How Tough Do You Need To Be To Acquire Wealth?

I have been a student of people for years. Everybody has a model of the world that is unique to them, but there are a couple of common denominators. It reminds me of the Albert Einstein quote, “The most important decision we make is whether we believe we live in a friendly or hostile universe.” So, for a REI: Is wealth easy or hard to acquire? Choose easy when you are familiar with the basic “rules of the game.”

In our digitally saturated age, it takes somebody with an iron will to not be impacted by the environment around us. There is a sense of impending doom, a weight of cultural fissure and confusion. More and more think pieces are bubbling up about the possibility of open societal conflict.

These are not happy thoughts.

This might also cause us to feel that the events we celebrated this week on July 4th are in the very (very) distant past.

But I still believe that, seen in light of the circumstances of our time, the Declaration of Independence was a bit of a miracle. It was an act of incredible bravery by many people who had plenty to lose by adding their names to it.

With all of our flaws as a nation, the notion of a country founded upon principles (however poorly executed, both then and now) was a significant innovation and rightly worth tossing rockets into the air to celebrate and honor.

But as we all know ... "independence" is not something that we can always count on. It must be protected.

And I am not talking about our nation anymore ... I'm talking about YOU.

Janet Behm's
"Real World" Personal Strategy Note
How To Create -- And Keep -- Personal Independence
“Focus on being productive instead of busy.” -Tim Ferriss

Often, as we strive to keep our heads above water in these culturally crazy times, it's easy to lose sight of why we're all working hard each day. What is the goal? What is it we're trying to accomplish by earning wealth? For me -- and for many others -- the answer is cashflow independence.

Now, I would define this as "having an income sufficient for your basic needs and comforts from sources other than paid employment." Independence implies freedom. It's the condition of having saved and invested money so you can do whatever you choose. Whether you elect to keep working doesn't matter -- you have enough saved and invested to follow your dreams.

But is independence (in the monetary sense) just a pipe dream? Is it something only for the lucky and the strong? No, it's a goal that anyone can reach, if they're armed with some basic knowledge and make some smart choices.

As I see it, there are four keys to accumulating wealth:
1. Start investing as early as possible. It takes significantly less money to accomplish what you want, and you have more time working for you.
2. Be determined to save on a regular basis. It is an easy way to accumulate wealth -- especially when it becomes an automated component of your monthly plan.
3. Begin investing with the largest possible sum you can. You will have more money working for you over a longer period of time.
4. Reach for the highest rate of return you believe you can safely receive on your money over time. Each additional percent is important. The higher the rate, the less money it takes to accomplish what you want.

Financial independence is built upon these four guidelines.

What Holds Many People Back
In order to save money, you must fight to keep from spending it. I encourage you to set goals, to prioritize wants. Since money can be spent only once, you need to decide which wants are most important. To do this, it may be helpful to place a value on each of your wants.

So ... here's an exercise for the week: Pull out a piece of paper and list your wants.

These can range from a new house to a hot tub to a trip to London to a new blender for the kitchen. Next to each item, write why you want it. (You might want a hot tub, for example, because it would allow you to relax with family and friends.)

When you've finished, take another piece of paper and re-order the list based on how important each want is to you. If a trip to London tops the list, are you still willing to delay it by spending $40/month for that gym membership you rarely use?

Confront this issue first (keeping in mind those four keys mentioned above), and I'll be back with more thoughts for you next week.

BE THE ROAR not the echo®

To staying free,

Janet Behm