Four Steps to Financial Independence: It’s simple but not easy.

There are four necessary steps to financial independence. They are all related to managing money:

1. Spend less than you make
2. Eliminate debt
3. Save
4. Invest

That’s it.

You are probably thinking: “duh, no shit Sherlock.” Everybody knows the path, but few are willing to walk it.

This approach isn’t a get-rich-quick secret scheme. The way to wealth takes work, discipline, and time. It’s simple, but it’s hard. It’s not easy, but it’s essential.

An Open Secret is something that is widely known to be accurate, and which people acknowledge, but fail to follow. Becoming rich is an open secret.
The good news is this practice has the benefit of near certitude.

Consistency is crucial, so develop plans and goals to make it happen. Make consistent action into habits you where you don’t have to think. Don’t rely on enthusiasm or discipline alone. Routine practice is more dependable and sustainable. Habits are persistence in action.

Even if you are on the path to making riches in sports, entertainment, entrepreneurship, the C-Suite, or winning the lottery, these fundamental steps are still essential. Once you reach the summit and achieve your goals, you must be prepared to keep your hard-earned riches.

Great and princely wealth is scattered in a moment when it comes into the hands of a bad owner, while wealth however limited, if it is entrusted to a good guardian, increases by use.
- Seneca

It’s not what you make but what you keep and put to work for you.
Talented people get ripped off by their accountants, managers, friends, lovers, or making foolish speculative money decisions and lose it all. There are stories of people winning the lottery and are back at zero, or end up in debt, in a short amount of time.

Manage your money or you will lose it. A fool and money are soon parted.
I was reading today about a family with an annual income of $350,000. They claimed they could barely make ends meet. Really?

A cautionary tale from mountain climbing shows a similar disregard for post-success preparation. Most tragedies and deaths in mountaineering happen after reaching the summit. The riskiest part of the climb is the descent. People focus so much on achieving summiting that they don’t prepare for the trip back down to safety.

Many times it is because they over-reach and take on too much risk to bag the peak. They figure they have come this far, and they can’t stop now. They confuse sunk costs and opportunity costs.

The sunk costs are what they have put in to get to where they are. The opportunity is to live to climb another day.

Take a lesson from these scenarios. Financially educate yourself and be prepared for what happens after you successfully summit or achieve your goals.

It is common in our careers to ignore reaching our goals and immediately set new goals to chase. This trap leaves no time to enjoy the fruits of our labors.

When you reach the summit, there is no need to go looking for a ladder.

‍