Do you LIKE being a slave?

Piling up credit card debt makes you a slave.  You give up your freedom every time you add to the balance on your card.

When you owe debt, you are no longer working for your own financial well-being.  You are working to make someone else wealthy – the credit card company.

You are their slave.  You toil all day to make them rich.  You’ve voluntarily become one of their minions.  Does this make you mad?  It should.

The Truth About Debt and Slavery

“A person held in servitude as the chattel of another,” is how Merriam-Webster defines slave. 

What does it mean to be the “chattel of another”?  It means you are their property, their possession.  They own you.  That’s what credit card debt does.  It makes you the property of big banks.

They enjoy an amazing amount of control over your life.  More than you probably realize.  The credit score they assign you determines whether you can buy a house or rent an apartment.  It heavily influences what you pay for insurance and can often determine whether you get a job or not. 

If you fail to pay what you owe on your cards, then the banks can sue you and even send you to jail.  They can literally take away your personal freedom.  That’s what you are risking as you continue to pile on debt.  Think I’m kidding or misinformed?  Read Debtor Prison Is Real: Are You Headed There? for some recent examples of this happening to real people just like you and me.

On top of these risks, you volunteer to pay a 12 to 25 percent upcharge directly to them on the balance you carry on your card.  What if Walmart told you that in order to shop in their store you had to pay 15% to 25% more on every purchase?  Would you keep shopping there?  I don’t think you would.  Yet, you keep charging things to your credit cards and paying the interest every month. 

It is like you have a leak in your bank account that is siphoning away your financial power and it all goes directly to them.

All of this that you are voluntarily giving up, makes you a slave.  It weakens you.  It limits your options.  It makes you their property. 

Are you mad yet?  You should be.

How to Fight for Your Freedom

It is funny to me the way we carry on about freedom sometimes in this country.  We “Occupy Wall Street” to make some kind of statement against the so-called “corrosive power of major banks and multinational corporations.”  However, at the same time, we trot over to Starbucks and swipe their card through the machine to buy another latte.

We voluntarily commit ourselves to being their slaves.  They don’t coerce us into doing this.  No one is holding a gun to your head telling you to buy more stuff that you don’t need.

Demonstrations are not the way to break free from this slavery.  It is great that people are mad about what is going on, but this is the wrong way to make a difference.

The way you fight back is by taking personal responsibility for your finances.  You stop charging stuff to your credit cards, you refuse to live beyond your means and you pay off your debt.

In this way, you can reclaim your freedom.  You can liberate yourself.  You can once again be the master of your future.  By doing this, you will break the control they have over your life.

Stop giving the big banks power over you and lining their pockets with your hard-earned cash.  If you don’t owe them anything, they can’t control you anymore.  You will be free.  You can make your own decisions.  You can stop worrying about how you’re going to pay their bill.  You can use that money for things you really want.  You can be in the driver’s seat and wear the pants in your family again.

The only demonstration that is going to change what is going on in this country is the demonstration of personal financial wisdom.  By refusing to volunteer to be their slave, you will force them to change their ways.  You will turn things around.  Fiscal responsibility starts at home and it will spread from there. 

You can do this.  You can get control of your finances and you can stop volunteering to be their slave.  There is a ton of information out here on the Internet that can help you.  You don’t have to pay a dime for it either.  However, you will have to spend some time finding it and figuring out how to use it. 

If you want to expedite your progress, then check out The Super-Charged Guide to Financial Freedom.  It is a concise, step-by-step plan that I put together to give you everything you need to break free.  It is a battle plan – an underground railroad out of financial bondage.

Are you going to fight back or will you continue to volunteer yourself as their slave?  Make a decision now to take a step toward freedom.

Photo: Copyright PhotoXpress.com

This is a guest post by Mark Zaifman of

If you were to discuss your relationship with money, as if you were talking about your relationship with a life partner or close friend, how would you describe it?

If you were asked to describe your relationship with money in one word, what would it be?

Is your money in alignment with your values and purpose?

Are you making a living or making a dying?

When is enough, enough?

The answers to these very personal and intimate questions may scare you or inspire you. What is important is beginning an open and honest dialogue between you and your money. By posing these questions, you can examine, discover and explore one of the most confusing, frustrating and at times rewarding relationships you’ll ever have, the one between you and money.

Myths & Lessons

One popular myth that surrounds money is, If I had x amount of money, all my troubles would be gone. I bought into that myth for most of my young adult life. If I just got that raise or make this deal, I can stop worrying and be happy. For me, the ‘finish line’ kept moving ahead of me and always just out of my reach.

One of the hardest lessons in life for me to learn was how to delink my net-worth from my self-worth. This is much easier said than done. Like any unconscious behavior, change will only occur when you bring awareness and consciousness to your thoughts and play the role of observer. It’s very easy to practice this transformation work when your net-worth is rising weekly. During the boom times, I thought change had occurred. I thought I was done with the practice of observing my relationship with money because I had mastered detaching my net-worth from my self-worth.

Not so fast.

