Breaking Free From Financial Bondage

Part 2:

If you want to break free from debt, then it’s going take action. Getting into debt was a process and getting out of debt is also going to be a process. A process takes time and it takes courage, you can’t carry on behaving in the same old way and expect different results.

You can’t carry on living in denial, thinking that you will face your problems another day. To break free we need to embark on a process of change. Today, I will be discussing the first of 3 steps to financial freedom.

Number one is to pay your self first, 10% of your income and invest it. This is the secret to creating wealth (see the post 5 laws of Gold). Wealth is not created in a week, a month or a year. It is built by making small continuous investments over a long period of time. Warren Buffet starting making investments at 10 years of age. Today Warren Buffet is one of the richest men in the world.

Many people delay saving, thinking they will start when they are out of debt, or when the car is paid off etc. There are a million reasons why one can put off saving.

If one is going to break free from financial bondage then drastic action is required. The first thing on your personal budget is to pay your self first 10% of your nett income. The 90% can be used for everything else that needs to be paid.

Out of every 100 people reaching retirement age in SA:

• 31% will be forced to continue working
• 47% will be dependent on family
• 16% will depend on a meagre state pension

And only 6% will be able to retire financially independent!

(Based on life assurance forecasts)

Now, what about you? Are you going to keep on delaying taking action? Are you going to be like the majority of South African’s living in denial spending all their earnings on things they don’t need?

Or, are you going to have the courage to take action and embark on a journey of breaking free from financial bondage and take the steps into financial freedom?

Are you going to speak to me afterwards and get your financial plan into gear, or are you going to leave here and put it off for another day?

"You see the difference between the haves and the have-nots is often traced back to the did’s and the did-not’s." D.O. Flynn

5 Laws of Gold:

1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family. This is the first law or secret for creating wealth. Wealth is not created in a day, a month or a year but over investing small amounts regularly over a long period of time.

2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field. If you invest your money well, your money will simply make more money. Again, a very simple and obvious rule, but one that many people never get to because they failed to follow the first rule.

3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling. This rule encourages cautious investing, or at least encourages the investor to at least be informed. Become an informed investor and make sure you get proper financial advice.

4. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those who are skilled in its keep. This goes hand in hand with the third rule: if you invest in areas outside of your expertise, you’re likely to lose money unless it's under the guidance of a qualified financial advisor.

5. Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment. The worst option is to invest in anything that promises absurdly good returns, or anything that you’re heavily pressured into buying. These investments are scams and won’t stand up to serious research. Lately there have been many such scams and there are still many such scams going around.

These 5 laws come from the book: - The richest man in Babylon.

Simple Rules For Creating Wealth

Here are two golden rules for wealth creation:

1. Pay yourself first - Pay yourself 10% of your income and invest it.

Something that is very simple but hard to do. I suggest build it up if you have a tight budget start with 5% and then gradually work your way up to 10%.

2. Spend less than you earn.

In this economic climate this is also easier said than done! Try not to get into more debt reduce account spending. Perhaps even downgrade your lifestyle if you are living above your means.