Financial Freedom – Part 2:Principles of Wealth Generation

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Last week we began our five-part series on Financial Freedom by questioning our perception of wealth. It’s no puzzle that how we are raised, along with the financial values of our parents and surroundings have a way of rubbing off on us. Whether you were privy to those dinner table conversations about banking and finance or was forced to learn off the cuff, the way we manage our wealth is a direct descendant of what we have been exposed to.

There’s an old adage, Knowledge is Power; but, I’d like to take it one step further and challenge your belief in this. How powerful are we really if (1) we don’t know what we don’t know, and (2) if we don’t utilize what we know? While next week, in Part Three we will address the practical application: maintaining and preserving our wealth, today’s Money Issues blog will focus on Part Two: the principles of wealth generation. Simply because you cannot be held accountable for not knowing what you don’t know; or even how to apply it. And yes Keepers, with this one, I am going to make the fair assumption that we are all on an even playing field, well… purely for no other reason than for the sake of our community and to “level up”.

 

Be disciplined – Wealth is a cumulative result of many things added together and compounded over a lifetime. Think about what happens to our children (or anyone’s for that matter) when they lack discipline. The failure of this often results in children that are resentful, unhappy, and lacking the tools necessary to navigate through life challenges and relationships. The same goes for us while in the process of building wealth; without financial discipline, we can grow into resentful, unhappy adults – eventually unable to navigate through life’s challenges.

But just as important as whether or not we are disciplined, is how we discipline ourselves.  

I used to think that as long as I wrote every goal down that I would somehow keep up with them and accomplish them. But, what had happened was, I began to become so overwhelmed with what I thought I had to do today instead of what actually made sense for my wealth plan. Realistically, wealth is a form of delayed gratification. Not only do those who are in the process of building wealth practice spending less than they can afford, but they also spend less in energy and time with the understanding that energy and time is just as valuable as your present-day financial resources. This, here, is where we begin to work smarter, not harder.

Working smarter is all about applying one key principle: Leverage. To leverage is to use (something) to maximum advantage. I repeat MAXIMUM advantage. As I mentioned, time is just as valuable as your money – and if we do the math, 1 person and 24 hours in the day is not nearly enough capacity to build sustainable wealth; I don’t care how much vibranium you have. I know – Wakanda forever, and I completely stand in agreement with you… but, we’re trying to get to a point of Wealth forever. Same time man, same time (in my Chris Tucker voice).

So, what type of things can be leveraged? (1) Our finances – utilizing other financial resources, such as banks, economic development centers, and grants can free up your personal limitation (2) Your network – the resources of others provides direct expansion of your own (3) Knowledge of others – tapping into the expertise and talent of others exponentially increases opportunity; not to mention time and technology.

For quite some time I was dead set on focusing on the other 8 hours alone (8 hours of my full-time job, 8 hours of rest – who does that?, and the “extra” 8 hours left). Of course, I got burnt out very quickly; I know I’m not the only person who has a habit of burning the candle at both ends.

Take a deep breath. Now, repeat after me: LEVERAGE.

Lastly, many advise to treat your wealth like a business and have a formal plan. There are proven business principles that lead to success, discipline and accountability, accuracy in spending patterns, leveraging and competitive advantage – conditions that make you better than your opponent. And for the record, your opponent is not your homeboy, not your girl, not your neighbor – it’s your present self-versus your future self.

Keepers, wealth happens because you do what it takes to make wealth happen.

If you grew up anywhere near my family, you might’ve often been reminded that money doesn’t grow on trees. And the same goes for wealth; most of us don’t just wake up with an abundance of wealth at our fingertips.

Being wealthy requires knowledge, precise decision making, and an understanding of how to protect what you’ve worked hard for. Now, this is one apple I’m sure your children’s children wouldn’t mind falling far from the tree.

Start today, persist tomorrow.

Drea

Photo Source: Pixabay

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