The savings and loan crisis of the late 80’s swept through and my net-worth took a dive. I watched with disbelief as the value of my home declined by 40% within 2 years. At the same time, I watched my investments drop considerably in value.

Did I feel my self-worth decline as much as my net-worth? You bet I did. All the personal work I did that I believed had cured me of this toxic link flew out the window. I was feeling the dark shadow of anxiety following me around again.

I spent months second guessing myself. Why didn’t I sell my home a year earlier, before the crash? Why didn’t I move my money out of stocks and into the safety of bonds? I blamed myself constantly and felt shame as well. It was a reinforcing, self-destructive cycle. I discovered it was my ego that was attached to my “things”. Once I realized that, I knew I had my work cut out for me.

Until I brought consciousness and attention to my relationship with money, ego ran the show. Once I understood the concept that money represents life energy and life energy represents spirit, my entire life changed. No longer was ego running my money affairs.

Intuition, intention and connecting to a higher power in terms of creating abundance was the path I chose. And by no coincidence, during this turning point in my life, the international best selling book, Your Money or Your Life, Transforming Your Relationship with Money and Achieving Financial Independence manifested into my life. From that moment on, role models including successful people that had achieved large amounts of material wealth began manifesting into my life as well. They taught me how to practice radical humility and live a life with gratitude and service to others.

Déjà vu & Opportunity

So here we are again, another economic crisis another opportunity. Isn’t it funny how life keeps tossing you the same lessons over and over again until they have been learned? This current financial crisis could be the opportunity you need to finally cut the link between what you have and how you feel about yourself.

Perhaps you’ve been neglecting this vital relationship because your net-worth was constantly rising. But now, faced with financial reality, you can choose to respond positively and with determination, self kindness and courage or you can choose lower energy feelings of blame and shame and beat yourself up about all the would’ve- could’ve- should’ve’s that will only keep that dark shadow of anxiety around that much longer in your life.

Achieving Financial Freedom

If I had to use one word to describe the feeling of not having my self-worth be linked to my net-worth, it would have to be liberation. I finally feel free.

Financial Independence, or financial freedom, means two things to me:

1. Peace of mind and comfort in where I am in life and
2. The realistic and attainable goal of not having to work for money but rather, working because I enjoy it.

I won’t deny that you need a certain amount of wealth to stop working for money, yet I would suggest that the element of financial independence that is even more important than the amount of money in your bank account is the emotional freedom from money. Money will no longer be your master, rather, it will be your servant.

Accumulating wealth is the outer work. The inner work involves delving into your relationship with money, challenging all your assumptions, understanding your money history, your fears and desires, playing the role of observer as you bring awareness to all aspects of how you spend, save and earn, that’s the spiritual side of money that’s in need of your attention, now, more than ever.

Now is a great time to work on your relationship with money. Be kind, compassionate and patient with yourself as you explore these sensitive issues and challenges. It’s a journey of self-discovery that will set you free and for that alone, the journey is well worth it.

Looking into the Future

Imagine for the moment that you have achieved financial freedom. As you visualize this concept, how do you picture your life? What are you feeling? What assumptions are you making about your life? Where do you live? How much money do you imagine having in the bank? How much do you spend each year? What gets you out of bed in the morning feeling happy and fulfilled? How do you spend your most precious commodity – time? What’s your purpose in life?

You’re on the road to financial freedom – enjoy the journey.

What is your attitude toward money?  Leave a comment below and let us know your thoughts.

Photo: Copyright PhotoXpress.com

I made a decent living, but I always felt spread too thin.  I also felt pressure to save for retirement, save for the kids college fund and keep up with the proverbial Joneses. 

I was sick of it.  I wanted more.  I wanted to feel like I was getting ahead instead of further and further behind. 

This was all about five years ago.  Now, things are much better.  The stress is gone.  I feel financially free.

How I Got Into This Mess to Begin With

I was a slave.  I was trapped in a personal economic recession.  I didn’t even really understand what true financial freedom looked like.

At the time, I had just left a struggling small business that I had co-founded eight years earlier.  Like so many before me, my personal finances were a mess because of my commitment to the business.

At the same time, I hadn’t adjusted my lifestyle so, I was spending way more than I was earning.  As a result, I dug myself into a bit of a hole.  I had gone so far as taking out a second mortgage on my house to consolidate some of my debt thinking this would help, but it didn’t.

I wish I could say that I was the smart one that woke up one day with a solution, but I wasn’t.  I just kept doing the same old things I had always done financially.  I repeated the same mistakes hoping for better results.  The results never came.

How I Moved from Slavery to Freedom

Finally, my wife spoke up.  She recognized that we needed to change.  Honestly, I resisted.  I was afraid.  Looking back now my resistance and fear seem so ridiculous.  I mean I was definitely tired of feeling like a hamster on a wheel, but the changes she said we needed to make seemed so radical, so different. 

It was all so different from how we had managed our finances up until then.  Back then, I thought financial freedom meant one of two things:

1. We had to become rich enough that we didn’t need to work.
2. We could spend whatever we wanted within reason without having to think about it.

I came to realize these are both dead wrong.

