The Journey to Financial Freedom

What can we do to live longer? I wonder about that. I can’t say that I’ve really dedicated any time to really studying this. But I’ve got a few ideas on the subject.

Here’s a question I like to ask people - it’s quite interesting. So here is that question…How old will you be when you die? Now, please don’t be offended. It’s a quick, easy question really. How old do you see yourself getting to? 70? Maybe 64? I want to see at least 100. My grandmother has recently turned 98. How about you?

Now, one of my theories about this is that if we reduce our stress, both total stress and sustained stress - things like horrible traffic stress - we should live longer. There are lots of ways to reduce stress. For example, my wife and I like to avoid traffic now. When possible, we don’t schedule meetings at 9am. By shifting them to 10am, we get to drive on nice, virtually empty roads. Ok, so there might still be some traffic, but you get the point. 40 minutes driving versus 15 minutes. Less fighting over your space on the road; less chance of dings or real accidents. I think that will have a positive effect over time.

We’ve also moved recently to a place that seems like a village. And the amazing thing is, we only live about 5 minutes from our old condo. We had no idea this entire area of town existed until we went out house hunting. Truly amazing. The feeling now as we drive off the main road and back through the tree-lined neighborhood to our little corner of the world is distinctly “peaceful”.

One more idea is this - reduce the monthly built-in cost of your life. Raise the monthly built-in income you have.

I know that this idea can be painful, or almost impossible for some people to think about. Some people do “need” a large BMW, a couple vacations a year or a second house. But if you are able to just give up on the “keep up with the Joneses” mentality, I think you’ll improve your life. I really think it can help you to live longer. And if you spend 10 years stressed out, versus 10 years without that stress. I’d consider that to be a lifestyle improvement. Even if it doesn’t help us to stretch out our lives, it will make the life we do have more enjoyable.

So I have a question for you. Have you read Stephen Covey’s books? I don’t remember which one, exactly, but one of his books tells a simple story about how to fill you life with the right activities. Not getting the right activities in there will mean not getting nearly the results you want in the end - of a month, year, decade or the whole deal.

So if we think about starting at point A, wanting to get to point B, then how does this apply. To keep things simple, let’s call Point B the following: no need to work; savings and automatic income cover expenses - and insurance and other hedges are in place to counteract tragedies.

I would suggest that the first big stone is to increase our assets - our collection of things that have the capacity to make us money. Our education gives us the chance to increase our income from employment - it is an asset. A condo or an office building, if it provides income net of taxes, mortgages, maintenance, vacancy and all other expenses - if the result is a positive cash flow, then it is improving our net worth. With enough improvement, in both raw assets and in monthly cash flow from those assets, we will reach the first plateau of achieving wealth - not having to work in order to maintain our lives indefinitely. The cash flow we have will handle the bills and outflow, and we no longer have to work for money.

Now, this is one of the big stones. I’ll leave to the side other big ones like family and contribution to the world for now. I’m not suggesting that you should leave them out for a period of time - doing that tends to eliminate your family, and eventual financial achievement cannot take the place of a family you have lost due to neglect. We need balance.

What is this ‘big stones’ idea? Well, here is a paraphrasing of the story Stephen Covey shared. If you take a large canning jar and you fill it with the normal things that take up our lives – sand, a few pebbles, drizzle in some oil and then poor in water – you’ll be amazed how much water you can still get in the jar after the other things have gone in. But when you’re done, you’d still have these big stones – the truly important things in life – sitting there lonely on the table.

Do the same thing again, but put the big stones in first. Now add the pebbles. Pour in the sand. Add water. Wow! Putting the big stones in first doesn’t really eliminate much of the other things – they still fit somehow. And YOU GOT THE BIG STONES in there!! That’s the message – put the important things in first. The other details will fit. In 10 years, it’s the big stones that will matter. Get them in there!

So from whatever situation we are in, we need to move towards having the assets and cash flow so that our “ability to pay bills without collecting another paycheck” grows from x months to 6 months, 11 months, 32 months, and eventually INFININTE months.

Keeping this simple, then, we want to find ways to eliminate our large leakages of money. On the other hand, we want to identify those activities that will lead to having those assets that will provide cashflow for our financially free life. There is a lesson I learned back in college while selling books door-to-door for three summers. At first I would arrive in an area and simply look at the houses. From the way the houses looked, I would try to judge the people and their financial situation.

