Two weeks ago we talked about financial independence and the three steps to achieving it. We had acquiring money, keeping money, and then growing money. In the previous article we talked about why this is so fundamental to living a decent life and critical to achieving the freedom to do what you want with your time. We talked about how to leverage the right job to start earning decent money, which jobs are going to be good wealth creation vehicles, and about some alternatives to maximizing income when not starting from having a lot.
Now we’re going to cover keeping that money and hopefully, space permitting, growing that money. Two more fundamental parts of becoming financially independent and having the freedom to live the life that you want. Remember the first step is finding a job that pays decent money.
My recommendations were to stay away from college and from starting with entrepreneurship. Ultimately, yes, entrepreneurship is a good path but not before you have sizeable cash flow and a good understanding of business, sales, marketing, and the like. But we already covered that.
Let’s get into keeping your money.
The B Word
You’ll never make big money by forgoing that coffee in the morning. By cutting out a penny here, a dime there. That is no way to create health and unfortunately when the word “budget” is mentioned. This is what people are thinking about. Truth be told you absolutely need a budget. However a budget is not created to create wealth. That’s what sales and such is for. A budget is created to keep your wealth.
You have to know two things, tracked down to the penny.
How much money is going into your bank account each and every month and then how much money is leaving your bank account each and every month. Some people only use credits cards so they can keep track of everything in a nice monthly printout. Granted if you’re responsible and pay them off this can be a good idea.
Or you can printout statements from your bank, write everything down (granted that you actually write everything down and not just most things), it doesn’t really matter how you record the information. So long as you record the information. And at first you’ll want an itemized list month month. Not just how much went in and how much went out, but also what was spent and what created income.
Mostly what was spent.
You need to know your numbers. What goes out and what comes in. There is no getting around this. You have to know these things if you’re going to get anywhere with financial independence. Have a budget.
Meaning know your numbers. Month to month. I’d recommend granular tracking for at least a year. And then you can start tracking money in and money out alone. However every 6 months I’d recommend a granular breakdown just to keep yourself honest. Keep records of your budget.
After a few months look for trends. Look for places where you can cut and places where you can eliminate. Once you have your eyes opened you’ll be very surprised how much money you spend on things that don’t do a whole lot for you. Think of the ROI on everything you do. Not just in monetary terms but also in enjoyment.
For example it’s fine to buy expensive things or do expensive things so long as it fits within you budget and the ROI is good for you. For example if you like going to a steakhouse every month then factor that in and cut from places where you could care less about.
Write down what you ending balance is. Not just in dollars in the bank but in whether you’re in the black or red for the month. Because your overall account may be full but if you’re not making money month to month then it’s temporary. We want to get to a level on income matched with a level of tracked spending that’s putting money in the bank month to month.
Because without getting that right we’ll never be able to accomplish the next step.
Growing Your Money
There are many different ways to grow your money. I’m not going to get into stocks, bonds, investing or any of that. Mostly because I feel that there are better places to put your money. So you have a healthy cash flow and you are tracking your numbers and mindfully spending so that you have excess month to month.
Now would be the time to start looking at something like entrepreneurship. Because now you have the capital to fund a entrepreneurial venture. There’s a false statement floating around that you can either invest your time or money in a business to get it going. But here’s the fact, eventually you can have all the time in the world but if you don’t have money then it doesn’t matter. You need money for marketing and for setting things up, no matter the business.
With your excess you can purchase the best training and then use good marketing channels and such to build up a side business. In a few years you could have something lucrative going. There are other options like real estate, not something I know a ton about but something I feel is better than the stock market. Start looking for wise investment opportunities. If you don’t want to start you own business maybe look for someone else to help start theirs for a share.
Personally I’d recommend entrepreneurship. Look for something that make decent money. Look at others that are successful and what they do to be successful. What is a hobby or passion of yours? Not all of them can be lucrative side hustles but many can. Or if you can’t do your hobby/passion maybe you can get started in something adjacent to it. Or maybe they stay hobbies/passions for you and you find another place to invest.
This is something that I learn more about each and every day. I think looking for alternatives to the stock market is a wise option for anyone. Even stocking enough away in the bank will return something, not a lot but something. Not that I recommend that. What I do recommend is thinking outside of the box and keeping your eyes and ears open to what’s around you.
Financial Indepdence
Is possible, especially with an early head start. Don’t follow what everyone else does. Think for yourself and you can find freedom. I’ll admit of these three sections of financial independence the one I know the least about is growing, aside from entrepreneurship. Mostly because entrepreneurship is my vehicle but even then eventually you’ll want to parlay the money from entrepreneurship into something else. Maybe in the future we can go more in depth into investments. But in the meantime I hope the information here serves you well.
Thanks for reading.
If anything I said here interests you I’d highly recommend you check out The Ultimate Alpha Collection which is a compilation of 16 of my books for the price of 5. It covers everything from being a man to making money to getting the right mindset to getting girls to fighting and more and is a resource no man should be without. Pick up your copy today!
-Charles Sledge
