I’m still "broke", even if it doesn’t seem like it…

Anonymous posted in response to my to one of my posts about making $20,000 net in 2 months, and how that was HALF of his/her salary and that by no means could I really call myself “broke”.

You’re partially right.

It’s true. When I started about 2.5 years ago, I was $53,500 in debt, with no savings whatsoever to my name save for a couple thousand in the bank. I was living paycheque to paycheque, and coupled with a great starting salary a and a change in attitude… [Insert rags to almost debt-free riches story]

So “Fabulously Broke” was a great moniker.

And even though I did say that I would net about $20,000 in 2.5 months and you’ve mentioned that it’s half your salary, you have to understand a couple of things.

Being Broke is not being Poor

Broke is when you ran out of cash but you can still make it work on a tight budget. However, you don’t worry about where your next meal is coming from and you know you can make it out of any financial situation with just a bit of hard work and perseverance.

Poor is when you don’t have anything at all. We’re talking beans out of a can with pork as a delicacy. It’s when you don’t know where your next penny is coming from and you’re trying to make ends meet on your meager income but are always worried about what’s going to happen next.

So I am not Poor, but I AM Broke as of this moment (still have debt to repay, in the neighbourhood of $15,000 and if you keep reading, I’ll explain the entire situation)

It’s just me, myself and I

First, I’m on my own. Which means I own my own company, I’m the sole and only employee and anything that goes wrong, it all lands on me.

Wonky cash flow

Second, I don’t have a fixed or a set salary like others. This means I can’t expect a cheque to arrive in my bank account, happily credited every 2 weeks. I have to learn how to plan and manage my cash flow better.

An Apple a day….

Third, I don’t get covered with healthcare or any other great perks that come with being with a company. I can however, get healthcare for an independent professional, but being young and reasonably healthy, and the fact that I do get subsidized public healthcare in Canada, I’m not too concerned about this (yes, I know, all about taking risks, but I don’t have any dependents right now, so I’m not too concerned).

This means that when I go to a dentist, I pay the full amount – $500 a shot for each time I do a cleaning or a checkup. I pay for all of my medication (partially subsidized by the government), but 90% of it doesn’t get covered by the company.

(Which, by the way, I worked out, and quite frankly, I would’ve been better off NOT being with the company plan because I barely even used $300 worth of expenses in healthcare in a year. I used about $150 last year).

Unemployed at a moment’s notice

Fourth, since I don’t have a fixed paycheque or a fixed salary, this means that I also can be out of a job at a moment’s notice. I work on a project by project basis.

Let’s say, I only worked on this project, and I earned $48,400 (gross). But let\s imagine that I don’t get another project for the rest of the year. I only worked that 2.5 months and earned $48,400, that’s all I get for the entire year. Granted, it’s enough to live on, but it’s a bit of a leap from what I used to earn – $67,000.

It could also be possible that I find projects, but for less than what I’m asking for (50% an hour, at $60 an hour let’s say). This means that I work twice as long – 5 months, and I earn the same amount of what I could earn in 2.5 months, but in 5 months.

It’s still enough to live on (it’s just that I work longer for the same $48,400) but if you tack on top of that, that I work for 5 months but then I can’t find anything else for the rest of the year, I’m hooped in the same position as before – able to survive but not really able to save much without being a total tightwad (not cool.)

Or the other nastier scenario is if it wasn’t for 5 months at $60/hour, but 3 months instead! I’d only earn $28,800!!!!! And the rest of the year, 9 months I’d be unemployed.

I just can’t predict what I’m going to earn going forward, and what I will be able to net later.

With that being said, you probably think I’m a right idiot for picking that low, ripe hanging fruit instead of staying with a company and being ‘secure’.

Here are my thoughts:

Those examples I gave above at $60/month for 3 months, are quite unlikely. Possible, but unlikely given what I know about my skills and the market today.

Even if I stay with a company, I’m not necessarily “secure”. They too, can fire you at a moment’s notice without severance pay or 2 weeks notice. Granted, I’m sure the labour laws here prevent them from just firing me on the spot, but they could’ve literally come up to me and said: “FB, it’s been real. Pack your stuff and go BIATCH!”

The market is so good right now for what I do, that it won’t really be an issue. If I have to, I’ll travel (which the client will pay for) to a project in the middle of Bumpkiss, Nowhere just to make cash to live. I’d do it.

It’s really unprecedented and unusual that I can earn this kind of money per hour because generally, I’d only be able to charge let’s say… $80 an hour. Which (don’t get me wrong) is still fabulous money. But even $80 in a tougher market may have been a hard sell with my experience. I may only be at about $60 in a bad market situation.

Generally, clients want 5+ years experience, so I’m just very lucky that I got into what I did and was able to leave at this time to take advantage.

Another great thing is that I’m able to choose my projects. If I think the commute is too far (like that 2 hour one from before), I can say “No way Jose”. And if it’s not enough money or too short of a contract, I can turn it down as well. And with that, I can take however long of a vacation I want – if I want to backpack across Europe for 5 months, I can.

Lastly, I answer to myself; which is something extremely satisfying and a bit freeing. Sure, I have more to do and less time to do it in, but in the end, my work will be for ME and MY company, not some other shareholder’s pocket who doesn’t do anything and can’t even do my job, but gets to sit back and collects the dividends. Or going to pay a manager who’s truly useless but earns double my salary because she’s older and more senior than I am.

In the end, it’s just me.

And my Plan B at the end of all of this, is that I give it up and join a company again. I don’t like that option, but it’s a real one that’s still open to me.

So what the hell am I gonna do about being “Fabulously Broke”?

In short, I still like the name “Fabulously Broke” and the acronym “FB”. It’s what I’m known by. I already polled a bunch of people before, and asked them what the “B” in “FB” could stand for other than Broke, and the ones I liked (and that other readers came up with):

Fabulously Budgeted in the City
Fabulously Bold in the City
Fabulously Blasé in the City
Fabulously Blunt in the City

But I think I ultimately like Fabulously “Broke” with the quotation points, because I still have a sentimental attachment to that moniker.

And I don’t want to insult your intelligence by saying that I’m Broke, but the risk of being broke once in a while is still an option for me especially with what I’ve chosen (unlikely, but the probability is still there). Plus, I still have $15,000 left to pay on my debt which is no small amount! (Smaller than $53,500 but still..)

Related Posts:

• Job security is a myth for me.
• Anon, your question reeks of skepticism…
• Not to jinx myself here…
• Valid complaint from Anomyous
• "OK I’m asking"

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