True freedom comes from having a sense of control.  It is about consciously making your own choices.  We weren’t managing our money well enough to feel in control.

Eventually, within a few weeks, I came around.  I learned more about the strategies my wife was suggesting and I saw the light.

I realized that you don’t have to be rich to feel financially free.  You just need to get control and make the money you have do what you really want it to do.  We had literally pissed away the majority of our financial strength on stuff, crap really, that we could barely remember.

We decided together to try something different.  After all, what we had done up to this point hadn’t worked out that well for us, so why not try a totally different approach?  We desperately wanted better financial results and we realized that our old ways were never going to get us there. 

The Plan for Financial Freedom

It was time for a change, but change can be difficult.

How do you steer your life in a new direction?  You need a map, a plan toward a new and better destination.

We spent a lot of time figuring it out.  We stumbled forward at first.  We made mistakes along the way, but eventually a clear path emerged.  Now, five years later, we have paid off all our debt except our mortgage, we have money in the bank and we feel free. 

We are in control of our finances and it is a great way to live.

How did we do it?

I’ve written it all down.  I’ve created an eBook called The Super-Charged Guide to Financial Freedom that lays out exactly what we did to start winning with our money.  It is a simple step-by-step plan for getting control of your money and creating good financial habits.

You can buy a copy today and learn how to do exactly what we did to set ourselves free. 

You might ask, “Why are you charging for the eBook?”  Well, it took some effort to figure this all out and to write it down in a nice, understandable format.  I just want to recoup something for all the time and energy I spent building it.  I’m sure you can understand this.  After all, what you can achieve financially by following this plan is worth a hundred times more than what I’m charging for the eBook.

Are you ready to take a giant step toward improving your finances?

If you need a plan to steer your financial life in a new and prosperous direction, then click here to get The Super-Charged Guide to Financial Freedom.

Photo by guitargoa

Getting debt free is a great financial goal, but we shouldn’t stop there.  The next steps are really where we benefit from the hard work of paying off all our creditors.

Once we are no longer burdened by monthly payments, then we have the freedom to start doing wise things with our money and living life to the fullest!

This is the point where we can begin to get ahead in our personal finances and in life.  Having a clear direction will determine whether all the hard work meant something or not.

Even if you aren’t debt free yet, but are working in that direction, it is a good idea to start formulating a solid plan for moving beyond the basics.

Debt Free Now What: Ideas for the Next Steps

Chances are if you are debt free, then you know and follow Dave Ramsey.  However, now is a good time to review the 7 Baby Steps from his book The Total Money Makeover.  My wife and I have been following his guidance for over three years and it is really paying off for us.

We paid off $28,000 of debt in about 20 months while my wife stayed at home to raise our children.  It is incredible to be debt free except for our mortgage, but we certainly have goals beyond this step.

Our first goal after becoming debt free was to complete our emergency fund of 3 to 6 months of living expenses.  We intentionally chose to keep this on the lighter side, but still feel comfortable we are covered.  For most, this step is a given and usually only takes a few months after paying off that last debt to complete.  Don’t lose your intensity until this is done!

Moving beyond the basics is where we are headed now.  Here is a list of some of what we are working on.  I hope these ideas will help you to formulate your own goals for what to accomplish once you are debt free.

1.  Start Socking Back 15% of Household Income for Retirement

I do not want to wind up eating ALPO for dinner when I grow old!  Therefore, I’m investing for my retirement.  I’ll admit that 15% is a pretty steep amount, but we slowly worked our way up to this level of savings.  The gradual approach was a lot easier than trying to do it all at once.  Of course, you can never start too early.  The sooner you start saving for retirement the better.

2.  Begin College Fund for the Children

Last year, I used a good chunk of my annual bonus as the foundation for my kids’ college fund.  I’m also contributing a small amount monthly to this fund.  Fortunately, my daughters are still pretty young so I have some time to let this money grow.  I consider this an important priority.  I definitely want my girls to have the opportunity to attend college or another form of education if they so desire.

3.  Save to Pay Cash for Newer Cars

I drive a 1997 Ford F-150 that still runs like a champ, but I know that eventually it is going to need to be replaced.  Rather than borrowing the money to buy something newer, I’m saving cash to buy what I want when the time is right.  Even then, I won’t be buying something brand new.  I’ll probably buy a vehicle that is 2 to 3 years old with low mileage.  I’ll let someone else take the big depreciation hit that occurs when you drive a new car off the lot.  If you are in the market for a vehicle, then please check out my frugal car buying guide for a lot of fantastic tips.

4.  Give More Generously

One of the motivators for my wife and I to get debt free was so we could help others.  We want to live below our means so we can give generously to our family, church and worthy charities.  The vision of being able to help in more profound ways really did drive us when we were living on rice and beans to pay off our debt.  Now that we’re debt free, it is fun to give to others and see the great results!

