Financial Freedom

If you read any number of books available today on acquiring riches, you will find one great truth. Wealthy people have a different mindset over poor people.

I call this having a rich or poor mentality. Here are some examples:

Rich people invest in books and education that helps them get richer. Poor people invest in large televisions to be entertained.

Rich people look at the long term picture, like farmers, they know you have to invest or plant seeds, water and tend the investment to get a large reward at the end of the season. Poor people say they can not afford to buy the seed to plant.

Rich people know that sometimes crops fail; the rain fails to come, storms rage, they plan for these problems because they know that if you plant and nurture the right seed at the right time you will harvest a bounty over the long haul. Poor people give up after the first set back and claim that life is not fair.

Rich people invest in things that make greater wealth. Poor people buy depreciating assets that make them feel good today.

Rich people know that wealth is not the number of zeros in your bank account, but the freedom to do what they love without hesitation. Poor people only worry about money and become slaves to it—either chasing it because they think they do not have enough or continuing to pursue it after they have more than they could ever spend.

The reason you are reading this book is to become rich. My definition of rich is to have freedom--the freedom to do what you want, when you want to. To not have to ask for time off of work to watch your daughter’s dance recital or to coach your son’s little league team. Your definition of freedom may differ slightly from mine, but personal freedom is the goal we all strive for. In this world, achieving this freedom takes either immense sacrifice or extraordinary income.

Freedom by sacrifice? Yes, you can achieve freedom by sacrifice. There are people in this world and country that have few responsibilities, come and go as they please and answer to no one. They generally have no possessions, no income and live off of the generosity of others. This lifestyle requires sacrifices: sacrifices of comfort, safety and personal satisfaction. For most of us, this is not a viable choice. There is a less Draconian way to sacrifice to freedom. Never buy anything new if you can avoid it. Pay cash for every purchase you have to make. Scrimp and save every penny.

There are several problems with both of these methods. Most people are not disciplined enough to carry out either for long periods of time. Most of us are not willing to forego many luxuries today for a promise of future wealth. The biggest problem is that there is no guarantee that factors out of your control will not intrude and wipe away the efforts of your thriftiness.

But this is the method we have been taught for the most part. It comes from fables we are read as children like the tortoise and the hare where we are told that a basic parable on patience applies toward our future retirement. We are also told that great minds like Benjamin Franklin advocated this program. A penny saved is a penny earned is one Ben’s most famous quotes. But is this how he acquired his wealth? I do not think so. His wealth came from his many different enterprises. Ben knew the value of investing in money making assets.

So, if you are looking for financial freedom your first call to action is to evaluate what preconceived notions you have regarding money and how to acquire wealth. Take a critical look at each one and determine if that is rich or poor thinking. As you identify poor thought processes, resolve to change them through action.