Our parents and teachers train us to be good employees. Unfortunately, this mindset leads to terrible interactions with money.
The first step to getting out of debt is understanding the language of money and then learning how we should spend it.
The root cause of debt. We live in a consumption-based, spend-first society. However, that is not the root of our problems with debt.
Happy Cash Flow Retirement 8
What’s the most valuable resource in your life today—time or money? As they trained us to be employees, our parents and teachers made money our top priority.
Once we had our marching orders, we joined the workforce and proceeded to get into debt. We sold our future time to get what we wanted today.
Robert Kiyosaki understands the struggle. I see a lot of Robert Kiyosaki bashing on the internet; however, I think he is one of the greatest minds alive.
“The rich do not work for money” is perhaps the most powerful sentence written. Most people will never understand the complexity of this statement.
What is Generational Wealth?
Money is an exchange of value; we must use money to buy back our time. Once we understand this concept, we can build a strong relationship with money.
The myth of budgeting. Robert Kioysaki’s Rich Dad was adamant that the kids did not work for money. He made them work for free. This scenario forced young Robert to create value by opening a comic book exhibit in the basement.
Why did Rich Dad force them to work for free? Because as soon as you work for money, it is extremely tough to stop.
They taught us to budget with our entire paycheck. If we earned $10,000/month, our budget started with $10,000. We set aside $1,000 for savings, investments, and charity and spent $9,000.
At $1,000 per month, it would take us 83 years (using simple math) to save $1 million. This is why Rich Dad prevented his kids from getting on the hamper wheel.
The 40-Year Interest-Only Mortgage
The real budget. If you earn $10,000, you should save and invest at least $5,000 per month. Impossible?
It sure is—if you think like an employee. However, once you open your mind and heart, you can create a path to saving $5,000 monthly.
The more people you serve, the richer you become. That’s why we are in so much debt; we only serve ourselves.
Debt is a by-product of living independent lives while serving no one. Working to earn a paycheck does not add value to the world.
Saving for a House Down Payment #2: Single Person, Big City
Yes, our jobs may add some value, but very little. There is too much red tape and wasted time for it to be an effective machine.
We go to work to serve ourselves. We push aside our creative brains, collect our paychecks, and spend money to numb the pain. We get into debt.
Building a relationship with money. I calculated my dividends in my Wells Fargo brokerage account yesterday, totaling $330 for the month. I have eight more brokerage accounts that pay me dividends.
I was fascinated by the number of dividends and the power of compounding. However, I was more impressed that I didn’t need the money, nor did I want to buy anything frivolous.
Rewind the clock to March 2019, and I was struggling with debt. I didn’t have a $1,000 emergency fund, although I earned over $100,000 per year.
You Can’t Get Rich By Acting Rich
What changed over the last four years? I improved my relationship with money by valuing my time. In fact, the most important image I have in my head is time with my grandkids.
I bought my freedom from debt and the workforce. No, I don’t have grandkids yet—my boys are 16 and 12.
However, I never want anyone to tell me how to spend “my” time with my kids or grandkids. My wife had to quit her job in 2019 so we could spend three weeks with her family in Turkey.
These events shape who we are, so we best learn from them. Rich Dad valued his kid’s time more than they did at the moment. He knew they would sacrifice much of their time by entering the workforce as an employee.
Since 2019, I have been on a mission to free myself and my family from indentured servitude. As soon as you value time over money, everything will start to fall in line.
The magic of helping others. If you open your home to a roommate or Airbnb, you serve others. You serve others if you open a consulting business in your area of expertise.
Bonds-4-Life: I’m Buying 30-Year Bonds Over 4%
You can serve by starting a community farm, walking dogs in the neighborhood, babysitting for your friends, or creating a running club.
If we only focus on our salary or getting a promotion, we will remain in debt. The workplace is getting worse by the minute, so time is of the essence.
The best way to understand money. Have you ever heard the phrase, “Pay yourself first?” Does that mean putting your cash in a savings account on payday?
It means that, but there is more. We should not be spending earned income (from our job) but instead, passive income (from our investments).
Turkey vs. Turnkey 2
When we receive our paychecks, a massive chunk must go into our favorite asset classes (real estate, dividends, royalties, business).
Once these investments pay us, THEN we can spend that money. Why do we need to run our money through the “investment filter?”
Eventually, you will have enough money from your investments that you will no longer need to work. You will have bought your freedom.
Roth IRAs vs. HSAs
Conclusion. Will it be easy to buy your freedom? No, the world does not want you to be free. They want you to spend on nice cars, houses, and vacations.
You can have all these things in time, but first, we must get free. Once free, concentrate on adding value to the world by continuing to build your empire.
Pumpkin Spice & Royalties 2
All good things come to those who wait. Your relationship with money is actually about time. If you are in debt, there is a problem in your life you must fix. Most of the time, it is financial education.
Make no mistake; even with education, it will be challenging to overcome our lifestyles. My wife and I had to grind hardcore for about four years to achieve financial freedom.
Was it worth it to retire at ages 42 and 39? Of course. Time with family became our number one priority. What is your number one priority, and what will you do to buy your freedom? Good Luck!
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