Analogy of a Frog and Personal Finance

Analogy of a Frog and Personal Finance
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If you were to pick a frog and place it in shallow boiling water, the frog would immediately jump out of the pot and hop to safety. However, if you were to pick up the same frog a little later and then put it in cold, shallow water, the frog would not interact with it and would sit comfortably there since it is a cold-blooded animal. But, if you are going to do experiments by heating the cold pot on a very slow fire with the frog still sitting in it. The water will eventually rise to 100 degrees. Like any cold-blooded animal, a frog’s body will adapt to high heat and will adjust its blood temperature to the environment. Eventually, when the water reaches its boiling point, the frog will die as a result of adapting itself to the environment without realizing it.

So, what does personal finance have to do with the frog story? People who start their careers just like a frog start out in cold, shallow water. The money they got by the end of the month is enough to get them because their requirements for life are low. But, as your career and salary increase, so do your desires and lifestyles. When you start buying your first car, buying your first home, and starting to use credit cards, your lifestyle will gradually change but not as quickly as your salary will increase. As with the frog, you won’t notice that you have a debt problem because the increase isn’t all that sudden. And when you realize that, it will be too late and you will end up with a huge pile of debt.

There are many paths ahead of us to achieve financial freedom, but the majority of us choose the path of job security. How do we blame them? The education system was shaped to produce workers, not entrepreneurs. Many people have realized that as the company they work with begins to thrive, the owner of the business is the one who benefits in the end, and the employees are usually not much richer compared to the first day they started working there. The fact is that the manager is not responsible for making you rich, but his responsibility is only to make sure that you get your salary by the end of the month. It is your responsibility to make sure you get rich, not someone else.

Source by Razamith Sovereign

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