Friday, July 22, 2016

Freedom Friday | How to live a life where every day is payday.

It's Friday. And that typically means payday for most.  I've been engaged in a lot of finance related conversations lately so I figured it was time to once again revisit the topic of financial freedom.

My parents are immigrants who come from very humble backgrounds.  Just having an education was somewhat of a luxury.  They came to the U.S. when I was 6 years old and worked very hard to make ends meet.  My beliefs around money were typical of any child raised by parents who lived in a poor country.  Going to school, getting a great job and working my way to the top was the blueprint to success.

Everything was going to according plan until I was introduced to this radical concept of financial freedom.  Financial freedom contradicted everything I thought I knew about money.  This concept of having more than enough assets to support your lifestyle without any additional income blew my mind.  I had no idea that people out there were living life abundantly without having to depend on a bi-weekly paycheck.
I desired financial freedom more than anything. It represented a key that could open up the door to infinite possibilities.  But my dilemma is that I had absolutely no idea how to get there. I didn't know anyone who enjoyed this type of lifestyle.  I did meet a few people at work who had tons of money in their retirement accounts from years of working, but I wasn't sure how to enjoy that type of abundance while still young.

Although I didn't know how to create financial abundance, I knew one thing, I had to ween myself off of my dependence on the all mighty paycheck.

Let me share a story with you....

My first real job was in payroll.  I'll never forget the day my supervisor sat me down, looked me straight in the eye sockets and said "never mess with people's paychecks."  What she meant by that was that their bi-weekly earning were their livelihood.  People depended on that money to survive.  I'll never forget the fear and panic that would take over someone if their paychecks were ever short. Some would get angry and threaten to contact upper management.  Others would beg us to fix it so they could pay their bills.  The level of desperation in their voice was real because that paycheck was a matter of life and death.

But then there were others, who weren't phased by the lapse in pay and would simply request that we add the hours to the next check.  People would go on vacation for 2 weeks, not get paid because they forgot to submit the hours, and simply say "no worries, just add it next time." Or they'd say, "I'll just save those hours for another vacation later on."  That's when I decided to be part of the group who wasn't 100% reliant on the money that comes on payday.  I wanted to have money all the time...not just on payday.

My first plan of action was to save up several paychecks in the bank.  I couldn't do it all at once, but I could save a little each pay period until I had a month's worth of pay sitting in an account.  Once I had that saved, I wondered if I could do 2 months, then 3.  Soon I put myself to the challenge of saving $10,000 in the bank.

My idea of financial freedom was how long I could sustain my lifestyle without receiving any additional income.  The longer I could sustain, the better.  Obviously, the more money you make, the "easier" it is to save.  But if you use your current wage as an excuse not to save money, then you're playing yourself.    Don't get caught in that way of thinking.   Instead, challenge yourself to have enough money to be perfectly ok if you received zero income for the next 3 months (or more).

Saving money is Phase I of the financial freedom plan.  Phase II is when you realize that your money can work for you even harder than you can work for your employer.  This is when the real fun begins. Instead of having to wait 2 weeks to receive income, you can enjoy earning income on a consistent basis.   No longer will you have to wait for "the man" to issue your earnings to you. You'll create your own abundance.  Instead of going into a bunch of detail on this, I invite you to check out my favorite book on this topic, MJ Demarco's Millionaire Fastlane.  Probably one of the few books that I actually finished reading. He will open your mind to the difference between the slow lane (working for a paycheck) and taking the fast lane towards financial freedom.  But the best advice I can give you on this topic is to study the path of those who have gone where you want to go.

When I say study, I mean study the finer details because they offer you the blue print that will ultimately create your freedom.  Learn the mindset that created their success and the actions that brought in the biggest return.  Learn. Do. Learn. Do.   Adapt your level of action to correlate to the level of success you desire.

*I can't tell you the number of hours I've invested in watching video interviews, listening to podcasts, and attending training sessions so I can learn from the success of others.  Every single second of it was worthwhile.*

I leave you with these final words from my last post on financial freedom which pretty much sums up the dangers of relying on a paycheck.

"Obviously, receiving cash flow in the form of employment is a good thing. But think of reliance on a paycheck as breathing with the help of a ventilator.  The minute, the machine is removed, you can't breathe.  Having the ability to breathe on your own is a powerful thing." 
  1. I love your finance posts, they're so informative and eye opening especially in a world that could easily drag us fashionistas into Chanel scented debt! Ready for more when you are xx

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