5.  Work Towards Paying Off Home Mortgage Early

I mentioned earlier that we are debt free except for our mortgage.  We do still owe on our house, but the good news is that we are no where near being upside down on our loan.  In fact, we have quite a bit of equity in our house.  We bought it at a good price and the housing market where we live hasn’t tumbled like it has elsewhere.  We will easily have our home paid for in the next five years, but I’d like to see that happen even sooner if possible so we can reap the benefits of paying off our mortgage early.

6.  Travel Abroad and Live More Adventurously

Last, but not least, one of our goals is to have the funds to travel more often.  We love going to new places and exploring the world, but this takes money.  In addition, we want to take our daughters with us to countries outside the United States so they can see the diversity that exists around the world.  We think it is very important in order for them to become well-rounded individuals.  Fortunately, I believe being debt free is the perfect way to ensure we’ll be able to do this.

Make Your March to Debt Freedom Really Pay Off

Without a vision for the future, you may be tempted to fallback on your old ways of spending more than you earn.  It would be a pity to let all your hard work go down the drain!  Make sure you are looking beyond just getting debt free to building your net worth and living out your dreams!

Photo by AMagill

I’m guessing that a lot of people feel financial freedom is out of their reach. 

Well, I beg to differ with them.  I believe it is possible to save one’s income to become rich.

You don’t even have to make a ton of money to become a millionaire.  All you need is the desire to do well with your finances and a little creativity.

Believe you can save your income for financial freedom

Does this already sound like a late-night television infomercial?  Well, it’s not.  However, it is hard to write about becoming wealthy without starting to sound that way.

Stick with me here and I’ll show you that my plan for achieving financial freedom is not a fly-by-night scheme.  In fact, it is very realistic for most of us.

Becoming a millionaire is relatively simple.  It isn’t altogether easy, but it is simple.

Take a look at the chart below.  It assumes a 10% rate of return on your investments.

If you save $500 per month for 30 years earning an average return of 10%, then you will become a millionaire.  It is as simple as that.

So, what if you plan to retire in less than 30 years or what if you don’t have $500 a month to save?  Well, as the chart above illustrates, you can still build a respectable nest egg.

For example, if you invest just $300 per month for 25 years, you will have almost $400,000!

Of course, the earlier you start the better.  Look at the figures in the 30-year column compared to the 25-year column.  Waiting an extra five years makes a big difference.

If you are in your 20s or 30s, I implore you to start a regular investment plan now!

Two critical components to achieve financial freedom

The two most important things you have to understand in order to become rich are:

• You have to pay yourself first and
• You have to make your savings automatic

Paying yourself first means you budget an amount to save every month and live on what’s left over.  Most people do the opposite and wind up broke.

When savings is your top priority, you schedule to have money automatically deducted from your paycheck or checking account every month to be invested.

This strategy for savings ensures that you follow your plan which guarantees that you will become rich.

Okay, let me add one caveat to my guarantee.  There are always exceptions, aren’t there?  You have to wisely invest your money to earn your planned rate of return.

How to invest to save income for financial freedom

I believe growth stock mutual funds are a good way to invest for retirement.  I know that the stock market has taken a beating lately, but historically, over the long haul, the market has performed very well earning around 10%.

Of course, as many are quick to point out, past performance is not necessarily an indicator of future returns. 

I invest my money in mutual funds for a few reasons:

• By definition, they are diversified.
• Good mutual funds, have a long track record of solid earnings
• They are easy to understand and purchase

A good investment strategy for getting rich is boring.  It grows slowly, but steadily.  This is not exciting, but it is dependable.  I believe in the K.I.S.S. principle.

Things to point out about saving income for financial freedom

I hope you will take a few moments and study the chart above.  Again, it is simple, but very revealing.  Look at it carefully and absorb all it tells you.

Let me point out a few things to observe:

1.  The savings scale stays between $100 to $500

I kept the monthly investment low on purpose.  I wanted to illustrate that even a modest amount of money can grow into a big result.  Let me reiterate that it does not take a six-figure income to get rich.  You just have to practice some basic financial principles and then let compound interest do the rest!

2.  The years scale shows an investment horizon of 20 to 30 years

Investing for wealth is a long-term proposition.  The longer you have to invest, the easier it will be to become a millionaire.  Of course, it is possible to save a lot of money in a short time, but you would likely need to significantly increase the amount you were saving monthly.  Hopefully, you are in your 30s or 40s and still have time to easily get rich.

3.  The chart doesn’t lie.

The chart is the whole reason that I wrote this post.  It is a reminder to me and hopefully to you too that it is possible to get rich.  If you believe you can, you will.  Yes, it takes some discipline and a plan, but with just a little effort, time and money you can become a millionaire!  Isn’t that encouraging?  It is to me.  The chart is my vision for the future.

Are you going to become a millionaire?

I end with the question I asked in the beginning.  Becoming wealthy is a decision you can make.  What do you choose?

For many, they will continue a consumption lifestyle, pass that legacy on to their children and end up in the poor house (i.e. a facility that accepts Medicaid).

I have chosen to finish my life better than that and to help my kids get off to a better start in handling their money.  My plan isn’t glamorous, but it will work.  I will be a millionaire!

What say you?  Are you going to become a millionaire?

