(04702) Michael LeBoeuf says:
Live the Life You Want, Not What Others Expect
There will always be a myriad of other forces that will try to decide for you how you should live. Ignore them all. Instead, choose the life you want first and then select all the other components on the basis they will be compatible with your chosen lifestyle.
Everyone has a voice inside themselves that can provide the answers to two important questions:
1. What do I want out of life?
2. How will I know when I have everything I want?
The more detailed the description you develop of your answers to these two questions, the better. Never leave these questions for others to decide — that will only generate confusion and frustration for you. This is something you have to do for yourself if it is to have any staying power.
The process for translating your dreams into goals is simple:
1. First, make certain the goals you’re working on are genuinely yours, and yours alone.
2. Next, set goals using the BEST formula:
B — your goals need to be high but believable.
E — set goals that energize and enthuse you.
S — be specific about how you define the word “success”.
T — set deadlines, a time when each needs to be achieved.
3. Write down your goals and read them frequently. This increases commitment and forces you to think clearly.
4. Live a balanced life — set goals in all the major areas of life:
Career — something you passionately enjoy doing.
Family — improving your key relationships.
Recreational — the fun stuff you’d like to do.
Health and wellness — preventative maintenance.
Community — how you can contribute to society.
Personal relationship — improving and enjoying these.
Self-esteem — making you feel great about yourself.
Religious / spiritual — strengthening your inner peace.
5. Now, check your goals for compatibility and set your own personal priorities. Make certain that in aggressively pursuing one of your goals, you’re not in fact making it more difficult to achieve another goal.
6. Translate your goals into action plans — the intermediate goals that form a bridge between your daily “To Do” list and your lifetime goals. Most often, action plans are projects that take more than a day and less than a year to complete.
7. Always remember your lifetime goals are not carved in stone. They need to be updated regularly. If circumstances change, drop old goals and add new ones. Remember, the most important thing is to have goals that enthuse you, not the precise goals that you choose.
Make Choices that Stack the Odds in Your Favor
Be aware of the financial consequences of all your life choices — education, career, health, marriage, family size, etc. — and make choices that stack the odds in your favor rather than against you.
Your personal journey to financial independence will be easier if you make smart lifestyle decisions.
1. Get a good education — but don’t go to the more exclusive private universities. They’re just too expensive. Get a sound educational grounding at a reasonable cost.
2. Choose the right career — something, which interests you, makes the most of your talents and gives you a feeling of personal. accomplishment. Make certain your career will fund the lifestyle you want and provide money for investing.
3. Protect your health — by living moderately, exercising regularly and avoiding habits that are bad for you. Without good health, money is pointless.
4. Live in an area with a low cost of living — because it will be much easier to save if you don’t have to pay huge property taxes, home heating costs or enormous mortgage payments.
5. Marry once to a spouse who shares your vision of financial freedom — and who will be prepared to live frugally while you work towards your financial goals.
6. Buy a moderately priced home — one that you can afford to stay in for long enough for property values to rise. Even better, look at buying a fixer-upper and improve it yourself in your spare time.
7. Have a moderate number of children — since each one will have a $175,000 or more drain on your wealth-building program.
In other words, all of these decisions have financial consequences. Be aware of those flow-on effects and manage your financial risks astutely.
Be a Super-Saver Rather Than a Big Spender
The single biggest differentiator between millionaires and others is their ability to save. If you aspire to be financially independent, become a good saver. If you don’t, you simply will not get there.
If you’re in the habit of spending everything you earn, you’ll end up spending your life working for money rather than making money work for you. Actually, saving is better than earning because it’s tax-free. To build wealth, you must have the ability to save.
To become a good saver:
1. Always pay yourself first — by putting at least 10% of every paycheck into your savings program.
2. Start early — because the earlier you start saving, the more time there is available for compound interest to work its magic.
