Learn how you can escape the rat race with these 8 awesome ideas! Being able to obtain financial freedom to get away from that 9-5 is the ultimate dream!
If you’ve been employed for any length of time, you’ve likely heard of “the rat race”, you may have even talked about escaping the rat race from time to time. But what are people really referring to when they talk about the “rat race”?
What Is the Rat Race?
The technical definition of the rat race is “a way of life in which people are caught up in a fiercely competitive struggle for wealth or power”. People strive to make money and then find themselves in a never-ending struggle to earn more and more money to sustain lifestyle creep.
This turns into a vicious cycle of earning more and spending more, so that eventually it becomes clear that earning any amount of money will almost certainly never be enough.
And this becomes the rat race. It’s soul crushing and you should do your best to avoid it. I speak from experience.
But what if you’re already in the rat race? Is it too late to get out? No, it’s not! These tips will show you how you can escape the rat race!
Change Your Mind Set
The sole reason people get caught up in the daily grind of life known as the rat race is money. It’s human nature to want nice things and of course, those nice things must be paid for.
It’s also human nature to think you’re “deserving” of whatever it is you want. And that you deserve “it” now.
Take a new car for example. I’m sure you’re deserving of a brand-new car. You’ve probably been working a while and can afford a car payment, right?
But here is where people get tripped up. So, what if you deserve it?
The average new car price in 2020 is $40,000. So, if you’re buying a brand-new car, you’re spending some serious cash.
Let’s say you don’t want to spend that much so you look around and fall in love with a little SUV that goes for around $35,000.
Even at $35,000 you’re going to be making car payments for a long time to pay off that brand new car.
And, if you happen to pay cash, $35,000 is still a ton of money to fork over for a car. You’re not doing yourself any favors by signing up a $35,000 car.
You’re just prolonging your time in the rat race.
Think of all the money you’d earn if you invested that $35,000 instead. If you invested that same 35k for only 10 years at 6% you’d have over $60,000!
So why not change your mindset. What’s wrong with a new car that costs “only” $20,000? Or how about a car a couple of years old? You’ll end up saving a huge chunk of money that you can invest and thus get you out of the rat race that much sooner.
I bought a car for $18K in 2013 and am still driving the same car now in 2021. And I plan to drive it until it costs more to maintain than what it’s worth. No car payment=more freedom!
Learn to be happy with less and practice delayed gratification and you’ll be escaping the rat race quicker than you think.
Create Passive Income
Passive income is a surefire way to escape the rat race. When you’re working, you’re basically trading your time for money.
With passive income, that isn’t the case. It may take a while to get your passive income strategy in place, but once you have established a passive income stream, you have freedom and can effectively escape the rat race!
There’s a lot of lucrative passive income ideas from blogging to real estate (my favorite). Explore some ideas that intrigue you, then get to work in creating your passive income plan.
Become A Minimalist
Minimalists don’t like “stuff”. They don’t buy unnecessary items just to fill up a home. You won’t find many trinkets in the home of a minimalist.
For minimalists everything has a purpose or it doesn’t come into the home. As a minimalist, you’ll buy one high quality item that will last forever versus buying a bunch of inferior products that don’t last.
Buying quality will save you money in the long run. And, more money saved equates to less time for you in the rat race!
Plus, your space will belong to you, not your stuff. Learning to live a simple life can be hugely rewarding.
There’s nothing more beautiful than a clean, fresh, sparsely decorated home. Without all the clutter, the home itself really shines.
Another benefit of being a minimalist is the less stuff you have, the less space you need to store said stuff.
And, the less time you’ll waste acquiring stuff (so you can spend that time making a plan on how to escape the rat race even faster).
And, best of all, you won’t be spending a fortune on junk you don’t need.
The average newly constructed American home is much larger than homes in most other countries.
For instance, the average Swedish home is 1000 square feet but homes in the United States tend to be much bigger – with the average being around 1650 square feet.
Do you really need as much space as you have? With so much space comes so many expenses. SO. MANY. EXPENSES!!!
First, you have a big mortgage (unless you paid cash). Having a mortgage that has to be paid every month can have a huge impact on your ability to obtain financial freedom.
