How is it possible that you find yourself in this financial position? You were supposed to be further down the financial freedom route. What exactly messed up your plans of financial independence? How is it that so many grapple with financial stress year after year? Why is achieving financial security so difficult?
Faced with ever increasing bills and a dwindling bank account, does it not seem logical to think, “If I made so much more money, everything would be alright.” But what if this belief, logical as it sounds, is what’s actually holding you back from financial freedom?
Think about it. Don’t you earn more today than you did five years ago? Are your bosses, who earn significantly more than you, faced with the same harrowing financial trade-offs you have, only on a higher level? Aren’t newspapers awash with stories of individuals who were once rich but are now struggling? We also know from studies on lottery winners that a significant portion of them end up far worse off a few years after their windfall. If earning more is the solution to your money problems, how do you explain these cases? Or are they more the exception than the rule?
Here’s the truth: earning more money is not the solution to your money problems. This is a mirage that will keep you on the hamster wheel of unfulfilled financial promises for a very long time. Just to be clear, there is nothing wrong with earning more. Earning more is a good thing but it can never be the solution to your money problems. In fact, focusing solely on increasing income creates a dangerous cycle.
Rewriting your money story.
You may ask, “How then can I rewrite my money story towards achieving financial freedom?”
What you need is a shift in mindset. A shift in mindset means a change in the main belief associated with the matter at hand. The solution to your money problems is not to earn more. The solution to your money problems starts with seeing money management as a game. That means anybody from any level of income can make it to the top of their financial dream. You would know there are many low earners who are more financially healthy than their high earning counterparts, right?
Changing your money mindset to see money as a game has a number of practical benefits.
What is the most important question you would ask if you wanted to know about a new game? The most important question is not how you play the game or what you win. Those are secondary. The most critical question to ask about a new game is, “How do you win the game?” financial
You win the money game by growing plenty of Money Trees. Money Trees are productive assets. You need two types, the ones that appreciate in value and those that generate cash flow. The objective is to have more money coming in than the expenses you have.
Financial freedom is defined as having income that exceeds your expenses. It’s about having the freedom to choose how you spend your time. You work because you want to, not because you have to. You have financial security and peace of mind. You have the financial buffer to offset unexpected financial shocks without your lifestyle being negatively affected.
Financial freedom is an adventure.
Financial independence is a journey. You should always be growing Money Trees and adding new ones to make your orchard larger and larger. This is important because life can be unpredictable. You can wake up one day to find there are new technologies that render your Money Trees less valuable. The internet made information widely and freely available, decimating newspapers. The larger your orchard the easier it is to sell off and invest in the new economic era. When the agricultural era came to an end the wealthy landowners were better placed than most to pursue the new industrial era Money Trees. Why? Because they had extra money they could deploy without risking their lifestyle.
The argument I have made is that one of the main reasons so many of us struggle financially is because we have believed the lie that the solution to our money problems is to earn more money. While earning more is a good thing, it can never be the solution to your money problems. The solution to your money problems is to change your money mindset, your financial paradigm, your money beliefs. You need to see money as a game. The main objective of the money game is to grow Money Trees, and lots of them. Money Trees are assets that appreciate in value and generate cash flow. You need both types.
But how do you grow Money Trees?
There are three critical drivers for growing Money Trees. They are yourself, time and assets. Most conversations about money focus on assets. I contend that this elevation of assets as the main control lever is part of the problem. Assets are the least important of the three, not because they are not important but because the other two are far more important. You are the most critical of the three because you are the driver of the process. You are the one who must issue instructions to your time and assets. These two are there to serve you. You are the boss and they are your servants.
The reason so many struggle with finances is because they are bosses who have abrogated their responsibilities to lead and manage their money game. They have the industrious servants of time and money who are sitting idle, doing nothing. What happens when a pilot chooses not to use the leverage tools she has in the cockpit? You have an aircraft that gets controlled by the ravages of circumstance and the outcome is rarely pleasant.
Do you now see why you are the most important of the three control levers? At the core of your decision making is your set of beliefs. They are how you see the world and make cause and effect decisions. If your beliefs are misguided, based on a lie, you’re going to make bad decisions. That is part of the reason your finances are as bad as they are.
