What’s the secret to financial freedom?
Replacing bad habits with good habits is the simplest way to a wealthy life.
And right now is a good time for us to change our habits and our mindsets.
Millennial earnings are low compared to median wages — lower than Gen-Xers or Baby Boomers when they were early in their careers. They’re worth half what their parents wages were at the same age.
This generation is taking over the workforce at a time when pensions and other retirement benefits are on the decline and income inequality is at staggering highs. While 27% of older millennial’s in a Bank of America survey reported saving for their children’s education, most of them are likely still paying off their own student debt.
Monsieur Millennial has been through it. With these learning’s, we’ve put together a step by step financial wealth guide. From financial debt to compounding money while you sleep. Let us be your financial wealth coach.
Understand Your Financial Life Goals
To begin, we need to need to look inward. Building a solid financial habits takes discipline and a whole lotta self-awareness.
To stay disciplined you need to define your personal “why” (aka. Purpose) and establish your goals.
When the going get’s tough, these goals keep you going.
Goal setting is never fun. Personally, I tend to fall behind, forget to evaluate progress and just flat out fail. But that’s the joy of this journey, the financial wealth journey. The more you enjoy the journey the better off your future will be.
So where to begin.
Start by setting both macro goals and micro goals. When going macro, it’s important to go big. Think 15 to 30 years out and have fun. Don’t take this part lightly. It is your future after all.
Second, when you begin to break down the micro goals. It’s best to stay focused, get specific and hold yourself accountable.
If you take to heart the above and work on setting your goals. You will be in control of your life. Ready for any obstacle and able to stay grounded during the hard times. You’ll be further ahead that 99% of the world (self defined percentage).
Some Financial Ideas
- F.I.R.E – Financial Independence Retire Early
- F.I – Financial Independence
- A dream home
- A life of luxury
- A safety net
- Buying an investment property
- Having extra money to invest
So, what does it look like to actually establish ones goals?
An Example of Establishing Your Purpose
Set a Lofty Macro Goal
For example, perhaps you want to save for your 2 years old college. 16 years out is a perfect macro goal for you to reach. It set’s a date, but we still need to figure out an end goal metric we can track.
Understand Your Macro Number
Next up, work the problem backward. College in 16 years will cost $303,000. Wow, I just googled that. I’ve now decided to not pay for my future kids school. We’ll let future him or her figure that out – just like I did.
Break Down Your Micro Habits
So, let’s assume an average market return of 7% over 16 years and break $303,000 into what a monthly payment would look like. The answer turns out to be about $905 dollars a month. From $0 to $303,000 in 16 years.
Remember Your Financial Purpose
First off, that’s pretty insane. But, when in doubt, focus on the small wins and your long term goals. We know… it’s hard to prioritize between the expensive vacation, the next car or your kids future that’s so far in the future.
When you remember what you are saving for. When you focus saving for that bigger purpose. You make it easy on yourself to skip the $600 dollar car loan payment. You head to the mechanic instead (or better yet, YouTube and O’Reilly Auto parts).
Stay focused, limit your goals and remember why your doing this.
Just like our time on this plant. We all have a cap to our lifetime earnings.
Where those earnings go are a game of prioritization. Every day this world will try to take our money. Remembering what is important and what brings joy should direct by where you money goes.
Let’s not just run on autopilot.
To avoid running on autopilot, remember (or read) Gary Keller’s book The ONE Thing: “To be precise, the word is priority, not priorities, and it originated in the 14th century from the Latin prior meaning FIRST.”
Once you realize that the word priority should not be plural, you’ll gain victory over all areas of your life. Including building a habit of directing your money to work for you.
Build A Money Mindset
I ran on autopilot myself, like so many others. Being told to head to school and learn a bit of everything. Then, head off to college and specialize in a skillset. Finally, find your career, love your career and retire.
Then when day. I realized something about the myth of a career.
I uncovered a misdirected belief innate in our psyche. That building a career should be our focus, our goal and even our purpose.
Not true. Not to me anywho.
What did I switch my mindset to?
Stop focusing on our careers to make money.
Focus on making a career out of your money.
Jobs change, peoples passions change and careers progress. We specialize in our roles and reach a monetary point of no return. Then, we feel stuck and start counting down the years until retirement.
We spend our money in the early years of working on supporting our career. Buying clothes, moving to expensive locations for the job and wasting money to fit in.
We must recognize that a job (previously known as a career) is just one way to make money.
We are taught and incorrect way value of money from the get go.
If you think about money as your career, you build a special relationship with money. You begin realizing that it’s important to learn about money management and your financial wealth.
With this small change we can begin to change our financial mindset. We begin to see other ways to build a career on money. Discovering multiple ways to bring income into your growing career of money.
Soon, you’ll start putting systems into place to help grow your money. Instead of planting seeds in different working relationships in hopes of job progression, you begin to plant seeds in various income streams.
So, with a stable set of goals and principles you’ll have the strength to form new mental habits. Once you are ready, you can start taking action on your first dollar.
That’s your priority.
Now that you know the secret to financial freedom, let’s move on to Phase one – Building financial habits to get control of your debt.