It took a while. But eventually I came to this conclusion: There are people with beautiful cars, beautiful houses, amazing vacations and golf club memberships who are dirt poor. They are living on “financial red line” and everything is just ready to explode in their faces. Although they make good money, it is ALL being spent. It doesn’t matter what it’s spent on - it just is gone. Nothing is left. And this continues month after month.

But then you do hear the stories about little old ladies who never had much, but they ALWAYS saved something. And at some point she started to invest. And she got better at it. Yeah, it might have taken that person 50 years. But at the end of the 50 years, they have 2.79 million dollars of IBM stock and 13 apartment buildings.

The difference in these two is that one feels compelled by social status and other pressures inside themselves so they spend and spend and spend. The other one does without just a bit, and continues to do that. Over time, she’s able to acquire something that helps her progress faster than simply saving will allow. At some point she’s got an apartment building, and things start to progress faster. Maybe it took her 20 years to get the first apartment building. No matter - she is not concerned with what she’s missed out on. She’s concerned with the outcome and with assuring a good future for herself. And she plods on.

So back to us. The lesson I’d suggest from the little old lady that we should apply is this: Do we really need that shiny new car? Do we need the shiny new car with the fancy hole in the roof, the upgraded rims, the 12-speaker stereo? There are ways to save serious chunks of cash by not having some of the upgrades; by acquiring a pre-loved model, etc. Do we really need to take a vacation in France? Could a more local car and hotel vacation be sufficient, and save us perhaps $3000 - or $12,525 over a 2-week period? If we cook steak at home, could we save $250 over going out to a restaurant?

I’m not talking about the “clip coupons and go to the car wash on Tuesdays for their 15% off morning deal”. You can do those things, too. What I’m talking about is learning about our approach to those things that have a big impact on our money. I’m talking about a choice of a $1720 or a $2720 mortgage; a $298 or a $982 or a $1415 car payment; an extra $27,500 club membership - which adds a monthly burden of a couple hundred dollars. Once in a while, just “needing a break” can put a big $8000 dent in our credit cards.

If you look back on the last 5 or 10 years, where does the money go to? The big money. And when have you been able to say no to some nicer, bigger, shinier gizmo and still feel good? At the end of the day, our money comes and goes based more on emotion than most of us realize. When we decide to buy a new vehicle, often we think more about the sunny day driving with friends or family and all those great things that will be possible with the vehicle. We really don’t want to be bogged down realizing that we’re adding a payment that will be with us every month for the next 3, 5 or 7 years. That’s not pleasant. Change channels - back to that sunny day, and the winding road - is that the ocean? Ah…mmm…sea gulls, the beach…

An idea that I’ve heard quite often lately is that, “thoughts become things”. This phrase is present in the DVD “The Secret”. It is part of the discussion in the classic, “Think and Grow Rich”. It’s an idea that I used to fight. Now I go with the flow on this one, and I find myself discussing this with others.

In a recent discussion, someone mentioned that they simply wanted to break clean, and start to act in a new way. He wanted to look at time differently, and seemingly just wanted to start in that moment. I don’t think things work quite like that. We’ve all got habits, and habits have strong momentum. Breaking out of a habit is tough. Habits work and propel us to certain actions without the need for thinking; they are automatic. Thought habits are the same way.

If we’ve spent years thinking about reducing debts, it’s hard to look at our financial situation differently. We might become convinced that “enhancing our net worth” is a much better thing to focus on and saturate our mind with, as compared to being obsessed with getting out of debt. The Secret suggests that the brain can’t really process a complex idea like “get out of” debt - it just ends up with the debt part of the idea. Debt. Debt. Debt. The word will echo around, rattle around and just inhabit the brain.

If we’re going to have an idea bouncing around in there, rattling things around, why not have it be something we want? That way, if you do get in a conversation with someone, what are you likely to ask? “Say, do you have any ideas how to reduce debt?” Or, “Chris, what do you know about improving net worth?” I’ll make the bold statement that you’ll have two totally different conversations based on these leading remarks!

