Financial Freedom

You’re 1-Click Away from Financial Freedom

American evangelist Billy Graham was quoted as saying, “Give me five minutes with a person’s checkbook, and I will tell you where their heart is.”

Apparently, my heart is at Amazon. I relish the convenience of online shopping, especially around the holidays when the stores are crowded, or in the winter when the outside temperatures are frigid, or any time, really, because it’s faster and easier to “Buy now with 1-Click®” and have something delivered to my door the next day (or the same day, if I’m lucky).

Anyone who knows me knows that I love efficiency, and what’s more efficient than the single click of a button to buy most anything I want?

The dark side of efficiency.

Unfortunately, just as it requires little work or effort to buy items with 1-Click, it requires little thought into the purchase as well.

See something you want. Click. It’s yours!

Once upon a time, you had to actually get up from the sofa, go get your credit card (unless you had the number memorized, of course), manually type in the number, expiration date and security code – and then do it again, because you mistyped something.

Oh, the effort and tediousness of it!

On more than one occasion after mistyping a number, or occasionally even before getting off the sofa to retrieve my credit card, I thought about what I was buying and decided the effort wasn’t worth it. It’s not that I’m lazy; it’s just that the time required to make the purchase often allowed me time to consider if the purchase was something I truly wanted or needed.

With Paypal, Apple Pay, and 1-Click shopping, you have approximately 1.3 seconds to consider how much you want or need whatever shows up in your Facebook feed or the insidious ads that pepper your online experience.

Everything from small, insignificant, and inexpensive items to extravagant, time- and budget-consuming vacations can be yours with one click. This convenience sets the stage for a complete lack of awareness around your spending that doesn’t register until your credit card statement arrives.

How often have you looked at the amount due on your statement and wondered how on earth it got that high?

Lack of awareness around spending is a major cause of stress related to your money.

Sometimes the stress comes from a higher-than-anticipated credit card balance.

Sometimes it’s the recognition that a purchase was frivolous or didn’t deliver the satisfaction from you sought from it.

Other times, it’s the realization that those mindlessly easy purchases are keeping you from your financial goals such as reducing your overall debt or creating an emergency fund so you can weather the financial storms that invariably come.

And sometimes it’s the realization that the cumulative effect of those efficient little purchases is preventing you from achieving your bigger goals in life like changing jobs, starting your own business, or investing in assets that will generate passive income (the key to true financial freedom).

One click that can help you.

If you’d like to develop strategies to be more intentional with your spending, so you can reduce stress, have peace of mind around your money, and move confidently toward your goals, click here to schedule your complimentary discovery session.

How to Stop Lying About Money

Life is full of defining moments. Sometimes the moments are in difficult-to-endure experiences, like an illness that forces you to reevaluate choices related to your lifestyle, or a job loss that forces you to redefine your career path or standard of living.

Other times, the moments occur in a flash, from something you read online or a simple statement from a casual acquaintance that causes you to reexamine your beliefs and do an about-face.

It is said that when the student is ready, the teacher appears.

I once said to my business coach that money, in and of itself, is not important to me, and that I’ve never been motivated to make money for the sake of making money.

 He replied, “Sure. And gas isn’t important to me…unless I want to get in my car and go somewhere.”

He explained that while my attitude toward money may seem commendable (after all, isn’t the love of money the root of all evil?), it’s completely disrespectful and is likely undermining everything I’m trying to accomplish personally and professionally.

That was a defining moment for me.

As soon as he said it, I knew it was true. My disrespectful attitude toward money had contributed to a cycle of making lots of money and then feeling completely insecure about my financial future. Wash, rinse, repeat.

Since then, I’ve paid close attention to commonly accepted lies we like to tell about money.

How many of these do you tell?

Lie #1: Money’s not important.

The last time I checked, money is still the medium of exchange for just about everything you want to do, have, and experience in life, no matter how simple or extravagant. To say it’s not important is naïve and stupid – and I say this with all the lovingkindness of someone who used to believe it.

Is air important? Is food important? Of course they are! They’re vital to your existence, as is money. Yet somehow you’ve been conditioned to believe that money is inherently bad, and that pursuing or attempting to accumulate it somehow makes you a bad person. 

The next time you’re tempted to say money’s not important, hold your breath. You’ll avoid wasting it on a lie, and you’ll be reminded that, just like the air you take in when you can no longer hold your breath, money is necessary and therefore important.

Lie #2: Your net worth is an indication of your wealth.

One of the first things I learned to do as a financial planner was prepare a net worth statement for clients. Net worth is determined by subtracting everything you owe (your liabilities) from everything you own (your assets) to arrive at a (dollar amount) number known as your net worth. We use this number to grade your financial health, and the goal is to see it increase over time.

The problem with using your net worth as a measure of your financial health is that it has nothing to do with your financial freedom.

Financial freedom, or financial independence, is achieved when you have enough income to pay your living expenses for the rest of your life without having to be employed or dependent on others. 

Notice that financial freedom is achieved with income, so unless the assets on your net worth statement are the kind that produce income, they’re irrelevant to your financial freedom.

In other words, the house you own – regardless of how much it’s worth or whether or not you owe money on it – doesn’t contribute to your financial freedom unless you plan to charge admission for people to see it, rent out rooms in it, or sell it and invest in something that produces income.

Instead of simply accumulating assets to increase your net worth, start accumulating assets that produce income, such as a business or income-producing investments or real estate. And use your income statement rather than your net worth statement to measure your wealth.

Lie #3: Little expenses and expenditures don’t matter.

A client of mine who was financially independent despite never earning more than $35,000 a year from her job as a schoolteacher told me one of the secrets to her financial success:

“Beware of mosquitos. They suck more blood than vampires.”

Having lived in south Florida for 17 years, I know a thing or two about mosquitos. They’re everywhere, and seemingly always hungry – particularly for my blood. Strangely, I’ve never a encountered a vampire, despite their numerous appearances in movies and television shows.

That was her point.

As intelligent adults, we’re on the lookout for big financial pitfalls, and if we’re diligent, we avoid them. Unfortunately, we spend hundreds or even thousands of dollars every year on little things that prevent us from achieving financial freedom and peace of mind. And we do it $1, $5, and $10 at a time.

You’re probably aware of the latte factor described in David Bach’s book Smart Women Finish Rich. It illustrates the detrimental impact on your financial health of that innocuous $5 specialty coffee and shows how much money you can accumulate by redirecting that $5 (x however many times a week you indulge) into an income-producing investment that compounds over time.

The truth is, the more you spend on little purchases (like the $5 lunch because you didn’t feel like packing, or the $10/month gym membership you don’t actually use) the less you have to invest in assets that produce income. The fewer income-producing assets you have, the less financial freedom you have.

The truth will set you free.

Do yourself a favor and examine the lies you tell yourself (and others) about money. 

And beware of one of the most insidious lies you can tell, which is that you don’t need professional help with your money. Even professionals trained in financial services should seek outside help with their money. Why?

Money is an emotionally-charged subject.

The most intelligent and logical among you will have difficulty consistently following your rational mind (which likes long-term payoffs) instead of your emotional mind (which prefers instant gratification). 

Find a professional to hold you accountable as you as you discover and implement the truths that that will set you (financially) free. 

If you want me to be your accountability partner, click here so we can meet.