3. Whenever you get a pay raise or a bonus, save more — rather than spending that money on new luxuries.
4. Defer tax as far as possible — through the use of 401(k) accounts and all other legal tax-deferral accounts your employer may sponsor.
5. Harness a Roth IRA — because it allows your money to compound tax-free.
6. Buy 2- to 5-year old cars for cash — and keep them until their maintenance and repair bills start getting too high. Avoid buying new cars because they are terrible financial investments.
7. Pay off all your credit card debts — because they charge 18% or more every year when you carry a balance. Pay your entire credit card bill every month from now on.
8. Document your spending — to highlight areas of unnecessary expenditure. Redirect those resources towards your wealth-building program.
9. Regularly calculate the cost of your lost wealth — what the expensive car, jewelry or lifestyle elements are costing you. Be aware of what that amount of money invested each month in a savings program would generate.
10. Realize that some debt is an excellent investment — that going into debt for a home, a business or an education. Not all debt is created equal.
Increase the Value of Your TIme Consistently
Don’t keep trying to earn more by working longer hours. Instead, make the time you have available worth more. Enhance your personal market value by doing more of what you do well int he time available.
The way to get rich is not to wear you out working hard and longer. Instead, try working smarter.
1. Focus on your employability rather than job security — so you’ll be free to pursue new opportunities as they arise.
2. Learn more about your profession — since earning power in any field is always directly related to how much you know.
3. Create a second income — by doing some part-time consulting or starting your own small business.
4. Make it a habit to always deliver more than you promise — your boss or customer will love it and your reputation and market value will skyrocket in their eyes.
5. Build your own personal brand — so people know and appreciate what you have to offer.
6. Be loyal — to the projects you work on, your partners, your business and the community.
7. Be on the lookout for great new ideas — and take advantage of your brain’s most valuable creative abilities.
8. Use feedback from others intelligently — as a basis for improvement rather than to become offended or defensive. Enthusiastically seek feedback from the people you respect.
9. Know your true market value — and don’t hesitate to leave your current job if they’re unprepared to pay that. Put yourself in a position where you feel good about doing your very best work and your career will move forwards and upwards.
Don’t Try and Do it All; Do Less Better
The paradox of self-management is: The way to get more done is to try and do less better. In other words, don’t keep trying to do more each day. Instead, concentrate your efforts. Do less but to a higher standard.
Becoming an effective time manager is essential, because you can manage your time well, you will lack the ability to be able to ever manage anything else. Making good use of your time always comes down to a few basics:
Decide what’s important.
Do what’s most important first.
Never confuse activity (being busy) with productivity (results).
Differentiate between urgency and importance.
To become financially independent, you don’t have to work harder than the next guy, just more intelligently. To make more effective use of your time:
1. Schedule a daily time for reflection and planning — since every hour spent planning enhances the quality of the work you do for the rest of the day.
2. Carve out large blocks of time where you work on the most important activities — rather than letting your day fill up with all the marginal value tasks.
3. Make the most of your personal prime time — schedule that time for your most important work.
4. Say no readily and frequently — to everything that is nonessential, distracting or counterproductive. If necessary, suggest someone else who might be able to do that task.
5. Keep your schedule loose — so when things take longer than expected (like they usually will), it doesn’t leave you feeling frustrated. Always have a Plan B in mind and have the materials you need close at hand.
6. Attack your high priority tasks with single-mindedness — and focus on doing that one thing until it is completed. If you’ve correctly identified your highest priority task, this will be the best possible use of your time.
7. Automate as many repetitive tasks as possible — by setting up automatic deduction from your checking account.
8. Delegate everything you possibly can — except for the creative elements of a project you need to contribute personally.
9. Conquer clutter — by making decisions immediately rather than later. Also, look at every item and ask: “What’s the worst that could happen if I throw this away?”
10. Take action to block any and all interruptions during your creative time.
11. Master your telecommunication tools — so you can use them to save time rather than trying to figure out how the gadgets work. And realize there are times when it’s better to be unplugged.