And can you see how the thought habits you have will tend to move your words closer to one or the other of those two remarks?

This same type of “thought gravity” affects the way we think and talk and act and relate to the world in other parts of our lives as well. Here’s an interesting exercise. Take a few minutes and write down some ideas about some of the wealthy people you know of. Are they kind or cruel? Stingy and self-centered or generous and contributing to the world? Did they gain their wealth honestly, or is there a bit more than a little conniving and fast footwork behind their accumulation of money?

Now, take a look at what these ideas say about how you really feel about wealthy people. Does it paint a picture that you want others to associate YOU with? Do you want to become one of those people?

If the answer is no, then you may never get to the point of being wealthy! Your subconscious mind wants to protect your from harm, pain and bad things. If your subconscious mind understands that wealthy people are bad (because you’ve spent years practicing that type of thinking), then your subconscious may well “protect you” from being wealthy. Let’s say you did amass a few million dollars, and you started to think about the amazing things you could do by starting a foundation. There’s a real possibility that before you’d have time to fund that foundation, that your mind would “rescue” from the bad situation you are in, and cause you to lose all that “bad” money.

We have to be able to paint a picture in our mind of where we want to go. And then the hard part - we have to be able to see OURSELVES standing IN the picture, living there as part of the world that created the picture, and as a true part of it. If we can’t seem to imagine ourselves doing or being a certain thing in our mind, there may always be a distance between us and that goal we have for ourselves. We may never arrive at the goal.

So reflect once in a while on how you react to the things that happen. Are there patterns? If you had a choice, would you change some of those patterns?

Now - make a choice.

We are all on a journey. Where we are going may not be certain. But, let me encourage you to make sure you enjoy your trip!

With all the possibilities in life, there is one that I hope to encourage everyone to take advantage of. Have you noticed that a lot of our experience in life is up to our own choice? What I mean is - two people can experience something similar. Maybe they arrive late for work. Maybe they have a car accident. Maybe they get some really good news about their investments. But what the fact is can very easily be overpowered by the person’s reaction to the event. And it is amazing how much power we humans have to take a perfectly fine event, and make it into something much less pleasant in our minds. Now - along with that power is the opposite one - the power to not get upset at the events in life.

There are many ways to say it, but we can stay calm and even happy even when arguably unpleasant things happen. This is a great skill to develop! Can you recall any recent event that “sent you for a loop” and disrupted your day? How long did that event effect you? Certain events, if they shake our confidence or make enough of an impression on us, may have an impact on us for weeks, months or years to come.

Have you started to overcome this sort of thing? It’s a part of our human journey. I like to describe this in the following way.

Imagine you are driving a large truck, a heavy diesel truck. Let’s say you’ve turned into an alley and a ways into the alley you realize that a car up ahead has broken down. You slow to a stop. Glancing in your mirrors, you see that there are already a couple vehicles behind you. Now, what can you do?

Imagine another situation. Say you are in a kayak in a fast-moving stream. A river, really, since it is quite wide. As you flow along, you see a large boulder up ahead. Somehow you get caught up on this boulder, and you grab hold. Now, what do you do?

We do have choices. It’s those times that we decide that we don’t that we get in trouble. Not feeling that we have choices is a poisonous habit to develop. If you’re in that river in that kayak - it is possible that your fear of the trip will have you clinging to that same rock weeks later. But if you have the courage to do so, there is a fast-moving river all around you that will carry you along. You just need to let go of the rock - that might be so comforting and comfortable a companion in the moment.

So what’s my point? Pretty simple - stop once in a while and review your habits of thought. Do you get stuck? Are things gloomy? Or do you generally see your days as manageable, exciting and full of possibility? If someone else were in your place, could they take a more positive outlook on the situation?

Maybe there is someone you admire for how they continually look upon events in an empowering manner. And maybe you could be just a bit more like them if you made an effort. Maybe you can spend more time with them and just soak in their attitude and approach to life.

Enjoying the journey is important. What’s the point of arriving at a place of happiness after years of toil? Reject that, and get out and live life today, tomorrow and every day. Your requirements for achieving financial freedom may shrink as you develop this skill.

At the end of the day (or of this life), how many pounds of happiness will you have enjoyed? Enjoying is so much better than enduring.