SO YOU WANT TO LEAVE HOME, HUH?

 A blueprint to financially making it in the cold cruel unforgiving world

What every child should know…. For that matter, what every adult should know

 So, you’re fed up with the repressive Mom and Pop regime and you’re ready to make it on your own?  After all what gives those evil parent-type Gestapo twins the right to make you do their bidding?  “Clean your room, do your homework, pick up your stuff, be home by twelve, you’re not wearing that” and other vile commands carefully designed to drive you to the brink of insanity and disembowel any hope of independence you might have.

Your parents were never really your age. That’s just a bit of fiction they invented to coax you to ‘tow the line.’  They were hatched fully-grown from since extinct dinosaurs. They missed all their formative years. They learned nothing.  Whatever values they have somehow acquired are oooold and outdated.  And, they have the audacity to try to cram that nonsense down your throat.

Who needs it?  Maybe it’s time to exit that torture chamber and enter a new one of your own making.  Maybe it’s time to enter the real world.  Things have got to be better.  You’re a whole lot smarter than those two ancient relics calling the shots now. 

Whoa ……Junior, you might want to slow down a bit.  Unless you want to make an embarrassing belly flop and end up with your bottom on the doorstep of your old abode broke, embittered and seriously red faced, it might behoove you to do a little homework on the ‘moving out’ thing.

Winging it might be fine for that history test you didn’t study for, but you can’t win the financial game of life by merely penning the answers on the sleeve of your shirt or the elastic band of your boxer shorts. You, my fledgling friend, need to have a bit of guidance and maybe do a we bit more planning before you hit the door running.

Grade schools, middle schools, high schools and even colleges dole out a massive amount of knowledge that has to be digested, memorized and regurgitated.  But, why in God’s green earth do they omit the most critical aspect of your education, REAL world financial values and basic money management?  Why don’t most parents teach their children financial literacy?  In many cases, I think it’s because they know little themselves, relegating another generation to the ‘school of hard knocks’ for their education. Ignorance begets ignorance. 

Financial values, properly administered, will be a key element in determining your happiness and independence.  Without them you will fall flat on your face.  Or, if you’re a little luckier, you will merely trade your benevolent dictatorship for a lifetime of back- breaking enslavement. You will become subservient to new masters who will use up your energy to fuel their enterprises in exchange for letting you out of your cage for one or two days a week, with just enough money to keep you coming back year after year, until you are no longer useful.  Then you will be put out to pasture to live your remaining years on a subsistence of social security and whatever you may have scraped together.  That’s not a life.  You can do much better.

It’s time to learn some rules.  Four of them to be exact.  Not some empty platitudes guaranteed to put you to sleep faster than Mrs. Dweeeeb’s sex-ed class or Mr. Duffus’s essay on The Rise And Fall Of Those Romans in Skirts, but real meaty stuff that will put some coin in your pocket and keep it there.

Let’s start with a few basic truths. Firstly, your days of being coddled are over.  No one will care for you like Mom or Dad.  Few people will set their interests ahead of yours.

Rule Number One To Managing Money is; Don’t Lose Money.  It’s up to you to look out for yourself. It’s unlikely that your boss, car salesman, new home realtor, mortgage broker, apartment manager, financial advisor or anyone else in your life will truly have an unbiased concern for your well being.  To think otherwise is a recipe for disaster.  Your naivety will make you easy prey for those who wish to use you for their ends.  Most people will cater to their own self-interest and if yours conflicts, that’s just tooooo bad. You’re just scr____ed.

That means, look out.  People can appear to be your best friend and still have designs on your pocketbook.  Keep your skepticism in tact, brain engaged and hand on your wallet.  Watch out for that nice car salesman who smiles and sticks you with an overpriced car at a ridiculous rate of interest.  Be on guard for the apartment manger who suggests you to sign that ‘standard’ lease without reading it.  Look out for the realtor that sells you more home than you can afford in a poor area destined to go down in value.  Keep both eyes on that mortgage broker who promises you one rate of interest only later to raise it due to ‘circumstances’.  Hold a magnifying glass to that broker who pushes you into investing in poorly performing mutual funds that have high fees and even higher commissions for him.