Photo by UKDevon

All too often, people rely on unrealistic means to free themselves financially.  Their hope lies more along the lines of wishful thinking than true strategy.

A solid plan for the proper use of your existing income is the best way to reach financial freedom.

Where many go wrong in their pursuit of financial freedom

I believe most people would say they desire financial independence.  However, if you asked them how they plan to get there, very few would have a worthy strategy.

Many hope for a big break.  They wish for one or more of the following:

• To win the sweepstakes or lottery
• To inherit money from a rich relative
• To hit it big in a multi-level marketing business
• To get lucky at a casino or race track
• To make a quick fortune trading individual stocks
• To stumble onto the next great get-rich-quick opportunity

Any of these would be great, but riches rarely fall into people’s laps this way.  The fact is that most wealthy individuals get there the old-fashion way.  They earn it!

It is amazing to me how so many can go their entire lives essentially hanging their hat on one or more of these fantasies.

Well, I’m sending out a wake-up call.  These wishful dreams rarely, if ever, work!

I know it is rare, but don’t some people get-rich-quick?

Yes and, despite the odds, some people would rather hang onto this fantasy than face reality.  They believe that someone has to win so, “Why not me?”

Well, even for that ever so small minority that do see a gigantic windfall come their way, it rarely lasts.

For those that come into a large sum of money by having it handed to them, they generally wind up broke.  In fact, they typically blow the money frivolously and end up worse off than before!

People that fail to learn the discipline of good money management, don’t know how to handle wealth when they get it.  This has been proven over and over again.

More tried and true methods for accumulating wealth

Okay, so if the old fantasies for achieving wealth don’t work, then how can I become financially independent?

Well, becoming financially healthy is a lot like becoming physically healthy.  It takes time, discipline and consistency.

For proper physical health, study after study shows that you have to eat right and exercise.  It isn’t glamorous or exciting, but it works.  The fact that it works more often than not, makes it a viable strategy to choose.  It is no longer just wishful thinking, it is a plan.

In the same way, the true methods for accumulating wealth are not usually popular or exciting, but they work. 

To become wealthy, you need to apply these steps consistently over a long period of time.  You need to make them the habits you live by.

If you do, then chances are very good that you will become wealthy.  This is the plan to follow.  It is a tried and true strategy.

Using your income to achieve financial freedom

So, what are the steps?  Here they come in all their splendid glory:

1.  Generate a decent income by working

You don’t have to make six figures to get rich.  People of all income levels have done it.  You just need a decent income to use as your tool for building wealth.  You can generate this income by working for someone else or by working for yourself.  It doesn’t really matter.

2.  Budget your money to live below your earnings

A budget is simply a method for planning and tracking your income.  It converts the money you make into a tool for building wealth.  It does this by giving every dollar a purpose.  You have to be very intentional to become wealthy.  That’s the role of a budget!

3.  Keep your lifestyle very modest

It is much easier to spend less than you earn if you keep your lifestyle modest.  Stop trying to keep up with the Joneses who are living well above their means!  Sell what you don’t enjoy, be thrifty and pay cash.  Simpler is better!

4.  Live without debt

Most wealthy people who remain rich pay cash for everything they buy.  They do not use credit.  Debt is risky and it is a more expensive way to buy things.  Millionaires are much too smart to fall for this trap.  Live debt-free!

5.  Save what you don’t spend

Rat-hole away every dollar that you can!  The more you save, the faster your net worth will rise and the sooner you will become financially independent.  Accumulating money is what being wealthy is all about.  Save, save, save!

6.  Make your money work for you

The rich understand the magic of compound interest and wise investing.  They diversify their investments and they watch their money grow.  They only invest in things they understand and they never leave their investment decisions to someone else!

Financial independence will not take as long as you think

I guess most people balk at this simple, but effective plan because they think it will take too long.  They want to be rich today!

Well, it does take some time, but it doesn’t take forever.  In fact, once you start and especially after you pay off all your debt, your wealth will accumulate much faster than you think.

The key is to get started.  The sooner you do, the quicker you will realize your dream for financial independence!

What are you doing to build wealth?  How well has it worked for you?

Photo by Dazzie D

No matter how you slice it, life takes money. 

It takes money to take care of your kids.  It takes money to advance a cause.  It takes money to retire with dignity.

Buying more than you can afford and accumulating debt drains you of your financial power.  It binds you and limits your options, recession or not.

4 steps to gain financial freedom and win with money

Don’t get me wrong.  I certainly don’t advocate greed or using money to push others around.  However, having a little money will buy you the freedom and influence to do a lot of good in the world.

One of the reasons I want to be smart with my money is so I can give generously to those things that I am passionate about.  If I’m financially secure, then I can also devote more of my time to things of greater significance.

Okay, so how do we go about gaining financial freedom?  Here are the four steps I believe will get you headed down the right path.

1.  Take a deep breath and relax

You probably expected something else as the first step.  Well, with all the hype going on in the media, the craziness on Wall Street and the politicians constantly screaming about the financial crisis, I think we all need to pause for a moment to regain our composure.

