Sunday, August 25, 2013

How to Become Financially Independent by Jim Rohn


How to Become Financially Independent

Presented by Jim Rohn

 

Mr. Shoate (Rohn’s mentor) told him when he was 25, “Mr. Rohn in my own opinion financial independence is a worthy goal.”

 

The reason he said this is because some people have an internal moral struggle with making a lot of money.

 

Once you get money out of the way, you can’t believe the other dimensions of your life you can work on.

 

If you could do better, should you?  Some use the moral question as an excuse.

 

Challenge yourself to see what you can become.  It’s not the amount that counts….its the extent of the reach that counts.  You should employ the full extent of your reach.  If you make $50,000 per year and you are capable of $500,000; you are a loser.  You must extend your mental personal capacity to its limit.

 

Mr. Shoate had a simple philosophy on this.

 

            How far should you go?                     As far as you can.

            How much should you learn?             As much as you can.

            How many books should you read?   As many as you can.

            How much should you earn?              As much as you can.

            How much should you share?             As much as you can.

            What should you accomplish?            As much as you can.

 

What could I do in comparison to what I am doing?

What could I do to extend my reach?

Am I fully employed?

 

The only way you can get money out of the way is to have plenty.

 

The time you’ve already set aside for labor is enough time to become wealthy.  If you are working 8 or 10 hours a day that’s about it, you can’t put in more.  But, if you better utilize that 8 or 10 and double or triple your income that would be o.k.

 

Working more and putting aside health, family, friends is short changing your self.

 

Financial independence is dependent upon the plan you have.

 

KEY:  It’s so much as what you earn, it’s what you do with what you earn.

 

The average person in the United States in their lifetime makes a half million dollars.  The question after that lifetime is where is it?  Some keep it, others don’t.

A good book to start with on financial independence is George Clason’s The Richest Man in Babylon.

 

The them of  The Richest Man in Babylon is “learn to live on 70% of your net income (after-tax income)”. 

 

The Richest Man in Babylon suggests the following for the other 30% of your net income.

 

Next the book suggests that you learn to be enterprising.  Profits are better than wages.  Be a capitalist.  Turn your income into capital.  Teach your kids how to have two bicycles.  One to ride and one to rent.  Teach your kids how to sell.  Once they make the sale, teach them how to set aside money for capital and money for   

 

            10% should go to charity or tithing.

10% should go to the increase of capital.

            10% for paying off your debts, then once they are paid, use it for investing.

 

           

A few more tips on financial independence.

 

  1. Put together a financial statement.  Assets – Liabilities = Net Worth

                                                              i.      To get to where you want to go, you have to know where you are.

                                                            ii.      You don’t need to share this with anyone, it is for you.  Your first one may not be pretty.

                                                          iii.      Use it like a game.  Get excited about reducing your liabilities and increasing your assets.

                                                          iv.      It’s not the amount that counts but the attitude and the plan.

 

  1. Keep strict accounts.

                                                              i.      You’ve got to know where it all goes.  The Rockefeller’s grandfather made them keep track of every penny they got and where it went. 

                                                            ii.      If your outgo exceeds your income your upkeep becomes your downfall.

 

  1. Participate in capitalism.  Buy and sell something and invest the profits.

 

  1. Get your family involved and excited about your plan.

 

 

Happiness is not contained in what you get but in what you become.

 

Make financial independence a game.


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