12. Ask yourself frequently: “What’s the best use of my time and energy right now?”
13. Never take time for granted — treat time as your most valuable, most irreplaceable asset. Remember, all the money in the world cannot buy you an extra moment each day. Therefore, make the most of this, the ultimate asset. Stay focused.
Now get off this site and go do something!
Work Hard to Capitalize on the Unexpected
Most things rarely go to plan. Good wealth builders realize that, and stay on the lookout for ways to turn lemons into lemonade. They have the mind-set every setback contains the seeds of greater success.
Life is always full of second chances disguised as unexpected and often unwelcomed events. Those with a success attitude are persistent, have genuine staying power and continually look for new pathways when their original plans have not played out as planned.
To become good at facing the unexpected:
1. Keep your eyes on your goal — and realize there are always a number of ways to do anything. Therefore, if one road turns out to be a dead end, have confidence you’ll be able to find another equally rewarding path.
2. Overcome any fears of success — and move forward confidently. Ask yourself: “What’s the worst that can happen if this is wrong, and could I live with that if it eventuated?” or “If I didn’t feel a little fear of the unknown, would I seize the opportunity?”
3. Use disappointments as a spur to accomplishment — rather than the permanent and definitive word on whether your idea was good or not.
4. Never let the opinions of others limit your success — because history is full of critics who said even superstars would never get anywhere. Don’t listen to anyone else’s opinion. Get out and do what you aspire to.
5. Always remember anytime one door closes, another opens — and therefore it’s not worth dwelling on setbacks. Pick yourself up and get moving again. Have the attitude if one door is closed, you’ll find another open door or, if necessary, build one yourself.
6. Relax and take your goals seriously but not yourself. Remind yourself often the goal in life is to enjoy you. If you try and take everything too seriously, that simply defeats the purpose. You’ll be more successful if you treat life like a game with wins and losses along the way.
7. Have tenacity and stick-to-it — because if you never quit, you must ultimately achieve your dreams. If you persist long enough at anything, you’ll win.
Don’t Try and Beat the Market; Own the Market
There actually are no experts who can help you invest your money. Instead, ride the long term up-trend of the stock market by owning shares in an index fund which tracks the progress of the market as a whole.
Despite what any investment advisor tells you, all they’re doing is making educated guesses about what may happen in the future. You can do that as well as they can. As already mentioned in Insight #2, passive investing through a no-load index fund is the smart approach to building wealth.
No-load index investing works well because:
There is no sales commission — all your money goes to work.
Yearly expenses are low — usually 1 to 2%
You have the ultimate in diversity because you own all stocks
There is no emotional component involved.
You have no turnover — and therefore no capital gains to tax
You don’t have to worry about the competency of the manager.
You don’t have to pay someone to manage your investments.
Again, as mentioned earlier, your investment strategy is disarmingly simple:
1. Decide your preferred allocation of stocks, bonds and cash.
2. Find a good no-load, low-cost index fund.
3. Invest regularly and consistently.
4. Check your portfolio once a year and rebalance.
5. Have a small amount of money (say 5%) in an account where you can try trading and beating the market.
6. Keep working your program forever and ignore everyone who tries to tell you they can do better with your money. Say, “Thanks, but no thanks.”
Always Limit Losses; Don’t Fall Victim to Bad Luck
You need sensible insurance because life isn’t always fair. Bad breaks happen, even to good people, but they don’t have to financially ruin you. Be prepared for storms ahead by doing some damage control in advance.
An essential element of building wealth is to cover your downside risks by being properly insured against contingencies that may arise. In other words, sensible insurance is required.
The key principles in being properly insured are:
1. Insure only against the big calamities and life events that you can’t afford to pay if they eventuate — like your death, disability or serious illness. Put together a realistic level of:
Term life insurance — or 5- to 8-times your annual income.
As much disability insurance as you can afford.
