For over a decade I have taught the concepts of financial freedom to thousands of people, both in personal coach sessions and in my seminars, and I have identified nine rules that I consider fundamental in order to create a financial freedom plan.
These rules highlight different areas, some are psychological, some are behavioral, some concern yourself and others affect your relationship with the people around you.
Here are my 9 rules for gaining your Financial Freedom.
1) Identify the fundamental reasons why you want this financial freedom
It is essential that you have at least one good reason for wanting this. A desire to be rich or to stop working isn’t enough. You need a profound reason otherwise you will not be able to give up all the old bad habits that you have had up until this point and that have prevented you from achieving financial freedom thus far.
Think long and hard. Can you identify the exact reasons why you want to become financially free? Are they strong enough reasons to support you in the bumpy ride that awaits you?
2) Find financial heroes to follow
Emulating the best in the field is an excellent way to become like them and achieve the things that they have achieved. If they can do something, you can copy them and do it too.
So, go in search of someone who is financially free or just rich and discover how they arrived at this point: how does this person behave? What does this person say? What do they think? If they can do it, you can too.
Read biographies of the number one financial trainers. Read my six books that have become number one best sellers!
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3) Make an active effort every day to be financially free
Take it from me, it’s not always simple to be focused on financial freedom. Freedom is elusive, but it offers all the comforts of the world so keep striving for it. Settling for the financial behavior of the middle class is much easier, but this type of behavior will never enable you to reach the financial freedom that you desire.
For this reason it is essential that you choose this difficult path and make conscious steps every day towards your goal. Trust me, when you get to the final step you will have a feeling of enormous satisfaction. So, whatever you do, ask yourself if the actions you are taking are bringing you towards or away from financial freedom and, depending on the answer, act accordingly.
4) Choose your friends and peer group carefully
This is a rule that many people find difficult to follow. Our friends, peer group, relatives, acquaintances and fellow citizens are powerful influences on our behavior.
If your friends do not share your goals of gaining financial freedom, which they probably don’t, its essential not to let the limitations of their views and negative convictions affect your aims. Maybe it’s time you change friends and peer groups, and find people who share your way of thinking. It may be hard but don’t let your emotions get in the way and don’t allow yourself to be held back and guided by people who can’t help you grow and reach your dreams.
This is probably one of the main advantages of following my seminars. Participating in Wake-up Call, for example, means you will get to know dozens of people who think like you and share the same desires and goals.
5) Pay your advisers well
Don’t find consultants who are cheap and pay them as little as possible. Don’t be stingy here. It is a fatal mistake. If you want to create your financial freedom, you have to invest in it. Watch how you will be paid back by being able to live the life you have always dreamed of.
As I explain in my seminar regarding how to invest in Real Estate, I created a team of consultants and specialists who are the best in their respective fields. Therefore I have the best possible advice when it comes to my real estate investments and what I invest initially, I recover a hundredfold when I make a deal.
Save on other things (see below), but do not skimp on the help that will allow you to achieve your financial freedom.
6) Try to get something for a bargain
This rule seems to contradict the previous one, but it does not. In this case, I am talking about your investments. When you make an investment, always try to get something more than what you have given or paid out.
Think of it as a gift of financial intelligence. If you withdraw money, the bank asks you for 60,000 euro, so try to sign up for 50,000. If you invest in options, use the methods that I explain in my trading seminars that will allow you to make free trades. If you purchase advertising space to promote your business, always ask for extra outputs or a further discount.
It seems like a cliche, but the rich are rich because they ask for a discount when it’s smart to ask.
7) Become an expert using a formula and then go to the next level
I always say you should learn by creating wealth. Making money is like baking a cake: there are ingredients and there is a recipe. The first time will be a mess, then you begin to get better, you learn how to mix the ingredients, maybe you will add some personal touch and become better. You will acquire a formula that can be replicated to multiply your income.
At this point, you can learn a new formula, in a different market, with different methods. Growing and becoming a more stable person financially, but also getting stronger yourself personally.
8) Do not buy “toys” on credit
As you probably know, I call all those expenses that do not increase your cash flow “toys”, as they will gratify you provisionally and emotionally, but will not add to your disposable income. Sometimes it’s okay to indulge in some “toys” and I’m the first to do so.
But not on credit. When I want a new sports car I do not buy it in installments or by leasing. I wait until I make the money I need by creating a new business or investment and then buy it in cash. A “toy” must never, I repeat never, add bad debt to your income.
As one friend of mine said, the real status symbol of a millionaire is not platinum credit cards, but cash!
9) Pay yourself first
I left this rule for last, but it is essential regarding your behavior with money: pay yourself first.
It means first of all: before suppliers, before taxes, before VAT. Decide what percentage of each entry is reserved to you (e.g. 20%) and put it aside, for example in a deposit account, ready to be used as an investment or as reserves depending on the amount and your financial situation.
This rule is important for two reasons: it gets you used to taking care of your money and it gets you used to having discipline with money itself.
Maybe there will be times when you’ll need all the money you earn and it will be difficult to pay yourself. Those are the moments that build your character in respect to money and will form a sound foundation for your financial freedom. Pay yourself first.
As you can see, the rules are simple, but often go against current trends. Or, at least, the behavior of people who are not financially free, which is their mistake.
To your financial freedom!