Skip to main content

Six Steps to Financial Freedom

To achieve financial independence or freedom (however you define this), you must follow certain basic rules, which haven't changed in 6,500 years of recorded history.

My definition of financial independence is: 1) Not living paycheck to paycheck; 2) Be debt free, except for a mortgage, as long as you have plan to pay off that mortgage as fast as you can; 3) Have a well-funded emergency fund; and 4) have a well-funded retirement account that is invested properly, or have a plan to have one before you retire.

You're an adult now (unless you're younger, so good for you for even reading this), so there no excuse. THERE IS ABSOLUTELY NO EXCUSE. You can't blame in on your parents, your boss, your spouse, the dogs, the kids. GET GOING TODAY.

Like Denzel tells his young prodigy in the Equalizer, Change Your World.

Don't fall into the entitlement trap. You are not a victim. Take charge of your own life. Build your own life.  Do you think anyone with wealth created it by sitting on the couch and watching reruns of NCIS? If you search for survey's you'll find successful and wealthy people don't watch that much television. They study, plan, work. And read.

Here are the essential rules, which you must start today

1. Set goals and have a plan

Read this recent article on 10 LIFE-CHANGING New Year's Habits





2. Budgets and Net Worth statements are essential

If you don't have a budget, you can't do step 3. So might as well as give up now and live the life you deserve. Which is probably what you have right now.

How to do a budget

Your Personal Net Worth

3. Have an emergency fund. 

My only comment is that Dave Ramsey's $1,000 emergency fund should be higher. When he wrote his original book, it would take at least $1,800 in today's dollars to purchase the same goods and services. If you're not saving, you won't make it past this step. You'll always be living pay-check-to-paycheck, always be in the hole, etc. Did I mention fighting with your spouse over money. STOP THAT RIGHT NOW. Today. Not next payday. RIGHT NOW.

4. Get out of debt. Stay out of debt


5. Invest wisely



6. Always save at least 10 percent first

Comments

Post a Comment

Thanks for the comment. Will get back to you as soon as convenient, if necessary.

Popular posts from this blog

California: A Model for the Rest of the Country, Part 2

Part 1 here . On Leaving the Golden State Guest Post by NicklethroweR . Posted on the Burning Platform. The fabled Ventura Highway is all that separates my artist loft from the beach where surfing first came to the United States. Both my balcony and front patio face the freeway at about eye level and I could easily smack a tennis ball right on to the ever busy 101. Access to the beach and boardwalk is very important to a Tourist Town such as mine and I can see one underpass from my balcony and another underpass from the patio. Further up the street are two pedestrian bridges. Both have been recently remodeled so that people can not use it to kill themselves by leaping down into traffic. The traffic, just like the spice, must flow and the elites that live here do not like to be inconvenienced as they dart about between Malibu and Santa Barbara. Another feature of living where I live would have to be the homeless, the insane and the drug addicts that wander this particular...
Post a Comment
Read more

Factfulness: Ignorance about global trends. The world is actually getting better.

This newsletter was powered by  Thinkr , a smart reading app for the busy-but-curious. For full access to hundreds of titles — including audio — go premium and download the app today. From the layman to the elite, there is widespread ignorance about global trends. Author and international health professor, Hans Rosling, calls Factfulness  “his very last battle in [his] lifelong mission to fight devastating global ignorance.” After years of trying to convince the world that all development indicators point to vast improvements on a global scale, Rosling digs deeper to explore why people systematically have a negative view of where humanity is heading. He identifies a number of deeply human tendencies that predispose us to believe the worst. For every instinct that he names, he offers some rules of thumb for replacing this overdramatic worldview with a “factful” one. In 2017, 20,000 people across fourteen countries were given a multiple-choice quiz to assess basic global literac...
Post a Comment
Read more

Proper way to calculate CAGR using T-Sql for SQL Server

After reading (and attempting the solutions offered in some) several articles about SQL and CAGR,  I have reached the conclusion that none of them would stand testing in a real-world environment. For one thing, the SQL queries offered as examples are overly complex or don't use the correct math for calculating proper CAGR. Since most DBAs don't have an MBA or Finance degree, let me help.  The correct equation for calculating Compound Annual Growth Rate (as a percentage) is:  Some key points about CAGR:  The compounded annual growth rate (CAGR) is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time. Investors can compare the CAGR of two alternatives to evaluate how well one stock performed against other stocks in a peer group or a market index. The CAGR does not reflect investment risk. You can read a full article about CAGR  here .  To calculate the CAGR for an investment in a language like ...
Post a Comment
Read more