Financial Guidelines
Money plays a huge role in attaining freedom in today’s society.
Attaining Financial Freedom
1. Understand your finances
Get oriented with the 6 most important numbers:
- Income
- Expense
- Cash-flow
- Assets
- Liabilities
- Net Worth
2. Restructure your finances
Set goals for these 6 important numbers:
- Income: 6 figures per year passively
- Expense: minimal, allowing modest comfort
- Cash-flow: positive 5 figures per year
- Assets: numerous cash-flow generating
- Liabilities: covered by assets’ cash-flow
- Net Worth: evergreen (self-sufficient)
3. Create additional sources of income
Look at available asset classes:
- Real estate (rentals, leases)
- Stocks (shares, bonds, and ETFs)
- Currency (Forex)
- Commodities (gold, silver, precious metals)
- Intellectual Property (IP) (products and services)
4. Invest in your team
Build a team that can support you:
- Find trustworthy people who are good at their craft
- Give lavish praise to your team
5. Just GO!
With the foundation finished, start building your empire:
- Reinvest surplus income back into assets
- Secure against unforeseen incidents by building a means of recovery
The Five Laws of Gold
These laws are paraphrased from the book ‘The Richest Man in Babylon’.
The First Law
Gold comes freely, and abundantly, to any master who sets aside a tenth of their earnings to secure an estate for their future and the future of their family.
The Second Law
Gold works diligently for any master who provides profitable work, thus quickly multiplying to work even harder.
The Third Law
Gold clings to the protection of a cautious master who invests it only after seeking the advice of those wise in its investment.
The Fourth Law
Gold quickly deserts any master who invests it into any business or purpose with which they are not familiar, or which is not approved by those wise in its investment.
The Fifth Law
Gold flees any master who would force it to impossible earnings by trusting their inexperience and romantic desires, or who listen to the alluring advice of tricksters and schemers.
The Seven Cures for a Lean Purse
These “cures” are paraphrased from the book ‘The Richest Man in Babylon’.
1. Live Within Your Means.
In life, it is obvious that there are some purchases that must be made, however, the first law to building wealth will task the master to distinguish between “wants” and “needs” on their own. No two masters have the same “wants” or “needs”, however, every master has this same task on their path to building wealth. This can also be thought of as abstaining from frivolous purchases made solely for the sake of vanity or fleeting pleasure.
2. Seek advice from those who have the experience to give.
Advice is freely given, however, not all advice is needed. For example, advice on the cosmos from a baker of bread is as helpful as a broken ankle in a foot race. While you might still be able to finish the race, a great deal of pain must be beared to simply finish—let alone win.
3. Have your money work for you.
One must learn how to have their money create more money without additional effort. After one’s money has been hard at work, the gains from said work must also be put to work. This process should be repeated indefinitely to build an army of money. Only after an army has been put to work, can one truly begin spending and giving liberally without the worry of loss.
4. Guard your treasure from loss.
Gaining wealth without learning to protect it is a waste of time. After one has learned to build wealth, they may become tempted by opportunities of even greater wealth. However, most “too good to be true” opportunities are often just that. Before making any investment, one must become familiar with the risks and rewards of said investment. Be sure to consult those who profit from wise investments in the same field.
5. Own your own home.
Rather than paying rent to a landlord, seek to own your home. Not much else need be said, is there?
6. Ensure a future income.
No one lives for an eternity, no matter how healthy—or wealthy—they may be. This being so, it is considered wise for one to secure wealth for their family before leaving the physical world. After all, wealth kept for only one lifetime is the same as no wealth.
7. Cultivate your powers.
No matter what one does for a living, they should be striving to continuously improve their own powers; learn more to nurture wisdom, observe more to nurture relationships, give more to nurture wealth, and feel more to nurture the soul. Without continuous growth, one is no better than a rock on the river bank—constantly chipped away by the rush of life, waiting only to become dust.