Rule Number Two.  Serve Others.   Contribute To Society. You will only achieve abundant success by giving more than you get.  In the long run, which usually isn’t that long, you’ll end up receiving much more than you give. Your work ethic will be your key to success or failure.  This isn’t donkey dung.  This isn’t some textbook, holy roller, do good philosophy.  This stuff really works.  Guaranteed.  You can literally ‘take it to the bank.’ If you remember nothing else written here, remember this.  It will be worth a fortune to you. Cut this out.  Paste it on your bathroom mirror so you see it first thing in the morning and last thing at night.

It seems cool to many in today’s culture to boast of how little they do to get by at school or at work.  They like to think they have taken advantage of the powers that be.  They’ve gotten the better of their teachers or some big faceless company by doing less than is required. They’re clever as clever can be.

What they have done is shoot themselves in the foot.  You can fool some of the people some of the time, but when you are caught, and you will be, everything you have done up to that point will be suspect, the good along with the bad.  You will be branded.  All your good work will be for naught. Your future will be dim. 

If you have to be at school or work anyway, why not do the best you can?  Why not have some fun by excelling?  Why sabotage your efforts?  Why shortchange your future?  Why not serve others and serve yourself in the process?

Hard workers who do everything they can to make their boss’s job easier and to further the interest of their companies and customers will prosper well in excess of their time commitment.  The whiners and clock-watchers will always be on the verge of unemployment, the first to go when their industry hits even the slightest downturn. They will watch younger less experienced employees skate past them up the corporate ladder.

Hey, and even if you put in a lot of time and are still un-rewarded, you’ll still win. It will only be a temporary lapse in route to an even bigger reward. You’ll be able to let all that great experience, confidence and superb recommendations propel you into a job at a competitor where your talents will be appreciated. Hard smart workers are always in high demand. Truly dedicated employees are very, very hard to find.  If you possess those qualities you will ALWAYS have a good job that pays well.  You will be a rarity, admired by your peers and cherished by employers far and wide, even during the worst of times. Everyone will be in awe of the luck you have and the amount of money you make.

Good workers will be the ones retiring early and living in relative luxury, while those oh so clever slackers (who thought they had beaten the system) will be the ones toiling at   job after pitiful job until they retire.  Then they can look forward to their remaining years watching television and complaining of their meager social security cost of living adjustment.  Worse yet, you may hear them saying; “Welcome to W__mart” or “Would you like fries with that?”

Better yet, work for yourself.  Accumulate some capital from your good job (college isn’t necessary, but it sure make’s it a lot easier) and then when the time is right, strike out on your own.  After all, if you weren’t a profitable commodity, one at which your employer could make money with, in and above your salary, you wouldn’t be employed very long, would you?  So, why not earn your wages and keep that profit differential for yourself. Conversely, if you’re the ‘slacker’ type, you’ll be better off staying in an obscure area of a large bloated corporation where your lack of efforts will go unnoticed until it and you are dinosaured into oblivion.

Even better yet, if you’re the creative type, you can excel beyond belief. Find a need, create a better service or product to fulfill that need and market it.  Learn to serve others and you will always serve yourself spiritually and materially in the process. 

Businesses created by those innovative souls that develop new products to fulfill a need are the epitome of the American dream and the way to MASSIVE fortunes, often beyond comprehension, with returns well in excess of the effort put forth.  You will profit in direct proportion to service you provide to others. 

If you were the first to develop a weed eater out of an old tin can and some fishing line, perfect it and market it to people who use it by the millions and millions to give them more time in their lives, then you would have been rewarded with hundreds of millions for your effort.  If you implemented a computer operating system that revolutionized the way people used information, you might end up as the world’s richest geek.  The service you provide your fellow men and women will be multiplied exponentially in proportion to the value and number of people served.  Widespread needs yield widespread returns for your time and effort.  Your accomplishments benefit you and substantially contribute to society, a win-win situation. 

Rule Number Three: Avoid consumer debt. The absolute worst thing you can do to sabotage your chances for financial freedom is to incur debt for personal items.  If you can’t afford to save for it, you sure as heck can’t afford to pay for it, after the fact, along with the interest incurred.  You’re paying a premium to buy items that do nothing but go down in value.  There is nothing more demoralizing than realizing that you owe more on an asset than it is worth. 

