Manage Your Money

The Four Cardinal Sins of Finance

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What’s the worst financial decision you’ve made?
The Financial Independence journey is a spectrum and everyone falls somewhere on that spectrum, even if they don’t know about financial independence, or aren’t actively pursuing it. With that in mind, there no choices or mistakes that can not be undone with time, focus, money, or some combination of the three. We’ve made some mistakes of our own, and even a couple that are listed below. However, if you want to achieve FI or give yourself as much of a buffer of passive income, emergency fund, or even a mortgage free house as you can, you will do well to avoid making any of these decisions below.

The Cardinal Sins of FI:

Food Waste

There’s a reason that this one is the first one on our list. We feel that food waste isn’t only a FI cardinal sin, but also a life one. The money, time, effort, and natural resources that went into getting that food in the store alone is an amazing and amazingly wasteful feat of the global economy. There is enormous waste on every step in the supply line from the farmer to the consumer. However, by purchasing that item, you’ve passed the responsibility from the harvester, farmer, food company, and grocery corporation onto yourself. They’ve made enough profit on the product that actually sells to subsidize all the waste along the way. You have paid for that waste at this point.
Alarmingly, 40-50% of food waste happens at the consumer level. Anywhere from 1/5 to 1/3 of food purchased at the grocery store is thrown away. Over preparing, food spoilage, overbuying, incorrectly reading ‘Best By’ labels, and poor planning are contributors to this issue. Imagine walking out of the store with three bags of groceries, and dropping one in the parking lot before you get to your car, and just leaving it there. That’s essentially what’s happening.


FOMO (fear of missing out), jealousy, envy, etc. can be very expensive. It can cause you to buy more _______ than you can afford. Cars, houses, phones, clothes, ‘experiences’, *insert other vices here*. This is a very slippery slope, and one that I have personally found myself on more than I care to admit. Many years ago, I drove a Mitsubishi Eclipse that was less than reliable. Tired of dealing with it, I saved up $5k, which was an unheard of amount of money to me at that point in my life, and went to a used car dealership to buy a $12k Mazda RX8.
I put the $5k down and assured the guy that I would get financing and buy the car. My local credit union deemed me unworthy of a $7k loan (damn that’s sad), and the used car dealer had already used my $5k to procure another car (red flag), so he pointed us in the direction of some sketchy loan place. I got the loan for $7k and paid 23%!!!! interest on the loan like a damn fool. I could’ve found a reasonable used car for under $5k and had cash left over, but instead, I let appearances dictate my choices. I wanted to appear rich, well off, cool, whatever, and was willing to pay a premium for other people to see me that way.
The social media lifestyle has only compounded this issue, not for myself anymore, but for others. People are comparing their everyday life to the highlights of others, and feeling inadequate as a result. You follow hundreds of people on social media and every week someone is on some lavish vacation, getting a new car, out at some fancy restaurant, leading what seems like the perfect life. You don’t see the other 499 people leading a regular ass life 95% of the time, you are seeing the 5% of their life that they want you to see. Don’t let envy, jealousy, or FOMO influence bad financial decisions that can set you back for years, or your entire life, if you don’t learn how to control your emotions.


This may touch a nerve with some people but, exploiting your personal relationships with people to sell energy drinks, supplements, makeup, leggings, and essential oils is an asshole move. What’s that saying? If the shoe fits…. Anyway, some guy did a study of 400 MLM companies and found that 99.7% of people will lose money by participating in an MLM. So, not only are you an asshole for pushing products at the expense of others, but you’re losing money because you’re pushing products at the expense of others.

  1. Alienating people and losing friends. √
  2. Losing money while doing so. √
  3. Wasting hours and hours of time to lose money. √

A good rule of thumb that we use to gauge whether something is an MLM or pyramid scheme is: if you have to purchase something to get started with the company, you are not an employee, or a ‘parter’, you are the customer. Also, the turnover on these things is astronomical. Anytime someone from high school, that hasn’t talked to us in years, messages one of us on Facebook, we begin preparing for the pitch. Inevitably, it comes, we politely turn them down (Emily is much more polite than I am), and a few months later they’re pushing a different company. Don’t be this person. Don’t get involved. We are all for side-hustles, but find a legitimate one that doesn’t make you exploit your personal relationships just to lose money.


We’ve talked at length about the lottery here. But, gambling in general deserves a second mention. We understand that some people use it for entertainment, but there are plenty of ways to entertain yourself without having to lose money, or lose as much money as you can gambling. Everyone wants to see themselves as the exception. Everyone thinks they’re special, and they are going to beat all the odds. spoiler alert: You aren’t. All the casinos in the world are filled with people just like you, thinking they’re going to beat the odds and make thousands or millions. And all these people end up paying for the giant building, the free drinks, the 24/7 electricity bill, and the occasional payout to someone else.
The jackpot payout that one person may receive pays for itself ten-fold when their family, friends, co-workers, and acquaintances hear about the incredible stroke of luck they were on the benefitting end of. Now all these people know someone actually won, and head in themselves to make their fortunes, only to lose hundreds, and sometimes thousands. In 2017, the casino gambling industry made $76.6 billion in revenue in the US alone. Another way to look at that is, Americans lost $76.6 billion last year in casinos.
We went down to Bilouxi, MS for the weekend for my and my twin’s birthday. She was working an event, so Emily and I hung out with my brother-in-law. It was the first time Emily and I had been to a real casino, and the most notable thing was the cigarette smoke. I’m pretty positive some of these people on the slots had stake in Marlboro the way they were lighting these damn things up. Seems like gambling wasn’t even their worst decision that day, because smoking takes the cake on that. We agreed that we wouldn’t miss anything if we never went to another casino.


There you have it, our cardinal sins of finance and financial independence. Avoiding these things will put you so far ahead of the typical person financially, and will clear up headspace for yourself. Eliminating food waste, FOMO, MLM’s and gambling from your life will not only benefit yourself, but also those around you. Again, no choice or mistake is final, and anyone can pull themselves out of any hole they may have dug themselves into. But, if you can avoid picking up the shovel, you’ll find yourself in a much better place.


  • esoterica

    This is such great advice! The food waste is such a big one, and one that I once struggled with. I used to subscribe to a CSA box though our local farmer’s market, but realized that the kohlrabi, turnips and other bizarre veggies often went to waste. Now, I buy the same things every week and in the same quantity–I know what we like, how much we’ll eat and how long each variety of produce will last. The best advice when it comes to food: plan, plan, plan! Our monthly food bill is under $300 for two adults eating 100% organic and, more importantly, we hardly ever throw food out!

    • James @ Rethink the Rat Race

      Thanks for the positive feedback! Obscure foods usually aren’t staples of anyone’s diets, so loading up on them isn’t prudent. Planning is a great suggestion. It’s amazing to me how many people refuse to eat leftovers. Tons of food waste just on that alone.

  • millionairedojo

    My wife and I are guilty of the food waste for sure! Need to get more disciplined.
    It’s amazing how people value their relationships so little with the MLM. They haven’t talked to you in years and strike up a conversation, then after 30 minutes of back and forth they finally hit you with “hey, would you like to buy this product? It’s the best thing that’s ever existed in the history of ever!” … So messed up

    • James @ Rethink the Rat Race

      Thanks for sharing, Dojo! Most people waste tons of food, but by just reducing the waste, you can save yourself a significant amount of your grocery bill and feel good about helping the planet.
      The MLM scheme is pretty much a playbook of pitching to friends and utilizing your social circle to reach your goals. If you are providing a product or service that people genuinely like, they will seek you out, not the other way around.

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