You do not want to go off half-cocked.  Take a breath first.  I like what Sara writes about Finding Sanctuary in Yourself. 

We need to calm down, find some inner silence and only move forward in making decisions when our emotions are under control.  Otherwise, we are likely to do something stupid.

Fear leads to rash behavior and shaky decisions neither of which generally result in winning with money. 

Take your time.  Figure out a solid plan and then execute it methodically.

2.  Consider downsizing your lifestyle

Many of us could afford to downsize our lifestyle a bit to gain some margin between what we earn and what we spend.

Madison and her husband have been tossing around ideas about downsizing their home.  In Should We Downsize?  More Considerations, she shares some of the input she received from other bloggers and readers that is helping them decide what to do.

I like Madison’s approach.  First, she and her husband are not holding anything back.  They’re even willing to sell the house they love if it means retaining their financial freedom.  They have their priorities straight.

In addition, Madison is gathering a lot of information, thoughts and advice before taking such a big step.  This is exactly the kind of deliberation that helps people make smart choices.  I applaud her effort and method!

Is your lifestyle bloated?  Do you need to downsize?  It is a sometimes painful, but often necessary step toward financial freedom.

3.  Become debt-free

Once you are living below your means, then start paying off all your debt.  Becoming debt-free is the only way to regain complete control of your finances.

Do you have a lot of debt?  Well, so did Ron, but he has a lot less now!  He tells us How I Paid Over $120,000 in Debt in 52 Months.  What an incredible story!

Think Ron’s story is impossible?  Well, I know that it is possible to become debt-free because my wife and I paid off about $28,000 in debt in just under two years. 

If Ron and I can do it, then so can you!  We’re both just normal guys with families living in Arkansas and Oklahoma making middle class incomes.  We simply developed a plan, got serious and stuck with it until our debt was gone!

Once you have your debt paid off, then you’ll have the freedom to start saving and giving.  The benefits of being debt-free still amaze me every day.

4.  Save a nice nest egg for retirement

Retirement will be here before you know it and I want to retire with dignity.  I want to be able to enjoy not having to work!

The only way that I know of that I’ll be able to do that is by saving money now.  Sounds simple, right?  Then why do so few of us actually do it?

I guess many of us don’t see the immediacy of the problem.  We feel retirement is a long way off.  Well, it may be, but it also takes time to accumulate the kind of wealth you’ll need to retire comfortably.

Frugal Dad asks Saving For Retirement: What’s Your Number?  Have you ever stopped to figure out how much you’ll need to live the way you want after you retire?  If not, then you need to read Frugal Dad’s article!

I’m really starting to sock some money away for retirement.  I look forward to many years of traveling, playing with the grandchildren and living a life of leisure once I retire!

It just takes a deliberate plan to gain financial independence

Financial independence is not that hard.  You just have to take a breath, make a few sacrifices, pay off some debt and save for the future.

Once you’ve started down this path, you’ll gain a sense of peace about your money.  You’ll also begin to see the wisdom in your choices and experience the freedom of being financially independent!

What are you waiting for?

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Popular strategies for achieving financial freedom

It seems that people have different ideas in mind for funding their retirement.  Let’s take a look at a few that appear popular.

1.  Live it up now and hope to get lucky later

In America, this one seems very prevalent.  I have heard it expressed as, “Why should I scrimp and save while I’m young?  I’d rather live it up while I can still enjoy it.”  Spending even well beyond one’s means is very typical.

Of course, life expectancy continues to grow higher and higher.  The average life expectancy reached a record high of 78.1 years in 2006.  Who is going to take care of these folks in their old age if they don’t prepare?

I guess this group hopes to hit a financial gold mine one day.  They must hope to get lucky by winning the lottery, collecting a large inheritance, or receiving some other large windfall.  What other hope do they have?

2.  Get rich quick with a brilliant business or investment

Many entrepreneurs and investors jump from one thing to the next in a heated pursuit of the next popular idea.  They keep hoping to strike it rich in one brilliant move.  If the money doesn’t come shortly, then they ditch it and move on.

The problem with this strategy is that so much money goes to waste.  There is always a start-up cost or initial investment involved.  However, because this group rarely sticks it out, they generally lose their money.

When I was growing up, my stepdad was one such person.  He was constantly starting a new business hoping to ramp it up and sell it for a fortune.  Obviously, there are people that have made money this way, but I think the failures far outweigh the success stories.

3.  It is impossible so I’m not going to try

It seems some people have given up before they’ve even tried.  They believe it is impossible to create margin enough in their lives to save a dime.  They feel trapped and want to blame everyone else for their failings.

I know it is very difficult to make ends meet for some families today.  However, I also believe those that are stubborn and persistent can get ahead.  It definitely takes time and a lot of work, but for me, I’d rather face the difficulty now so I can retire with some financial security.

I’m not the type to just give up so I have a hard time understanding this mentality.  I’ve seen it and I’ve got people pretty close to me that have adopted this way of thinking, but I still don’t get it.

