29th October, 2012
We continue with the encounter my mentor had with Dele in London. As I later learnt, Dele had spent close to 10 years working as Office Administrator with a medium-sized company in the United Kingdom. He lived big while the show lasted with all the trappings of a good job – a luxury car, a big house and all the money to throw parties for friends when necessary. But unfortunately, he was among some of the workers recently laid off by his company. He suddenly discovered that he was living on borrowed assets… the house was on mortgage and almost every other thing in his possession was on credit.
Dele was still busy looking at his result when my Mentor suddenly resumed his analysis. He pulled out another form and asked Dele to fill it out.
He called this Financial Freedom Index worksheet which, according to him, is meant to reveal whether an individual is well-prepared for possible drought while keeping his day job. My Mentor’s interpretation of the result startled Dele.
“Now let me ask you: when you were in your previous employment, did it ever occur to you that the party might not continue forever? Did you ever make a conscious effort to prepare for a possible loss of job and how to survive if that happens?” He asked these series of questions without waiting for an answer.
“Let me be frank with you. You have put yourself in an avoidable vulnerable position. From what I have seen from my analysis of the two worksheets, it would take the grace of God for you to survive for more than two months on what you have as your reserve.”
“This is what I tell people all the time and this is what the Bible is saying when it says that people should learn from the financial intelligence of the ants that work and save hard during summer so that when the winter comes, they can have something to fall back on.
Becoming wealthy is your personal responsibility. “But many of us have refused to internalise the lesson in that verse. First of all, quite a number of people assume that it is the responsibility of their employers to make them rich and to assist them in achieving financial freedom. That is an illusion. You are on contract with your employer to do your job while he pays you what he thinks you deserve as wage. What you do with your financial future is absolutely your responsibility, not your employer’s. Unfortunately, many people realise this too late into their careers.
“We behave as if the party would continue indefinitely. We live in houses we would never live in were we to be responsible for the bill; we ride expensive cars we hardly can afford if we were to fund the purchase directly; we dress and eat to impress people. That certainly is not the way to create a bright financial future.
Invest for the rainy days. “The number one indicator of moniplexes is spending everything you earn. This is one habit anybody who desires financial freedom must shun. No matter how small you are earning, it must never become a habit to spend everything. Something must be left for the rainy days.
“Research has shown that with discipline, we can cut our so-called important expenses by at least 40 per cent. You had worked for more than 10 years before you were asked to go. Imagine what your position would be if you had consistently put at least 10 % of your salary aside and invested it in any vehicle you fancied. Rather than being in this kind of delicate situation and putting your family’s future in jeopardy, you should be celebrating your freedom.
Don’t ever rely on a single source of income, three more would do.“The number two symptom I have noticed here is that you depended entirely on your monthly salary without building alternative sources of income. This is one mistake I see many people make with costly results. We get so relaxed by our fat pay cheques and other benefits, forgetting that the party could end some day.
“That is what happens when somebody who is supposed to be enjoying his retirement in wealth suddenly realises that he has not built enough cushion. Individuals like this sometimes look for paid employment at retirement age. It is important to start early to build other sources of income to complement the existing one(s).
“The way to go about this is to use your spare hours profitably. How do you use your weekends? Most of the world’s wealthy people built their wealth during their spare times.
“It is recommended that income from other sources apart from your present one should be able to take care of your expenses on a sustained basis before you can consider yourself comfortable.
“Get me very clearly. I am not suggesting that you cheat on your employer by using the official hours to conduct your own business. That is not what I am saying. My message is that rather than go to parties after office hours, or on weekends, find something profitable to do.
I have done it before and I have seen many people use their spare time to build business empires for themselves. It is not a difficult thing to do. The problem is that people are not willing to endure temporary inconvenience. They are not willing to pay the necessary price to achieve financial freedom. Every good thing has a price. The question is: are you ready to pay the price? Are you ready to stop impressing your friends and get busy sorting out your financial future? The vital question to ask yourself frequently is; if I leave my present job now, would I be able to maintain my current standard of living? Those who do not ask this question frequently are those who, when they resign from their present job find themselves coming back to beg for re-absorption. That should not be the case. If you must work, the day you collect your first salary is the day you must plan to live without salary.
You should work towards building what I call a Layer -Three income which some people call passive income. Nobody should tell you when to step aside; that should be obvious as you would have built enough wealth that does not require you to exert great energy again. You would have built enough money that would keep on generating cash whether you are awake or sleeping. That is what is called working smartly. And that is how to work out your financial freedom.
My Mentor paused again, allowing us to digest his message. I requested to have a copy of his financial freedom index worksheet and he obliged me.
NUGGET
•Try this. See every hour as a messenger willing to deliver whatever message you post on it.
•Won’t you like your own hour to be a miracle worker, making money for you?
•Take inventory of every single hour of the day. Examine what message you have sent it. Use your spare time productively.
PPS: Did you miss the welcome FREE bonus I gave some time ago? To receive yours, text the following information in the format below
PMMONEY*Your Name*Email*Status*Location 07054638883
E.g: PMMONEY*Dele Taiwo*[email protected]*biz owner* Abuja to 07054638883
PPPS: Do you have any money questions bothering you? Send it to the money doctor at [email protected]