More importantly, you’re setting a dangerous precedent when you spend money you don’t have.  Do it once and it becomes easier to do it again and again until it gets out of control and debt rules your life.  You’re not only not getting ahead, but worse yet, you’re digging yourself a hole you’ll have to claw your way out just to break even.  I suspect the credit companies like to keep your finances just barely on the cusp of affordability so that you’ll continue to pay their high rates of interest and penalties.  Don’t fall prey to their tactics.  

I know this is not the conventional way of thinking.  In America we’ve seen an explosion of personal debt and the ensuing and pending financial problems.  It seems everyone wants today what he or she think they’ll be able to afford tomorrow.  Our forefathers would be ashamed of the ‘give me today, I’ll pay for it tomorrow’ philosophy so many of us have. What ever happened to the ‘work for it and pay for it’ philosophy?

Even large ticket items don’t justify financing.  Cars, boats, trailers, and RV’s should always be paid for in cash.  Buy what you can afford to pay for in cash, not what a salesman tells you they will finance. Buy pre-owned and save that huge bite that depreciation takes out of the value of a new purchase.  Better yet, skip the purchase entirely until you’ve reached financial independence.  Then you can afford to spend some of your abundant excess on frivolous items. Depleting your productive assets before that point will only stymie your growth.

Debt has its’ place, but not for personal items that are either used up or go down in value.  Use debt to purchase a business, assets that produce income or real estate at the right price.  This can be very productive.  The leverage that financing brings then allows you to acquire assets that go up in value, magnifying your ability to increase your worth.  Any other use is counterproductive.

Rule Number Four: Run your life just like you would a small business. Focus on your income and expenses. Find a spare room or a desk in a corner of a room where you can manage ‘You, Inc.’ Plot and scheme your financial independence from your little corner of the world.  It’s fun.  It’s liberating.  Plan how you’re going to increase your income.  Plan how you’re going to reduce your expenses.

There’s 101 known ways to save money on any given expenditure. Identify them and add numbers 102 and 103 while you’re at it.  Even if you’re only the semi-ambitious type, you can still do quite well by simply earning an average wage and effectively managing your expenditures.  This is the safe and easy way to making a small fortune.  No fuss.  No muss. No risk taking.

There is absolutely no reason why anyone living in America today should have to work his or her whole life if they manage their money properly, regardless of their job or educational level.  In fact, if you’re clever enough and put into effect the right values, you should be able to retire early, way early and enjoy the kind of independence that most of us are looking for. Until you do this, you will not achieve freedom.  You will only trade one form of servitude for another. 

The key to rapid accumulation of capital and success is to live below your means. You must do everything you can to escalate your income while maintaining and reducing your cost of living. Avoid the temptation to keep up with the Jones’s.  If you can forgo many of those so-called necessities, which really aren’t necessary, you’ll eventually leave the Jones’s and their brethren in the dust.  Once you’re ‘established’, you’ll have all the extra money you’ll need to buy most of what you want guilt-free from the excess you have accumulated. When you prematurely spend your excess capital, you stunt your growth. When you live below your means, your worth grows rapidly.

Many people have a big misconception regarding those of wealth. They assume they’re self indulgent and prone to living extravagantly. Nothing could be further from the truth. Most people wouldn’t recognize your average millionaire.  He or she probably lives more frugally than they do.  They often live in moderate homes, driving cars several years old, while chasing down the best bargains in town.  The ‘wanna-bees’ are often the imposters running around sporting fancy clothes, watches and rolls of bills designed to impress today and impoverish tomorrow.

Those who have worked to achieve success often have conservative values, the same values that brought them the substance they enjoy today. They have worked smart and hard to get where they are, often sacrificing much of what others deem basic necessities.  I’ve seen many successful people who haven’t been to the cinema or bought new clothes in years because they’re too busy building their businesses or careers.

