Wednesday, May 26, 2010

How To Find The Road To Financial Freedom?

How long I've been working? Am I financially free?

These are the questions I asked myself three years ago that prompted me to review the financial road map that I've been going through for almost 11 years of working continuously. That day, I sat down and devoted the whole day reviewing my finances. I was very sad to admit that when I finished the draft of my personal Financial Statement-- my Balance Sheet and Income Statement, the figures revealed that I am financially bankrupt: few insignificant assets to declare, more liabilities.

T. Harv Eker is right when he said in his book SpeedWealth,"If you're in the business and haven't been creating wealth, there's obviously something missing: there's something you don't know." His words hit me bull's eye. To apply this wisdom in my situation, I'd rephrase what he said and it goes like this: If I've been working for very long time and haven't been creating wealth, there's obviously something missing: there's something that I don't know.

Where did I go wrong? Did I miss something?

The Revelation

I must admit that I really love reading, especially self-help books. Since my monthly budget when I was in the Philippines was not enough to buy books, my thirst for reading doesn't stop. I'd go to National Bookstore, find a book about finances and once I found interesting one, I'd read few pages then go back again the other day to continue reading until such time that I finished reading the book. That's how "wise" I am (lol).

After a year of working as Overseas Filipino Worker (OFW) in Qatar, I was introduced by a friend to sign-up for online business community based in the Philippines called Create Abundance 2020 International Community (CA2020).  Through my on-line mentoring program, I was introduced to life-changing books of Mr. T. Harv Eker like Secrets of the Millionaires Mind and SpeedWealth.

In his book Secrets of the Millionaires Mind, T. Harv Eker mentions the different "Wealth Files" that has to be programmed in the mind of anyone who wishes to achieve financial freedom.

One of these Wealth Files says: "Rich people manage their money well; Poor people mismanage their money well" 

I got another bull's eye and my face fell flat on the floor. It is a revelation to me. Truth hurts. Indeed, I was good in mismanaging my money in the past because I had a poor mindset. If I had been a good manager of my income as employee for quite a long time, I'm already financially free this time.

The good news is that I believe in the gospel of second chance. So I'm giving myself a second chance to start anew and pave the way towards financial freedom by managing my money well. To become an excellent money manager, one has to know and implement the importance of "Money Jars" as being taught by Mr. Eker.

The Money Jars/Account

1. Set up a Financial Freedom Account (FFA) -
-Always pay yourself first and don't wait for the left over because for sure nothing would be left
-10% of your income after tax 
-Should be savings or investment account
- This account shall be used for investment only that will create passive income and never ever spend
- This will be used to create your "golden goose" that will lay golden eggs

2. Set up Long Term Saving for Spending Account (LTSS)
-10% of your income after tax
- Should be a savings account
- This account shall be used for big item like house, car, wedding, vacation, college for your kids, credit card debt etc. You can use separate account for different item.

3. Set up Education Account (EDU)
-10 % of  your after tax income
-Should be a checking account
-This account should be used for your continued education related to your profession such as conference, seminar etc.

4. Set up Necessities Account (NEC)
-50% of your after tax income
-Should be a checking account
-This account should be used for utilities, house mortgage, rent, food, car payment, insurance, necessary clothing, your minimum credit card payment.

Note: If your expenses are more than 50% of your income, you have to simplify your life, change your spending habit, and change what it takes you to be happy. You have to choose now: immediate gratification or winning the money game and become financially free?

5. Set up your Play Account (PLAY)
-10% of your after tax income
-Should be a checking or savings account
-This account should be used for your entertainment, massages, nurturing type of things. As a rule, you have to blow all the money in your blow account every month. If you want something special, build the account first for many months then spend it one time. As holistic being, this account allows you to nurture yourself  on a spiritual and inner level.Your FFA Account feeds your logical side while your Play Account feeds your spiritual side and strengthens your "receiving muscle" and become an excellent receiver. Remember that you deserve to be happy.

6. Set up your Give Account (GIVE)
-10% of your after tax income
- This is your charity account. You can give this money in any way you want whether to your church, organization, person in need or whatever. The universe recognizes and rewards giving from the heart. This account strengthens your "giving muscle".

Take note that the percentage for each account is the ideal. You can adjust it according to your situation. That's what I did. Bear in mind that the "habit" of managing your money is more important than the percentage.

After learning The Money Jar/Accounts, I immediately took action. I went to the kitchen, took 6 empty plastic jars (used peanut butter jars) and labeled them accordingly, put it in my cabinet so that I can always see it and be reminded of my financial goals every time I get my things.

With the help of my Money Jars, I can buy the ticket so I can continue my financial journey that has been delayed because of what is called the attitude's nature assassin--PROCRASTINATION.

The financial freedom that is very elusive before is now very close at hand. I agree that being broke is only temporary and being poor is permanent. I'm no longer poor because I already have the rich mindset. I can see now the abundance around me and open myself to the unbounded, limitless and overflowing abundance of God's universe than can be found only when I started moving outside my comfort zone.

Now, I can clearly see what road to take to bring me to the place called FINANCIAL FREEDOM.


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