4.  Slow and steady savings over the long-term

This last group embraces a modest lifestyle, gradually builds their income, lives below their means, invests a regular amount each month, and stays the course for many years.  The ebb and flow of the markets, economy, political environment, and popular opinion rarely effect them greatly.  They are not quick to change their plans.

Some feel like these people make too many sacrifices all their lives.  They think this group is boring and never enjoys anything really nice.  It is said, they are always living for tomorrow instead of today.

In my experience, these are the only people that ever really win financially.  They are the only ones that accumulate any wealth and hang on to to it.  They are the ones you see traveling abroad or driving across the country in a big RV once they are retired.  This is the strategy I’ve chosen and that I continue to promote.

Which strategy are you pursuing right now?

Achieving financial freedom at any age takes discipline and planning.  It takes a commitment.  Which of the strategies above most closely matches what you are doing today with your money?  Do you have a plan?  Are you following it? 

Retirement will be here before you know it.  It is amazing how fast time flies.  It takes years to accumulate enough money to retire comfortably.  It is time to start working earnestly so you can cross the finish line to financial freedom!

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“My attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody. I think when you spread the wealth around, it’s good for everybody.” ~ Barack Obama

Wealth redistribution is a subject that I just don’t get.  Maybe somebody can explain it to me.  How is it fair to take money from people that have rightfully earned it and give it to others who did nothing for it?  Will this really improve anything?  Apparently, Barack Obama thinks so.

I know that I’m venturing off into dangerous territory here because many will think that I’m slipping off into politics.  I’m really not.  This has nothing to do with Democrats or Republicans.  I really just want to make the point that we are not a socialistic society.  I want to protect our individual right to earn and give our money as we see fit. 

We are empathetic to people’s needs, but the majority in this country have always believed in the basic premise that “if you want to eat, you should work.”  Is it callous and cold-hearted to believe people should pull their own weight?

The government should not redistribute our wealth

Doesn’t it scare you even a little to think that our government could get involved to a larger degree in spreading our money to others?  I mean we already do this in a lot of ways. 

All social programs including social security, unemployment, and welfare collect your money in the form of taxes and then redistribute it to others.  Generally, helping a neighbor down on his luck or that has worked and contributed to the common good his entire life is not a bad thing.  However, doesn’t it seem we have created a whole segment of the population that feels entitled to these benefits now?  I’m not a fan of creating more of the same.

I don’t think we want to pay the 40% plus tax rates that are found in many countries that use the wealth redistribution approach.  This is the way it is in countries like Germany, Belgium and Denmark where they have universal healthcare and many other such programs.  Is this really what we want?

Of course, a large part of our taxes are spent on good things.  The government uses much of our tax dollars to pay for things like roads, the military, law enforcement, etc.  These programs benefit us all and I’m sure we want to continue these.  I’m certainly not against working together for a better country.  Again, I just think we all need to pull our own load.  Is this wrong?

I don’t see why a person that has spent their blood, sweat and tears building up a business over his/her lifetime should now be penalized because they’ve accumulated a nice income and a pile of cash in the bank.  Is my thinking wrong on this?

It is not wrong to be rich!

Where did some people get the idea that it is wrong to accumulate wealth?  The power, influence, and status this country has enjoyed for many years is largely a result of our wealth.  Having the freedom to own land and be rich is a right that we fought to get.

I know that some people have gone wrong and become overly greedy.  I don’t like hearing about CEOs of failing companies getting rich off the deal anymore than anyone else does.  However, we deserve a reminder that people at all economic levels make mistakes and fall to greed.  There is no reason to throw out the baby with the bath water!  There are some very generous rich people out there doing good things with their money.  It isn’t wrong to have wealth or want it, is it?

I don’t understand why some people automatically think negatively of people that have money.  Money is not dirty.  It is not wrong to have it.  Could the problem be envy?  I know I have thought negatively of others just because I was jealous of what they’ve achieved.  Of course, this is no reason that their stuff should be taken from them and given to me.  Do you think rich people deserve some sort of economic penalty for their achievement?

Let’s encourage people to work and build businesses

There is still opportunity in America to work and achieve success.  It is still possible to succeed by starting with hardly anything and without knowing anyone of influence.  It just takes work. 

The problem is that many people do not want to work.  Doesn’t it seem like they’d rather wait for the government to take care of them?  Why should my hard earned money be taken from me via programs that I don’t agree with and given to others that aren’t working?  Will this really lead to a better America?

It seems to me that instead of redistributing wealth, we should be encouraging people to start their own businesses.  We should give breaks to the regular guy that shows up from 9 to 5 everyday of his life and works hard to put food on the table for his family.  This is the majority of America.

We are a country of people that aren’t afraid to work.  We are innovative, resourceful, and proud.  In fact, I hope we are still too proud to take undeserved handouts.  I hope we still believe in an honest day’s wages for an honest day’s work.  I hope we still believe in the freedoms we have fought so hard to get.  No matter who we elect as President, I hope we choose to preserve the opportunities that have made America great!

“If there is anything which it is the duty of the whole people to never entrust to any hands but their own — that thing is the preservation of their own liberties and institutions.” ~ Abraham Lincoln

What am I missing about Senator Obama’s plan to spread the wealth around?

