The Dangers of a Formula Based Life

June 13, 2012

Formula Based Life

A formula-based life is something that most of us live to some degree.  Basically, important actions and decisions are guided by a specific formula that’s expected to produce specific results.

A Familiar Formula

For example, one common formula many of us have or will follow has to do with our career.  The formula says – Get a degree so you can get a good job.  Then if you work hard and do your best you’ll be rewarded with a stable job with pay raises and promotions.  So put simply Degree + Hard Work = Steady & Increasing Paychecks.

I’ll be the first to say that in many ways I’m a formula kind of guy.  I like consistency and efficiency and I appreciate all of the positive things that a formula can bring to a process like finding a good job.  Without formulas life would be more chaotic and probably less productive.

However, there are two dangers to a formula-based life that you should be aware of.

Danger #1 

The first danger is you might follow a formula but down the road discover that you don’t actually want the expected result.  Sticking with the earlier career example, let’s say you follow the formula of getting a degree and working really hard but end up in a high stress/high paying job and realize you’re miserable.

I’ve known several people who invested years of their life and large amounts of money to get specialized degrees in medicine or law.  Then they started working insane hours and making insane amounts of money but they had zero work/life balance and discovered they didn’t love the work enough to sacrifice all their personal time for their job.  (Does this guy look happy to you?)

Formula Based Life

So they followed the formula, got the result, then realized they didn’t want it.  Where it gets tricky is that sometimes the formula you follow includes steps that make it hard to reverse course. 

For example, let’s say you took out enormous student loans to pay for law school or for a medical degree. Even if you decide you don’t want to be in that profession any longer, it’s tough to walk away from a well-paying job when you have huge student loans to pay down.

These days debt plays some role in many formulas. If something like a business loan, home loan, or student loan is part of a plan that you’re considering, carefully consider how much you’ll owe and what kind of restrictions this will put on your future.

Danger #2 

The second thing to be aware of in a formula-based life is that you don’t always get the end results that the formula is supposed to deliver.  

Back to the career example, you could work insane hours and dedicate your life to your job and then get passed over for a promotion that you deserve.

Not Promoted

You feel like you did everything right (you followed the formula) but you still came up short. Running into a scenario like this can be hard to avoid because there are obviously things in life that are out of our control.  You could look at them as variables in the formula that offset or redirect all of your efforts.

So for any formula you decide to follow, it’s smart to protect yourself from the variations by not putting all your eggs in one basket.  If you hedge your bets and diversify then everything won’t be riding on those expected results.

In the career world this might mean mastering a complementary skill that you don’t need for your job but is related and opens other career paths.  Or it could simply mean keeping your resume up to date, staying up on your industry, and maintaining an open dialog with recruiters in your field.

Formula-Based Life Case Studies

The reason I started writing about this topic is because a blogging buddy of mine, Adam Baker, is working on a project to give us all more insight into a formula-based life and potential alternatives.

He and 4 other guys traveled around the US and interviewed more than 60 people about this topic – they’re compiling all these case studies into a full length movie called “I’m Fine Thanks”.  I’ve made some suggestions above about how to approach the dangers of a formula-based life but Adam’s movie will go into a lot more detail. 

I haven’t seen the whole movie since it’s still in the editing phase but after watching the trailer, I became a backer of the film.  His team has taken an interesting approach to funding the movie, they’re using a tool called Kickstarter that lets you contribute money to support the film, as little as $1 per person.

As you can see below, I became a supporter but you don’t have to give as much as I did in order to see the movie when it’s released next month.  For only $5 you’ll be able to download the movie after it’s July release. 

Formula Based Life

Even if you’re not interested in supporting the project I’d suggest just watching the trailer to see the kind of topics they’re delving into and see how they relate to a formula-based life.

Like I said in the beginning, I know I’ve followed many common formulas in personal finance and other areas of life. I’m not suggesting that you should ignore these time-tested sets of steps, only that you be aware of the potential implications of the actions and ways you can hedge your bets.

Do you have any personal examples of formulas you’ve followed that didn’t turn out the way you’d hoped? If so, please share them in the comments below.


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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2 Responses to The Dangers of a Formula Based Life

  • Kevin Mzansi

    Good points. Danger #1 reminds me of the adage of having a ladder standing against the wrong tree…

  • Shannon-ReadyForZero

    I know following a formula based life kept me from learning how to roll with the punches after college. Throughout all of my school years, I did everything I could to earn perfect grades and as many academic awards as I could, thinking it would land me a great job upon graduation (even though I was an English major). Of course, I faced a rude awakening after graduation. I was living in a small city that just didn’t have enough writing jobs for the large amount of English and journalism majors who graduated each year. I became depressed instead of finding creative ways to promote myself as a writer. It wasn’t until years later when I threw all caution to the wind and moved to a bigger city that I learned that a formula can help you prepare, but after that you have to be flexible and think outside of the box in order to live the life you really want.