Secondly, your monthly bills are high because it costs a lot to heat and cool your spacious home. When it’s 100 degrees out and you have the air blasting, that 2500 square foot house can cost a fortune to cool!
And, you have to furnish that big 2500 square foot home. As you know, being a homeowner is super expensive.
When people buy homes, they think about the cost of the home itself, but they forgot to factor in the ongoing costs to keep up the home.
And chances are you won’t be satisfied with your starter home for long. Because pretty soon all your friends will be moving up into even more expensive homes.
So, you might think you have to as well. So that 200k starter house gets traded in for a 400K house after a few years.
And a bigger mortgage comes with it. So now you’re on the hamster wheel of endlessly trying to earn more money so you can make your house payment and also pay all the other bills that normal people accumulate in life.
This is usually a losing proposition. So why not change your mindset.
What’s so wrong with a 1200-1500 square foot home that you can pay off much more quickly?
If you get a smaller home, you’ll save money and will be able to get out of the rat race. Even if you have multiple kids, it’s doable if the kids share a room.
And sharing rooms is good for siblings. It promotes bonding! Read some tips for downsizing with kids.
Become A Digital Nomad
There’s never been so many remote jobs available. If you want out of the rat race consider going digital.
Even if you’re working, waking up in the natural beauty of a glorious national park will take the sting out of logging in.
It’s definitely possible. You just need a plan. And if you don’t see an RV in your future, you can still be a digital nomad (and lower your housing expenses) with house sitting.
Find A Side Hustle
If you really want to escape the rat race, one thing that’s probably stopping you is money. To build up your savings, so that you can exit faster, get yourself a side hustle.
There is the perfect side hustle for everyone. Even something as simple as using Rakuten helps. Other lucrative side hustles include being a rideshare driver with Uber or Lyft , food delivery driver with Grubhub, Doordash or Uber eats.
If you don’t like to drive, try something like freelance writing through Upwork or Freelancer. Or, for an admin side hustle, try being a virtual assistant. Any of these side hustles will put more money in your pocket and help you escape the rat race!
Say you find a side gig that pays $15/hour if you work only 10 hours a week, that’s $600 per month extra. Chances are you can likely make $20/hour which equates to an extra $800 per month!
In a year that’s almost an extra $10k for work you can do remotely. Here are some more ideas for side hustles:
- The Best Night Time Jobs
- Low Cost Business Ideas
- Best Apps to Sell Photos
- Start a Bakery Business
- Work at Home Jobs
- Start a Blog
Find Meaningful Work
Sure, we all need jobs to pay the bills. But when your job becomes nothing more than a paycheck, it’s time to re-evaluate. Life is supposed to be enjoyable, at least most of the time.
So, if your days have become nothing more than drudgery day in and day out, it’s time for a change.
Spend some time thinking about what type of work you’d really like to do.
Are you working 12-hour days in a corporate environment making more money for your CEO when what you’d really like to do is work for a non-profit where you can make a difference?
It is possible to make a major career change, but only you can make it happen. And, it needs to start with a plan!
Once you have your sights on the type of work you like to do, research to see what jobs in that field pay.
If there’s a gap between what your current job pays and your ideal job, think about how you can close the gap.
What expenses can you cut? What lifestyle changes can you make? Map out a timeline for transitioning to your ideal job.
It sounds cliché, but if you can find meaningful work – something that really excites you – then even if you’re working, you won’t technically be in the rat race.
You’ll be doing something you love and getting paid for it. That’s a total win-win!
Pay Yourself First and Invest!
If you’re not that great with budgeting, the number one rule you need to remember is pay yourself first.
You may also want to try one of these budget planners.
If you don’t pay yourself first and try to save what’s leftover every month, you’ll never have enough money to leave the rat race. Try using the cash envelope system to get your budgeting in order! It really works.
And there’s more to paying yourself first and just throwing that cash in a savings account.
You need to invest that money so you can take advantage of compound interest.
Look into companies like Fidelity and Schwab to set up accounts and for investing strategies.
Being able to escape the rat race and live your life the way you want to is the ultimate dream. Having financial freedom allows this, and these tips will help get you on your way!
Have you been able to escape the rat race? Comment below and let me know how you did it!