spent a couple bucks and learned how to day-trade his way out of debt” and how, “it was easy, I just did what the software told me to do”.

The part about seeing the infomercial isn’t the surprise in the story, the surprise in the story is us—we continue to watch the infomercial, captivated by the tiny thread of hope within us that makes us think, “hey, maybe this one is the real deal. What’s $200.00 anyway, if I can get rich?!” Luckily that’s when most of us shake ourselves, get off the couch, and go to sleep or at least turn to the P90X infomercial (at least there you can get something from it).

Nothing Free Here!

The problem is that these advertisements for a free lunch are showing up everywhere now, not even hiding under the cover of insomnia and the knowledge that judgment is poor without sleep. They are even in bright daylight and in respectable periodicals.

I saw one recently on a well-respected website that told the story of a person who was very proud that he was living a six-figure lifestyle on a $30,000/year salary, which of course sounds great, right? Who doesn’t want to buy a new Mustang, own your dream home and wear designer clothes and jewelry all while making a little more than a waiter at Chili’s(not a knock on Chili’s. I love that place, I’m just making a comparison).

That sounds amazing! It’s also too good to be true. In fact, I put the numbers in the article to the test and found that with what he was claiming that after taxes and things like a car note, gas, and groceries, that he would have about 25.00/month left for discretionary income. Oh yes, that was only if he chose to live without electricity, had no other dependents and put nothing in retirement

The moral of the story is that you can live on 30,000/year and have a great life, but you have to live within your means, or you will end up with a lot unwise consumer debt, and really fast. Remember, there is no free lunch.

What do you think? Can you live the dream on 30k/year?

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