Chapter 6 | Achieving Financial Independence - Part 2
(Part 2 out of 2)
Additional tips for economic independence:
Be strict about "protecting" your bank account / money:
Are you familiar with the following statements (and forgive me in advance for the cynicism in the responses to these statements)?:
"I don’t know where all my money disappeared to" - such person will certainly bring value to the market...
"All my money has vaporized” - you certainly would be glad to employ such a person...
Let these statements belong to 90% of the population, not you!
New approach:
Develop a new approach – I’ll take as an example the sentence: "I hate to pay taxes".
Understand the purpose of taxes - taxes feeds the goose that lays golden eggs:
Democracy, liberty and freedom.
Some might say: "this goose eats too much!" - that's probably true... and I'd still prefer a fat goose than no goose at all.
Obviously the government "eats too much".
Guess what? Most of us eat too much...
Change the approach to: that’s how I keep my freedom - no less.
Another example: "I hate paying my bills".
Understand that the faster you pay your bills – your commitments will reduce.
How's that for a new approach to paying bills?
Is there such thing as a bad investment?
You must have heard the following sentence, at one time or other: "I lost plenty of money in a bad investment".
The investment’s value dropped not only to that person, but to many others.
Will you be surprised to know, some people have profited through this decline in value?
There are quite a few situations in which you can profit off the decrease of an asset or equity.
One of them for example, is "going short" – In a nutshell, that means a decrease in the price of an asset yields profit to the investor.
What does that mean?
That means there’s no such thing as a bad investment, there are bad investors.
Learn about your area of interest, the one you want to invest in.
More importantly - become an expert in that area.
There’s a difference between "just" learning and being an expert: one who learns to read a map will expand his knowledge of geography, an expert will navigate with a map around the world.
Let there be no misunderstanding, even an expert makes mistakes.
The difference is an expert is aware of the risks, reduces them to a minimum and will know to climb back up in no time.
Knowledge as itself doesn’t have much value, except for what you gain by implementing it to achieve a certain goal.
Remember: people with intelligence and wisdom - have talent; but those with intelligence, wisdom, and purpose - have a future!
To sum it up, there is no such thing as a successful investment, there is a successful investor.
Your personality:
In his various books of the "Rich Dad Poor Dad" series, Robert Kiyosaki talks about four quadrants:
First quadrant - an employee.
Second quadrant – small business owner or self-employed.
Third quadrant – company owner.
Fourth quadrant - an investor.
Ask yourself in which quadrant you’re now.
More importantly, in which you want to be?
In which quadrant are the people closest to you?
Whichever you choose, be in addition an investor too.
Make a habit that will become a part of your personality – reduce your commitments, increase your assets.
Keep in mind these two phrases:
1. When wishing for prosperity and welfare, there’s no need for a greater effort than that required to acknowledge poverty and misery.
2. Both poverty and happiness are the outcomes of a thought.
Chapter summary:
* Do what you have to now, in order for you to do what you want to in the future.
* What you do with what you have, is more important than what you have.
* What you do with what you get, is more important than what you get.
* Recommendation to a good economic plan:
A. Learn to live off 70% of your income.
B. Donate 10% of your income to charity.
C. Invest 10% of your income in yourself.
D. Invest 10% of your income in others.
* Be strict about protecting your bank account / money.
* Develop yourself a new approach on different issues.
* There is no such thing as a bad investment, there are bad investors.
* There is no such thing as a successful investment, there are successful investors.
* Knowledge as itself doesn’t have much value, except for what you gain by implementing it to achieve a certain goal.
* Ask yourself in which quadrant you’re now. More importantly, in which you want to be?
* When wishing for prosperity and welfare, there’s no need for a greater effort than that required to acknowledge poverty and misery.
* Both poverty and happiness are the outcomes of a thought.
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Continue to Chapter 7 | Interpersonal Communication
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* Chapter 6 | Achieving Financial Independence - Part 1
* Chapter 5 | Five Skills to Success - Part 2