#2 Meet The Pragmatist

six figure guitar teacher Aug 08, 2021
make more money with guitar lessons
Whoa! Did you read that nonsense yesterday?
Who is this Six Figure Guitar Teacher and who does he think he is? He thinks he’s got it all figured out and is trying to offer financial advice to people less fortunate and well off than himself. Surely you can retire early or create a life of freedom if you’re born into a rich family, live in a well-to-do neighbourhood, get a good education and never make mistakes, but what about the rest of us? Is there hope fo the common person at all?
My name is the Pragmatist. I'm contributing to this blog to add some much needed perspective to the hard-ass idealism of this Six Figure Guitar Teacher guy (as if you can make that much money teaching guitar anyway?)
So, life is hard in the modern world, rapid changes in the socio-economic and business sector mean frequent layoffs and difficulty in holding a steady job, especially at the time of writing during the current covid-19 pandemic and frequent lockdowns that are becoming a normal part of life. Inflation means that the prices of health care, fuel, groceries and education are skyrocketing to higher than they’ve ever been and the average Joe is really struggling.
Some people manage to get by, while others go bankrupt and lose everything, but most are stuck on the endless money in/money out treadmill and find themselves in the same position financially every year, or worst, a little bit further behind where they were previously until all life and hope is sucked out of them. Is it just luck, or is there something we can do to beat the odds ourselves? As a Pragmatist I’ll step in to present small but powerful steps to help you get ahead. There is sometimes a fine line between financial solvency and going bankrupt, and this is worth exploring.
How fine is that line? How about $25 a month?
Here’s you lesson for today: say you are breaking even financially, paying your bills, buying $500 a month worth of necessities on a credit card that gets paid off In Full every month so that you avoid the interest, but aren’t managing to save a single cent.
Then, a Subway opens up next door to your place of work and you start buying lunch once a week instead of bringing your lunch to work with you. All of a sudden you can’t pay your full credit card bill each month so a small balance starts to accrue.
  • In month 1 there is a $525 balance, you pay $500
  • In month 2 you are charged interest on the unpaid $25 from the first month at 20% so you’re $25.42 short.
  • In month 3 interest on $25.42 (which is $0.43) is added to the $25 shortfall for this month and you are now $50.85 short.
  • Whoopsie! You are just a few days late for the payment and suddenly the whole $550 balance is hit with interest of $9.16 plus a $30 late fee. Now you’re $89.16 in the can.
So that one subway meal a week cost you an additional $89 three months down the track... That’s not so bad is it? Wrong!
If you keep this up for 10 years you will have a credit card debt of over $5000. If you couldn’t pay it off when it was $525, how the bloody hell are you going to pay it off when its over $5000?
And this is just a quick calculation for someone spending $25 a week. Imagine somebody who spends $25 a day on eating out or other nonsense that they don’t need.
This would accrue to a whopping $50,000 debt in 10 years!
This might seem like an extreme case, but it’s a great example of how small yet frequent amounts of undisciplined spending can accumulate into massive amounts of debt that will keep you in the red for life if not brought under control.
So the lessons for today are:
  • Never EVER let a credit card go even a single month without paying the balance in full. The interest rates are criminal and if you ever miss the due date they suck you in by charing you interest on all of your purchases for the whole month.
  • There is a very fine line between making ends meet and going into the red, and it’s often a very small amount that builds up to a monstrous amount over time.
  • On the flip side, there is a fine line between just making ends meet and putting yourself on an upwards trajectory to becoming very wealthy and living a life of freedom and abundance!
What if the person above found a way to save $10 a day instead of spending $25 more than she made each month? The short answer is that the same person would have $50,000 ten years from now instead of a massive debt.
And that’s just $10 a day! Imagine what we can do when we really start cutting expenses and turning on taps that produce more income!

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