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