Exit Costs

Problems in life occur when you are trapped in a situation or arrangement that no longer benefits you. Never ever put yourself in a position where you cannot walk away or if walking away incurs high exit costs.

For example, you start a job, borrow heaps of money and pursue a high cost lifestyle (e.g. marriage, mortgage, and family), and then suddenly you hate your job. You cannot leave because you have debts and obligations.

Or perhaps you get married to a woman you initially love but then you hate her but you cannot leave because you have children you’re legally obligated to care for, and you’ll be divorce raped, have half your assets seized, and incur alimony liabilities if you try to exit the arrangement.

Commitment is the enemy of freedom and a lack of freedom destroys life satisfaction. Happiness comes from freedom and freedom comes from deliberately and consciously stripping away commitment and obligations from your life.

You must structure your life so you can walk away from any arrangement whether it be friends, family, intimate relationships, and even business relationships. Even better than a plan is an exit plan.

Practically, you should remove any source of debt or obligation in your life and then build multiple streams of passive income. The easiest way to achieve passive income is to buy and hold a diversified portfolio of shares, ETFs, and government bonds. Once passive income is high enough, you are no longer dependent on your job, which means you can walk away from your job if you want.

The ultimate test of your freedom is what I call the “do nothing” test. To determine how free you are, then just stand still and do nothing. If you can stand still and do nothing (or very little) and still live, then you are a free man. If passive income funds your necessities such as food and shelter and you don’t need to work to keep yourself alive, you are a free man. The more you have to do, e.g. pay debt, work, look after a woman, or look after children, the more of a slave you are. Slavery is a continuum. You cannot remove all obligation. Even feeding yourself requires you to move your hand. You are obligated to eat and to put a roof over your head. However, just because you cannot achieve perfection it doesn’t mean it’s not worth achieving near perfection. Just because it’s impossible to achieve perfect sterility it doesn’t mean doctors should perform surgery in the sewers.

As much as possible, remove all obligation or commitment from your life, and remove any dependence you have on others. Always have an exit plan for any arrangement.

Your greatest power is your ability to walk away, so structure your life so you can walk away from anything.


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