The Rat Race is a description of the 40 year plan to work for some-one else and then eventually retire at 60+ years of age and then hoping to have enough money saved to actually live on.
Below is a definition according to Wikipedia:
The Rat Race is a term used for an endless, self-defeating or pointless pursuit. It conjures up the image of the futile efforts of a lab rat trying to escape whilst running around a maze or in a wheel. In an analogy to the modern city, many rats in a single maze run around making a lots of noise bumping into each other, but ultimately achieve nothing (meaningful) either collectively or individually.
The Rat Race is a term often used to describe work, particularly excessive work; in general terms, if one works, one is in the rat race. This terminology contains implications that many people see work as a seemingly endless pursuit with little reward or purpose. Not all workers feel like this. It is the perceived Conventional Wisdom, for example, that those who work for themselves are generally happier at work.
The increased image of work as a 'Rat Race' in modern times has led many to question their own attitudes to work and seek a better alternative; a more harmonious Work-life balance. Many believe that long work hours, unpaid overtime, stressful jobs, time spent commuting, less time for traditional family life, has led to a generally unhappier workforce/population unable to enjoy the benefits of increased economic prosperity and a higher standard of living.
People who have to work every day and trade their time for money are caught in the Rat Race, and most become trapped for a lifetime. If you have to go work every day, for at least 8 hours per day, just to pay the bills, then you are caught in the rat race! Here's the problem with the traditional 40 year plan:
- 63 out of 100 people age 65 depend on Social Security for food and shelter
- 23 out of 100 people age 65 are still working and CAN NOT afford to retire
- 29 out of 100 people never live to see age 65. Stress kills and most stress is related to financial reasons
- 4 out of 100 people age 65 can afford their own retirement
- 1 out of 100 people age 65 are wealthy
Only 4% of people have enough to retire on at age 65? Did they forget to mention that in your interview? “Oh by the way, Mr Jones, do you know that if you accept this job, there is a 96% chance that you will end up dead or dead broke by the time you are 65.” Did they forget to mention that?
Wealthy people don’t trade their time for money. Wealthy people have learnt to leverage other peoples time and other peoples money. That sounds like wealthy people take advantage of others, and in a way, yes they do, but not in a bad or illegal way you might be thinking. A business owner leverages other peoples time by hiring people to work for him/her. Your boss is making money off you and therefore leveraging your time. If a business owner employs 100 people and profits just 5% of each of their wages, then every month he makes 500% of the average wage in his business, and he has not done the work, his employees have. A property investor leverages other peoples money when he takes out a mortgage loan for a property and then has tenants pay the mortgage off. He has an asset, increasing in value and has someone else paying it off.
It is possible to Escape the Rat Race! It takes small steps at first and consistent action but eventually you will start to gather momentum as your businesses and assets grow. As they grow, you have more money available to invest, the more you invest, the more assets you acquire. The more assets you have, the more money they create to invest and it snowballs until you reach a point where you are happy with your lifestyle – Financial Freedom