Ever heard the one about the lemmings following each over and falling off the edge of the cliff? This story is typically used in motivational seminars to illustrate the very real dangers of always following the crowd. What if (gasp!) the crowd is wrong?
Here’s another one for you. A famous motivational speaker from a bit earlier (Earl Nightingale) was famous for his quip about conventional wisdom. It went something like this: “…if you don’t know what to do, take a look around and do the opposite of what everyone else is doing.” Well, there you have it. Now let’s bring this home to you and your personal finances.
You see, lots of people read personal finance wisdom tips like the ones found right here. They nod their heads and agree that it sounds like a good idea. But, months later, their personal finances are pretty much at the same place, if not worse. In that case, it’s time to stir the pot, to shake things up a bit and take a look at some unusual strategies for you and your money.
Get Over the Hump
No, this is not a new sexual position from a Tantric workshop. This hump is really about your FU account. Oh, did I skip that? Real quick, your FU account is exactly what it sounds like. Your FU account is the savings you work towards so that one day, you can waltz in and (nicely, of course), inform your boss to “…take this job and shove it..!” Now obviously, you can’t do anything like this with two kids in school, a mortgage, car payments, credit cards and so on.
But get this. If you don’t focus on setting it up, it will never show up. You know darned well that someday, one day has a nasty habit of never showing up. Now, back to the point. Along the way to funding your FU account, you will want to discover your hump and make sure you get over it.
What is your Hump?
Well, like your fingerprints, your hump depends on you. Basically, think of a financial hump as an amount of money set aside somewhere where it’s earning a positive return. And get this, it doesn’t even matter where. You could have the money stashed in a 5-Year CD, an index fund, a bond fund, whatever. Under your mattress is probably not a good choice, but still. The point is you want the money set aside in area where you can visibly see that your money is making you money.
Brave New World
You see, once you get it, you will never ever go back. Moreover, like quite a few things in life, this is something you have to experience first hand to “really get it.” Now pay attention here and you will understand why getting over your hump is so important.
Think of it this way. Suppose you have $5,000 stuck in an index fund that’s only earning you, say about $127 a year. No big deal, right? Almost, like what’s the point, I mean not really even enough for beer money. Now let’s play with some math. What if what was $50,000 a year and was earning you say, $1,500 a year. Still not enough to walk away from, but it’s getting closer.
Turn on the Heat
Now, what if you step it up another notch? Suppose, somehow, someway you have $100,000 safely earning you a positive return each year. And since, these numbers are here to bring home a powerful lesson anyway, let’s go out on a limb and suppose that you are earning an additional $12,000 a year on that $100,000. Are you starting to see the picture?
Here, this is what it means in real life. Sure, that $12,000 additional annual income ain’t going to suddenly launch you into the land of the rich and famous. However, it’s going to do something that is arguably even more profound. It’s going to change what’s going on between your ears.
Lessons from The Matrix
Think of it this way. Once you see that you are actually having your money work for you, you are forever changed. In some ways, it’s like the movie, Do you remember how in The Matrix when Neo is asked if he wants to take the red pill or the blue pill? Once you get over your personal financial hump, you will never be able to go back to the old ways.
Why? Sad to say, but it is true. Unless and until you experience this for yourself, it will be hard to really get. It’s kind of like of your first sexual experience. Up until you had your first, you really didn’t “know” what it was all about. The point is that once you know, you know and you are on the way to personal financial freedom.
Wrapping it all Up
Can you see how it works now? Start with figuring out what your personal financial hump number is. Then work like there’s no tomorrow to get over that hump. Once you are over the hump, your FU account is already on the way to being a reality.
What about You?
All righty then. A new take on your personal financial freedom. What are your thoughts? Tell us right here…