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Why You Need to Stop Living from Paycheck to Paycheck Right Now!

Once upon a time…

Yeah, let me tell you a story.

It was a beautiful sunny day in Philadelphia when three people crossed paths at a car wash. They came from similar backgrounds, but how they perceived their relationship with money led them down different paths in life.

Meet John Pelao

John Pelao, the first character in our story, was a hardworking young man in his mid-20s who worked full-time at the car wash and never seemed to get ahead, despite the occasional overtime hours. His spending habits included purchasing items even before the directly deposited check arrived in his account. When there wasn’t enough money at the end of the month to pay the bills, pay day loans with exorbitant fees came in handy.

parked white coupe during night, living from paycheck to paycheck
Photo by Jan Kopřiva on

Saving for emergencies or investing for the future never occurred to him. He disliked financial topics and preferred to spend his free time watching sports, moving from one sports season to the next. Even though money was tight for John, he managed to splurge on new sneakers when they were released.

He was the first to show off his new smartphone, boasting about how he got it almost for “free.” All he had to do to get his brand-new phone was renew his two-year contract and trade in his old one from a couple of years ago.

Now, let’s look at how John is ruining his finances by upgrading smartphones as soon as their contracts expire. That old smartphone could have gone for $175 on the internet. His “luxurious” 2-year contract with a major wireless provider costs him an extra $50 per month over what I pay monthly with my contract-free provider for the same features. Multiply that by 24 months and add the $175, and he’ll be paying $1,375 for that new smartphone!

pexels-photo-193004.jpeg, living from paycheck to paycheck
Photo by Torsten Dettlaff on

The Pelaos of the world are the ones who would ask on social media which phone they should get next.

What about, none? A better use of that money would be to catch up on retirement savings or to save for an emergency.

John was driving a ten-year-old car. There’s obviously nothing wrong with that. However, this was his “baby,” and he had “invested” a lot of money in bling upgrades like magnesium rims and a stereo system loud enough to wake up the entire neighborhood when he drove away. According to John, his car was worth much more after the upgrades than it was when he purchased it. He definitely needed the smackdown on what an investment should look like.

John didn’t take any government assistance and preferred to blame the government, the wealthy, or any external factor when things went wrong.

John always saw the glass as half-empty—buying stuff was his game.

Meet Raul Gastador

As John began his shift one afternoon, a regular customer, Raul Gastador, arrived to have his car cleaned in time for the weekend.

Raul had a successful career in corporate America. He’d been getting annual raises for the last 20 years, but he’d always complain that his pay was never enough. Nonetheless, he was always on a never-ending journey to the top of the corporate ladder. He believed that if he could just get that next promotion, all of his current financial problems would be resolved.

The problem was that his ballooning lifestyle would rise like unattended bread dough, and in order to keep up, he needed another promotion, another raise. Raul’s student loans have been maturing for fifteen years, much like a fine bottle of wine. Other priorities, such as the mortgage payment on his newly purchased home, as well as other financial obligations, simply seemed to get in the way of repaying his student loans.

Raul looked forward to trading in his car every four years. He’d been eyeing his next wheels just as his loan was nearing the end of its repayment period. Raul didn’t care about the final cost as long as he could get a low-interest car loan with manageable monthly payments.

crop colleagues shaking hands in office, living from paycheck to paycheck
Photo by Sora Shimazaki on

Raul was married, and his hectic schedule left little room for simplicity. He never had enough time in the day to do the things he really enjoyed because his job demanded more. They outsourced the majority of their household duties, including cooking. Eating out was a daily occurrence. Raul thought it was acceptable in the name of success.

He’d keep borrowing for everything as long as he could keep increasing his income. Raul always saw the glass as half full—buying liabilities was his specialty.

While Raul waited for John to finish towel drying his car, the two gentlemen struck up a conversation about sports.

Meet Maria Dinero

Raul and John continued chatting when they noticed a beautiful, classy lady approaching them. John also noticed she’d been in and out of the car wash several times that day. Raul, on the other hand, had never seen her before.

Her name was Maria Dinero. She was driving an eight-year-old Camry that didn’t appear to have come in for service. She had a simple yet elegant style, and John and Raul couldn’t help but notice how her face radiated with happiness.

woman wiping the car with yellow sponge, living from paycheck to paycheck
Photo by on

Maria’s first job, about 15 years ago, was at this car wash, and she seemed to know more about the business than just car washing. She noticed a correlation between money and time early in her life. She realized that spending time doing things she was passionate about was more important than being a slave to a job.

Maria needed passive income from investments to own her time, so she began saving as much as she could from her first year of work onward. During her car wash days, she would save all of her tips in a jar, hoping to one day invest in a business. While working, she attended a community college and earned a business degree so that she could one day manage her own business.

Maria was skilled with money. She never borrowed on credit and also discovered that buying new cars and living a consumer lifestyle based on buying things and liabilities would stifle her freedom and happiness. She could afford a lot of things, but that didn’t mean she would. John and Raul would never have guessed she was the millionaire next door.

a white car parked near a curb, living from paycheck to paycheck
Photo by Dmitry Alexandrovich on

Maria didn’t see the glass as half full or half empty; she saw water and drank it—buying assets was her game… And purchasing assets is what you and I should be doing to break the cycle of living paycheck to paycheck.

Dinero Trumps Pelao and Gastador

Maria introduced herself and joined the discussion. She began by asking the gentlemen about their car wash experiences, both as customers and as employees.

John, intrigued by her curiosity, asked if she was looking for a job at the car wash, but it turned out that she was considering buying this business. She saw an opportunity to diversify her portfolio and keep investing in what she knew.

Maria did not come from a wealthy family. It was her attitude toward money and what she did with it that led her down a different path. She grew wiser and saw opportunities where others saw failure. She learned about investing and running her own businesses.

People in the lower economic class tend to buy things because they believe it will make them happy, whereas the middle class lives a lifestyle fueled by liabilities. The wealthy, on the other hand, buy assets that produce more assets.

We can be jealous and feel that life is unfair because others are happier and have more than we do, or we can learn from their successes and get a piece of the pie. There is much to learn from the wealthy, and Tatiana and I will continue to share what we learn on our journey to financial independence with you so that you can benefit as well.

What is your strategy? Do you want to spend your entire life purchasing goods like Mr. Pelao, liabilities like Mr. Gastador, or assets like Ms. Dinero?


After dedicating 13 years of his career to Vanguard, José retired from the corporate world at the young age of 44. During his tenure at Vanguard, he expertly coordinated the production of both electronic and print educational materials for 401(k) participants. Now, he relishes in his early retirement, cherishing time spent with his family, indulging in his favorite hobbies, seeking out new experiences, and savoring meals in the comfort of his own backyard.

View all posts by José →
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Jana Goodlife
3 years ago

Love the story and the characters! And this is so true “We can either get jealous and feel that it’s unfair that others are happier and have more than we do, or we can learn from their successes and get a piece of the pie.”

Keep sharing guys!

Bladimir Mercedes
9 years ago

Best paycheck is the one you don’t actually need. Great feeling!

9 years ago

Yes, those are great! They can go right into the investment bucket!

9 years ago

Pelao and Gastador! That’s classy XD

9 years ago
Reply to  LM

¡Ese tiguere vive pelao! ¿Por qué sera?

Louis Yeriel Bautista
Louis Yeriel Bautista
9 years ago

Love the names! Excellent article and thanks for sharing your insights with us!

9 years ago

Sure, keep on reading! Thanks.

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