Good health insurance.
2. Always take insurance that has the largest possible deductible you can afford — because it lowers the premiums significantly and reminds you insurance should be used only in the event of a major bad break.
3. Don’t buy insurance based on the odds of something bad happening to you — but only to protect yourself and your family from something you couldn’t afford to have happen.
4. Buy coverage only from the best-rated insurance companies — because this is your backup plan.
5. Insure yourself against potential lawsuits — with a cheap personal liability policy.
6. Take reasonable steps to prevent a disaster happening — by doing the sensible things like giving up smoking, getting regular exercise, eating the right foods, getting enough rest, driving sensibly, wearing your seat belt, etc.
Listen to Those Who Know, Not Those Who Sell
Never buy an investment from the person who is giving you financial advice. Regardless of what they say, there will always be a hidden agenda involved. These people are always interested in their wealth first, not yours.
In this modern era, everyone gets bombarded constantly with a multitude of “irresistible” offers. The way to stack the odds of success in your favor are simple:
Listen to a few credible sources of information you trust and ignore completely all others.
Say yes to just a few moneymaking opportunities and no to everything else that will dilute your focus.
Understand completely what kind of legal and financial advice you actually need and then get that advice at a realistic and reasonable price.
Of course, an intelligent person attempts to learn from the mistakes of others rather than making them all himself. Part of this is learning how to protect you from being taken. Again, this concept is straightforward.
To avoid bad investments:
1. Be a critical thinker — taking time to reflect and look at the evidence rather than acting immediately on everything.
2. Do your homework — before investing rather than after the fact.
3. Ask specific questions and get the answers in writing — and if they won’t respond to your questions adequately, walk away.
4. Interview the references provided by the promoter — but be aware most of these people will be paid to make extravagant claims. Be skeptical — if it sounds too good to be true, be very suspicious.
5. Resist pressure tactics to sign up immediately — because good deals very rarely require immediate action.
6. Don’t invest in anything you don’t understand — and unless you can explain what you’re doing to the average twelve-year-old, walk away.
7. If an investment clears all these hurdles, consider paying for a professional’s opinion — and let them go through all the fine print you naturally gloss over.
Do It Now Rather Than Regret It Later
Success takes more than knowledge — it requires action. Execution is everything. Winners know financial freedom isn’t won by what you know but by what you do. Therefore, begin today.
Once you have the right financial know-how, there are only two things that can stop you form being successful:
Death
Your own behavior
In other words, you can literally create the life of your dreams if you properly invest your time and money, but you have to make it happen. The magic lies in the doing rather than knowing what needs to be done.
Therefore, to get under way and to keep moving onwards and upwards, you need to:
1. Get out of your comfort zone — and replace contentment with passionate commitment. We’re all creatures of habit more than we care to admit. To make progress, you need to cultivate new habits that will be more productive, even if this produces a little initial discomfort. All great achievements are difficult in the short run but easier over the long haul.
2. Be decisive and actually take action — rather than getting bogged down in continually analyzing ideas from every conceivable angle and viewpoint. Act thoughtfully but by all means remember to act.
3. Keep rating yourself progressively — on how well you’re making choices that will increase your personal and financial freedom in the future. Set goals and start working on them.
4. Track, celebrate and then reward your progress — because the journey is a long one and you need to enjoy it to stay motivated. To make the journey more pleasant:
Put a financial progress chart on your wall or develop a spreadsheet on your computer where you can follow your progress. That should remind you to save whenever the temptation to spend frivolously hits you.
Choose a career you like and feel passionate about.
Reward yourself appropriately whenever you hit specific financial milestones. Just be careful not to celebrate so much it halts any further progress.
5. Remind yourself frequently the key is to strive for excellence, not perfection — and expect not to be able to do everything perfectly right out of the box. Keep doing your best and keep moving forwards and ultimately you’ll get to where you want to be.
The Millionaire In You