Photo by Simon Davison

A lot of people that are truly successful with money live a debt-free lifestyle.  If they do borrow money, they pay off the debt early to lower risk and avoid paying interest.  In order to become more financially successful, let’s set a goal to become debt-free.

This may seem like a very audacious goal, but it is achievable and in probably less time than you think.  I know because my wife and I paid off all our debt except our mortgage earlier this year.  So, I can personally testify that this is possible for the average person to become debt-free.

The advantages of debt-free living.

There are numerous advantages to living a debt-free lifestyle.  Before you commit yourself to any goal, it is important that you understand why it is necessary.  Therefore, I want to highlight a few reasons that you should firmly decide right now to pay off all your debt.

1.  Being debt-free lowers financial stress.

Do you feel nervous about your financial position?  Do you start sweating profusely or have to down antacids by the handful every month when the bills arrive?  If so, then you are a prime candidate for considering a debt-free lifestyle.  Is it all really worth it?  Wouldn’t it be better to hunker down, pay off your debt, and eliminate the source of your stress?  Why live this way?

I can tell you that living without debt is a lot better way to live.  It ends the emotional roller coaster which alone significantly increases one’s quality of life.

2.  Being debt-free lowers your financial risk.

Debt is risky because you commit to paying it back on time or agree to suffer some prearranged consequences.  The consequences may include things like paying penalties, incurring higher interest rates, and/or forfeiting your collateral.  If you pay cash up front for purchases, you totally eliminate this financial risk.

With debt you have a greater potential downside if you lose your job, suffer a personal disaster, or encounter a serious health issue.  Why take the risk?

3.  Being debt-free opens up your options.

Debt is a trap that limits your choices.  You are tied to paying it off one way or another.  It becomes a ball and chain that robs you of your freedom.  Once you have a pile of debt, then you have to keep your nose to the grind stone because you lack financial margin.  One little trip up and your whole house of cards is going to come tumbling down.  It doesn’t have to be this way.

Becoming debt-free gives you back control of your life.  It gets the creditors off your back and allows you to make the decisions again.

Debt myths revealed and lies exposed.

There are numerous falsehoods that exist and are perpetrated by institutions that make a profit by charging consumers interest on loans.  It is important that we first recognize and debunk these myths before we can embrace a debt-free lifestyle.

1.  Debt is not the path to a better life.

Banks and financial institutions have done a fantastic job of selling us on the idea that credit cards, home equity lines of credit and car loans give us financial power.  This is simply not true.  What this debt does is line their pockets with profits.  We’ve all enjoyed the “priceless” MasterCard commercials, but it is time to realize that true financial freedom comes from being debt-free not charging items we cannot afford!

Do you want to continue taking financial advice from people that need the government to bailout their businesses because they’re broke?  Not me!

2.  Debt is not a tool.

Okay, debt is a tool.  It is a tool to make bankers rich, but it is not a tool to make you rich (unless you are a banker)!  I think the financial industry has recently proven that you cannot borrow money from one place, invest it in another and make it work for the long-term.  It is just too risky.  This will get you in a bind and fast. 

Just take a look at all the people that took out adjustable-rate or balloon mortgages.  They borrowed money, invested it in a house they couldn’t afford and bet that they could refinance it before the day of reckoning.  It was a gamble and they lost.  This is not the way to win with money.

3.  Debt is not inevitable.

Many of us were raised to believe that the way to get what you want was by using debt.  We saw our parents buy things on credit cards and other consumer loans.  We grew up thinking that a car payment was just a way of life.  We were trained for instant gratification.  When you want something, just whip out the plastic and get it.  Of course, this has caught up with many of us over the years. 

It is time to realize that debt is not inevitable.  It is possible to live without it.  We can do what our grandparents or great grandparents did.  We can wait until we have the money before we buy things.  I know it is a radical idea, but one whose time has come.

4.  Debt-free does not mean fun-free.

I think that some people believe that the only way to enjoy life is by living beyond their means.  Have you ever listened to Dave Ramsey’s radio show?  Do the people that call in seeking his advice because they are drowning in debt sound like they are having fun?  No!  It is just the opposite.  I never get enough of hearing the calls where people are calling in to celebrate their freedom from debt!  You can hear the joy and relief in their voices. 

Becoming debt-free opens up your life to happiness and prosperity like you’ve never experienced!  When was the last time that you were debt-free?  Were you happier then?

Get on the right path to financial freedom!

Nugget of financial wisdom: True financial freedom begins when you become debt-free and start living within your means.

You really need to grasp the truth above if you want to win with money.  Over the next several days, I will lead you through the steps to achieving financial freedom from debt.  However, unless you embrace the ideas I have written about here as the absolute truth, then it is very unlikely that you will succeed with money.  Ninety percent of what determines your financial success lies in your attitude toward money.  Once you acknowledge this basic financial principle, then you are well on your way to financial freedom!

What are your thoughts about debt and becoming debt-free?  I’d love to hear from you.  Please leave a comment below with your opinion.

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