Even those who do display wealth, typically do it after they have accomplished their goals and can easily afford to enjoy their rewards.  They did not achieve their status by prematurely indulging their whims or by living beyond their means. This only diverts needed growth capital to wasted assets. Others viewing their nice home or beautiful boat don’t see the work and sacrifice that led up to its attainment. The ‘wanna-bees’ often choose to emulate the spoils of the wealthy before they have put forth the effort and achieved the results. You cannot spend your way to wealth. You won’t become rich by overindulging. That is a recipe for poverty and despair.

Unfortunately, many people believe that to become rich you have to act rich.  They go into debt to impress their friends and neighbors with possessions well in excess of their means.  That is the worst possible, most unproductive thing that you can do. Instead, what they should be doing is forgoing as many luxuries as possible and putting the money saved to work building up their net worth. That capital will then replace the income generated from their daily grind.  More income without work brings freedom to enjoy more of what life has to offer.  That is the real benefit of wealth.

You don’t have to wait forever to begin to enjoy the fruits of your labor. An amazing thing happens when you start to accumulate capital.  You begin to feel wealthy. You become more self-confident. That self-confidence breeds self-respect and the respect of your co-workers, employer and associates.  You’re no longer one of the ‘schmucks’ of the world, but rather an up and coming person of substance who can’t be ruled and controlled by others.  You’re on the road to independence. This opens up opportunities previously not available to you.

The rewards of being a person of ‘substance’ far exceed the rewards of ‘faking it’ by living beyond your means. When you over extend yourself you’re a fraud.  You and everyone else know it.  When you’re a ‘tightwad’, but sport an impressive financial statement, you’re merely ‘eccentric.’  You’ve reached a point of success that you and others will admire.

So, how do you live beneath our means?  How do you rapidly accumulate wealth?

The easiest way to financial independence, and wealth if you so choose, is to let your income rise, while holding the line on spending.  Once you make enough money to get past your break-even point, where your income meets your expenses, all that money goes into your ‘financial freedom pot.’  If you let that money flow into your ‘pot’ and don’t tamper with it, that ‘pot’ will rapidly increase in value and give you the means to live free of financial constraints.

Unfortunately, most people let a small fortune slip through their fingers.  They just can’t resist that temptation to spend that ‘extra money’ that comes into their life as their careers progress.  They escalate their spending in concert with their increased income and never get ahead.  Worse yet, they assume that they’re ‘entitled’ to more than they make and dig themselves into a hole of debt. 

I know finances and planning for the future sounds booooooring, especially at your age when you’re darn sure you’re going to live forever, but there are two things that should capture your attention, ‘standard of living’ and ‘freedom’.  Most of us want the best standard of living we can.  We want a nice home, car, clothes and fun vacations.  Careful money management will bring that.  Even if you’re content with minimal possessions, the freedom that money can bring should hold your interest.

So, how do you manage your money?  It’s pretty simple really.  You find out how much you’ve got coming in, where it has to go and then you massage it till you squeeze the most you can out of it. You want to bring in as much money as you can and, just as importantly, you want to keep as much of that hard earned money as possible.  This is where you start on our road to success and freedom.

Freedom and security are your goals.  Everything you do will bring you closer to these goals.  Remember; until you have achieved financial independence your servitude will never really end.  You’ll just be a slave to one ‘master’ or another.

So let’s start with a summary of your income and expenses.  You can’t begin the process of managing your money until you understand where your money is coming from and going to.  This will also tell you how practical the idea of moving out is and how to best structure your costs to be successful.

This is reality. Dreaming is fine.  We all must have dreams.  We all should fulfill our dreams.  But, you can’t get from ‘here’ to ‘there’ without some kind of a plan.  And, you can’t get ‘there’ by deluding yourself with false assumptions.  By putting actual numbers down on paper, you take your plan from the dream stage into the reality stage.  You provide yourself with a blueprint for success.

Listed below is an example of a typical monthly income and expense summary of someone just starting out with a minimal education. Your numbers might be higher or lower depending upon your profession, level of education, cost of living, personal preferences and most importantly, ability to manage your money. (Of course, if you happen to be subsisting on a very large trust fund, you can either skip the rest of this article or call to offer me an expense paid consultation in London, Paris or Prague.  I’ll let you choose.)

more>>>