What if I told you the “American Dream” is a lie? That’s right. It doesn’t exist. Let me explain.
Why is the American Dream a Lie?
The American Dream is to achieve financial freedom. This is not the lie. The lie is how you were taught to achieve the American Dream. The strategy you’ve learned to achieve financial freedom is all wrong.
Where did you first learn about finances? For most of us, it’s our parents. Humans learn by watching and mimicking others. If our parents have bad financial habits, then we will most likely have bad financial habits. The inverse is also true.
Our parents hammered home the wrong process for achieving financial freedom. They told us to get an education, work as hard as possible, and save your money. Unfortunately, this hardly ever works.
In fact, most Americans actually get into more debt as they make more money. Earning more money is not the first step towards financial freedom.
The Four Steps to Financial Freedom
Earning more money is actually the third step in achieving financial freedom. Human nature is to spend more as we make more. When we get a raise, we typically raise our standard of living. The first step towards financial freedom is doing the opposite.
Step 1: Cut Your Expenses
I know people with $50,000 salaries who have more financial freedom than those with $100,000 salaries. The key is to ruthlessly cut all but the most-necessary expenses in your business and personal life.
Step 2: Invest Instead of Save
You’ll free up a decent amount of money when you successfully cut your expenses. The next step is to invest the money you free up.
Saving money is boring. It is way too easy to dip into our savings for some short-term gratification. Not only is investing addictive, but it makes it much harder to access your money and spend it frivolously.
Step 3: Earn as much Money as Possible
The first two steps are designed to change your attitude towards wealth.
Once you have internalized this new attitude you are ready to go out and earn as much money as possible. Make a list of actions you can take to earn a raise at work or increase revenue for your business.
Step 4: Keep Financial Score With KPIs
Key Performance Indicators (KPIs) are the metrics businesses use to “keep score”. Analyzing trends in KPIs is how you gauge progress.
Analyzing KPIs doesn’t have to be complicated. If you aren’t a business owner, then starting by tracking things like money saved per month and income earned per month is enough to get you on the right track towards financial freedom.
This episode was the first in a six-episode series designed to help you achieve financial freedom. The next five articles will cover:
Episode 52: Assets and Liabilities
Episode 53: The Titanium 7-Year Rule
Episode 54: Investing in the Stock Market
Episode 55: Investing in Real Estate
Episode 56: Repairing Your Credit
CTA: Are you ready to start your quest towards financial freedom? If so, contact Arman today to discuss your financial future.