Let me tell you some money secrets.
You’ve probably heard the saying that wealth begets wealth. While not true in every situation, the 4% who are Financially Free do teach their kids different money lessons than the 96%. Recently, Makaylah heard me talking with my son about some of those lessons. She sat down alongside us to listen in on our conversation and ask some great questions.
And, because we want everyone—not just the 4%—to know these secrets, we needed to take this opportunity to share them with you too. And to encourage you to share with your kids as well!
So here are just a few of the essential lessons I’m passing along to my kids:
Money Secret #1: Don’t Believe The Lie
As a child, what were you told over and over by the adults in your life? Go to school. Study. Get good grades. Land a job that you love. Once you do that, life will automatically be great.
But it’s a lie.
There are no guarantees you’ll ever be Financially Secure following that life plan.
Before you’re Financially Free, you’re vulnerable.
You depend on your employer for your income, and that requires you to spend your precious time working for every dollar. The 4% know exchanging time for money is a losing game. So sever the link.
Every day, the 96% get dressed and head to work just so they can trade their time for money. But what if you didn’t have to do that? What if you could send your money out to earn more money for you?
The essential key to earning your Freedom is to build your Freedom Generator one piece at a time. Your goal shouldn’t be to sacrifice your time to work in a job that keeps you financially captive. Instead, focus on buying your time back as fast as you possibly can.
Money Secret #2: Give Generously To Your Future Self
For his birthday, my son asked for cash. But he didn’t go out and spend it. He set it aside for the benefit of his future self. Why is that important to note?
Because the 96% prioritize enjoyment of the now. Their focus is creating the best lifestyle they possibly can at this moment. But, in the process, they attach their egos to the stuff they acquire.
Pretty soon, they’re trapped in what they think is a “wealthy” lifestyle but is really an unsustainable fast-track to debilitating debt. They fall victim to their distorted sense of self-worth and their concerns about what their neighbors think about them.
Don’t be afraid to be the weird one on the block.
The one driving a boring, sensible car. The one without the big house, swimming pool and exotic vacations you can’t afford.
Instead of spending lavishly on your present self, pay your future self that money. Use it to build your Freedom Generator as quickly as you possibly can.
Money Secret #3:Focus On Your Freedom Number
Your Freedom Number is incredibly valuable in that it gives you something solid and specific at which you can aim.
Once you know your number, you have a very clear path to Freedom . . . and you can easily track your forward progress. At any given time, you can see how much income your Freedom Generator would produce for you if something happened and you needed to turn it on right now. Would it give you 5% of what you need? 50%?
Mapping your progress lets you see the effect of each building block that goes into the construction of your Generator. And you’ll stay motivated to reach your goal as quickly as possible.
A friend of mine has an incredible way of looking at his progress. He refers to it as buying his way to Freedom one bill at a time. Right now, maybe your Generator would pay you enough just to cover your gas bill. But, down the road, you might have enough income to cover your electric bill too. Then your grocery bill. Eventually, you have enough to pay each of your monthly expenses. And that’s the moment that you’re free.
It’s never too late to put these lessons into practice in your own life. Then share this information with your kids and get them started on the path to Financial Freedom too!
Have you shared with kids what you’ve learned in Financially Fit Bootcamp? If so, how’d it go? If not, when are you planning to? Share your advice or ask questions in the comments below or in the Financial Foundations Community!
This is a sponsored post by Dr. Tony Pennells. The views expressed in this article are their own. To learn more about Dr. Tony, visit our Specialist Panel.
image credit: Bigstock/Wavebreak Media Ltd
Dr. Tony is the co-founder of MindShift.money and the best-selling author of three books on personal and business finances. Having achieved Financial Freedom at 27, Dr. Tony believes that through Financially Fit Bootcamp and Cash Flow Cure everyone can get there. He has made it his life’s mission to help others live a life where their money works for them—not the other way around.