I have come to understand the simple step-by-step recipe for transforming your life by creating enough wealth to achieve financial freedom. Just knowing you have a plan and are on a path to independence from wage slavery can eliminate a lot of unnecessary angst.

Its simple but its hard. We live in a world of finely calibrated siren calls aimed at separating us from our hard earned dough.

It’s about hard work. Hard work pays off. The more hard work you do the luckier you get.

We are all at different stages of life and we all need to be competent in the ways of personal finance. Each life stage has its own issues:

· Twenty and thirty-somethings that are making money but can’t seem to make ends meet or save

· Folks preparing for big events like raising a family, buying a home, or having a wedding.

· Teens who are getting prepared to start out on life’s journey or navigate college expenses

· The middle-aged person who is sobering up to the fact that they need to prepare for down shifting careers and retirement

· Older adults who are facing immanent retirement, or are retired, and are concerned about making their savings grow and last

It may seem easier if you are making a significant salary. Personal finance competency is most important for people on lower incomes who don’t think they can achieve the dream of becoming rich and creating wealth that can be handed down generation to generation. You can.

A wealthy person is simply someone who has learned how to make money when they’re not working.

- Robert Kiyosaki

It’s about playing a long game and letting time work it magic for you. It’s about getting comfortable forgoing a marshmallow today in order to reap a bunch of marshmallows later.

It’s simple, but not easy. Nothing worth doing is easy. This is worth doing.

There are two parts to personal finance. The first is to become aware of financial mistakes you may be making. It not how much you make but how much you keep. The second is to get familiar with investing.

Knowledge is power. In this case the power to make decisions and not be so intimidated that you never start on the path to creating your wealth.

Like most things this is an open secret. There is no magic and it takes time, focus and effort. But because of that, it is also certain. If you follow this program and develop your plan, you will make it happen.

The Three Basic Steps to Wealth Creation

There are three basic steps and they are all related to managing money:

· Eliminate debt

· Save

· Invest

That’s it. Let that sink in. If you stop reading here, you have the plan.

It probably looks overwhelming and impossible and you are probably thinking: “duh, no shit, I knew that.” Everyone knows the path but few walk it.

I want to get that out of the way so you aren’t hopeful that I am going to provide some get rich quick secret formula. This is based on work and time. But like I said, this practice has the benefit of a high level of certitude.

Saving money and investing money are both good habits. Small amounts of money invested regularly for many decades without deliberation is one path to wealth.

- Kevin Kelly

The way to wealth is doable. There are lots of details to make this path feasible. We want to chunk it down into manageable steps. There are strategies, tactics, tools, and practices that will break it into feasible, measurable, and achievable steps.

Getting out from under high interest credit card debt is the first and most important step. Money is a great servant and a horrible master. Whatever our means, we must learn to live within them.

You can develop habits, plans and goals to make it happen.

Even if you think you are on the path to make riches in sports, or entertainment, or winning the lottery, an understanding of personal finance is still very important to you. Once you reach those summits and achieve those goals you must be prepared to keep your hard earned riches.

There are too many stories of talented people being ripped off by their accountants, managers, friends and lovers, or making foolish speculative money decisions and losing it all. Too many people that win the lottery are back at zero in a short amount of time.

If you don’t manage and keep your money, you will lose it. A fool and money are soon parted.

Most tragedies and deaths in mountaineering occur after summiting, on the descent journey. People focus so much on achieving the summit that they don’t prepare for the journey back down to safety.

Take a lesson from that cautionary scenario. Educate yourself now and be prepared for what happens after you successfully your summit.

Its not what you make, its what you keep.

“Get what you can, and what you get hold”

Ben Franklin

I learned these lessons and this approach the hard way. I look back and see how much easier I could have made my life if I had known this stuff early on.

I was lucky and successful early in my career. I worked hard and achieved dreams. But I also played hard and spent recklessly. I was undisciplined in how I managed money. Marketing images and the trappings seduced me.

Spending didn’t concern me. I thought I could just make lots more money. Its not what you make, its what you keep. I ended up going through bankruptcy and then later divorce and ended up a pauper. I went through savings that I shouldn’t have touched. I have been the poster child for poor money management.

I felt deficient and wanted to prove myself. I scrambled to create the next home run with entrepreneurship and startups. I had success but I also stumbled trying to do too much too fast.

I struggled but I changed it around. I stopped relying on the next big home run and started focusing on hitting solid singles. I have achieved financial freedom and am beholden to no one for a paycheck. I can pursue my interests and do what I want when I want. That is an incredible feeling.

It took a long time and a lot of heartache, worry, and frustration. Had I known then what I know now…

Instead of wallowing in remorse and regret I decided to organize my thoughts and codify my practice to help you avoid common pitfalls and get there sooner and easier.

Just knowing you have a plan and are working that plan will make you feel so much more in control. It will relieve anxiety about the future and replace it with excitement and empowerment. You will plan the work, and work the plan. You will see if you are on track and make adjustments along the way toward you feasible and achievable goals.

This isn’t about gaining knowledge and understanding as much as putting that newfound knowledge to work for you. This is about action and doing.

The first thing we need to do is get the right mindset. We start with an attitude adjustment. We have to accept responsibility and be ready to be rich. Lets take some time to assess our relationship to ourselves, to others, to success and money. Lets do this with an eye toward identifying and eliminating any attitudes and ideas that may be holding us back, and replacing them with assumptions that get us excited, motivated and in tune with our better selves.

Money won’t solve our problems. We have to rid ourselves of toxic attitudes before we embark on this journey. Otherwise we risk amplifying and reinforcing self-defeating and self-destructive behavior as we achieve our money goals. We don’t want to end up like Howard Hughes shuffling around in a mansion with Kleenex boxes for shoes.

The key is to get started.

“Do not wait; the time will never be ‘just right.’ Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along.”

- George Herbert

There are four aspects to money management and personal finance. Understanding these fundamentals is the place to start. Check out this post of mine.

The Four Aspects of Money

“If you would be wealthy, think of saving, as well as of getting. The Indies have not made Spain rich, because her out-goes are greater than her incomes.”

Ben Franklin

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