The lever of time is very different.
The second most important control lever of time is a bit peculiar in two ways. First, it is a constant, meaning it affects everyone equally. If everybody has 24 hours in a day, how is it possible for some people to get more done? They use leverage tools. A lever is a tool that takes the effort you apply and multiply it many times over. A child can open a door because the hinges do most of the heavy lifting. Second, time is a multiplier. It takes what you give it and multiplies it many times over.
You may have heard this famous quotation attributed to Albert Einstein, “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t, pays it.”
It pays tribute to the tremendous power of time in speeding up your journey towards financial freedom. Its uniqueness is that the time you have lost is lost forever, gone for good. It is therefore not smart to let your time go to waste without doing anything good for you. It is literally letting your industrious servant who wants to work for you sit there, bored, or worse, work for someone else against you.
Assets are the leverage tools that time seeks to multiply. As the navigator of your financial ship, it is important what assets you choose. Good assets will appreciate with time and increase your financial worth. Bad assets will depreciate with time and leave you with more extra expenses. Therefore, as the boss, start making the right choices. Give your servant instructions to do for you what he is a specialist in, multiplying your assets.
Conclusion.
The primary reason you lack financial freedom and independence is because you have believed the lie that the solution to your money problems is to earn more money. While earning more is a good thing, it is not the guarantee that will solve your financial problems.
The solution to your money problems is to have a shift in mindset, to modify your beliefs about how money works. See money as a game. How do you win the money game? You win the money game by growing Money Trees, assets that generate cash flow and also appreciate in value. But how do you grow Money Trees?
Financial freedom isn’t just about how much you make, it’s about how much you keep and how wisely you invest it. There are countless examples of people who have achieved financial security on modest incomes. The book The Millionaire Next Door by Thomas J Stanley gives good examples of that. By focusing on smart financial habits and responsible spending, you too can rewrite your financial story and build a secure future for both yourself and future generations.
The three critical control levers to growing Money Trees are yourself, time and assets. As the driver of your financial vehicle, you are the most important of the three. You have to give instructions to your two loyal servants of time and assets. Your failure to do so is reflected in your current financial circumstances.
To turn the situation around, first make a decision to see money management as a game. This is the belief that can catapult your finances to the next higher levels. Then be relentless about growing Money Trees. Wield the three control levers of yourself, time and assets. That means you need to invest in increasing your understanding of human decision making. A field of study devoted to that is called Behavioral Economics. Contrary to what you may have thought, humans make decisions with emotions and justify them with logic. It doesn’t work the other way around.
Put the servant of time to great use. Together with assets, we call them the Power Couple, he can turn your financial circumstances around in ways you can only dream of. Assets are important but they are the least important of the three control levers. Of course, you need all three to make it to your financial Promised Land.
As they say, the best time to start was years ago. The next best time is now. Start without any delay. I also recommend that you subscribe to our channel where we share more details on the logic explained in this article. You can subscribe by clicking here. You can also view the recommended video below for more on the subject.
The second most important control lever of time is a bit peculiar in two ways. First, it is a constant, meaning it affects everyone equally. If everybody has 24 hours in a day, how is it possible for some people to get more done? They use leverage tools. A lever is a tool that takes the effort you apply and multiply it many times over. A child can open a door because the hinges do most of the heavy lifting. Second, time is a multiplier. It takes what you give it and multiplies it many times over.
You may have heard this famous quotation attributed to Albert Einstein, “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t, pays it.”
It pays tribute to the tremendous power of time in speeding up your journey towards financial freedom. Its uniqueness is that the time you have lost is lost forever, gone for good. It is therefore not smart to let your time go to waste without doing anything good for you. It is literally letting your industrious servant who wants to work for you sit there, bored, or worse, work for someone else against you.
Assets are the leverage tools that time seeks to multiply. As the navigator of your financial ship, it is important what assets you choose. Good assets will appreciate with time and increase your financial worth. Bad assets will depreciate with time and leave you with more extra expenses. Therefore, as the boss, start making the right choices. Give your servant instructions to do for you what he is a specialist in, multiplying your assets.