In most of what we call the developed economies the rough statistics are that out of every 100 people with similar backgrounds, education and opportunities one person will end up very wealthy – nine people will end up financially independent and ninety will require government financial assistance in one form or another before they die. These figures can change depending on the government policies operating within a given country (eg Australia with its compulsory superannuation where the financially independent might rise to 20 or more but the one in 100 won’t be affected.
What makes the difference? I will often write about we are what we think but allow me to elaborate further. What we think usually manifests itself in what priorities we set in our life and the degree of importance we place on each of them. Some of these examples follow.
Many young people see sport as their path to a great income and financial independence however the vast majority don’t make it and are often left with physical challenges as well as loss of years where they could have been establishing a more financially productive base.
The desire to travel can either be a learning experience or a loss of time. Many use travel to learn a new language – travel frugally – learn there is more than one way to live your life or approach a problem – perform menial tasks for money and learn from older people performing the same task that this is not a way to financial independence. While others just have a great time and why not you think.
Others can have priorities such as the environment, save the whales, and many popular causes at the time. This is not to say any of the above is wrong they are not just that they can affect adversely your ability to become financially independent.
Lets us examine other influencing factors such as Needs versus Wants
The capitalistic system uses consumerism as a form of entrapment. It uses advertising to change wants into needs and once you have been seduced by this system they have you as a captive for the rest of your life if you can’t break the habit.
They reinforce this entrapment with credit cards, personal loans, extended credit over years and interest free. You must have seen these advertisements recently on television etc and the only real winners are the sellers of products and services plus the financial industry backing them and exploiting you.
What this group don’t like are people who pay their credit card off on time and incur no interest charges. That is why they increase the annual fees, try to reduce the number of free days and screw the sellers of products/services for a greater percentage of their sales value.
The ten out of the 100 persons quickly differentiate between needs and wants and take control of their financial future by being beholden to NO financial institution unless they are using the institutions money to make more money not consume products. The moment you have to borrow from the future to pay today’s debts you are trapped and it is not easy to get out. The way out requires great personal discipline and removal of wants for some considerable time. Mans original need list was shelter, food and clothing. Now days the shelter has to be in an upmarket housing area, food has to be gourmet and the clothes designer label.
You will note the first step in creating wealth is to reduce expenditure whether as an individual or a company, the second step is what you do with the difference between income and expenditure. If you don’t have a positive difference welcome to entrapment. Personal discipline is a quality found in the vast majority of the wealth generators.
My Way
