Your mindset about your financial freedom typically reflects the programming you received as a child. This programming learned during adolescence will stay with most of you throughout your lifetime or until you decide to change and move into a completely different mindset. Learning a system that may work better for you is never too late. If you are one of the few brought up and educated in an environment of higher financial understanding, count your blessings – you are way ahead of the rest.
You have two choices regarding your financial freedom or financial well-being. The choice you make will determine the outcome of that mindset. You can choose to be rich or poor; it’s that simple.
“Rich people have their money work hard for them. Poor people work hard for their money.” – T. Harv Eker
The sooner you get your money working for you, the better off you will be in the long run, especially true if you are already into adulthood. It’s time for you to take control of your money instead of letting money control you. If you do not have a nest that produces “golden eggs” of passive income, the chance of creating a retirement life emulating financial freedom is slim.
During financial downturns, many people have learned harsh lessons. These lessons are mainly due to allowing others to control personal financial portfolios. Yes, it is a good idea to have a financial planner to assist you in learning the ins and outs of optimized financial prudence; however, the final choices made are your responsibility. If you choose someone else to manage your money, you will relinquish control of your retirement funds. The best approach is to manage your own money and never give total control to anyone else. You master your finances; only you know what’s best for you in the long run. Therefore, you must educate yourself to understand how money can work for you instead of working for money.
If you are unfamiliar with passive or residual income, it would be wise to start reconstructing your financial education immediately. If you are following someone else’s money management system and it is not producing passive income, it is time to change your mindset and money management system. Passive income is nothing more than money-making money, all by itself, without you having to work for it. Passive income is the opposite of what most people learn while growing up. That’s why you may struggle to survive instead of thriving with abundance. Would you be willing to learn if there was a way to change this mindset or reverse your current situation? Most would say yes; however, in reality, their current programming is so deeply embedded in their subconscious mind that they will continue to self-destruct financially – without changing anything.
The secret to financial freedom is to learn to split your net income into multiple accounts and only use those accounts exclusively for their actual intended purpose.
In the inspiring book “Secrets of the Millionaire Mind” by multi-millionaire T. Harv Eker, the author recommends the following accounts and percentages:
- Necessities Account (50%)—This account pays all your bills and regular living expenses. Never allow your debt to exceed an amount that will require using more than fifty percent of your usable net income to pay bills.
- Financial Freedom Retirement Account (10%) – Build a financial nest egg that produces passive (investment) income and then roll that passive income back into the nest until retirement. When you retire, live off the passive income and never touch the principle.
- Long-term Savings Account (10%) – The long-term savings account is for spending at a later date once you have saved enough to pay cash for the primary item you wish to purchase.
- Education Account (10%) – This account is for continuing education materials. It may include books, seminars, special self-help programs, additional specialty college coursework, etc., anything to increase your wisdom.
- Play Account (10%) – You need to set money aside for having fun. This account is to be used exclusively for fun; use it completely each month to consistently reward yourself for all the great work you are doing. It may be for a dinner date, a weekend getaway, a vacation, or other entertainment. As your income grows – due to your new mindset about money – so will the amount you have for fun.
- Charity Account (10%): Money is energy; the amount of energy you give to others for good humanitarian causes will multiply as your inner spiritual vibration increases. Learn to be a philanthropist, and the Universe will reward you tenfold.
The Universe will only provide more when you show that you are managing what you have in alignment with an abundant mindset. If you are not constantly moving forward with increased momentum, it may be time to determine why you are off the path of abundance.
We are all meant to thrive – not survive!
Author: Terry Swejkoski