Everyone has a money bucket. The status of your money bucket
determines if you have financial freedom or financial bondage.

Financial freedom brings freedom, savings, and enjoyment in
life. Financial bondage brings extreme debt, worry, pressure,
stress, and other problems.

Let me explain about the money bucket

Imagine a five-gallon bucket with a garden hose pouring water
in the top. In the bottom of the bucket are many small holes.
Water is constantly leaking out of the bucket at a rapid rate.

You money bucket is the same. You have your income coming in
the top through your job, investments, etc. Since it takes money
to live, your money is leaking out the bottom to pay bills,
house payments, food, etc.

–Financial Bondage = your money is leaking out faster than it is
going in. In other words you are spending more than you make.

–Financial Standstill = income and spending are equal. You are
living paycheck to paycheck and are not getting ahead or behind.

–Financial Freedom = the money is coming in faster than it is
leaving so you are building up your savings. Freedom!

If you have financial freedom, great! However, what if your
money is leaking out faster than it is coming in?

If this is the case, you need to

Improve your Money Bucket

There are two ways to improve your Money bucket:

Option #1: Open the hose more (increase your income).

Many opt to for this solution. Usually this is through working
more hours or having a second job. This at first seems like the
best option and it can improve a person’s situation. However, it
is not as great as it sounds.

Take this example:

Joe is making $2500 a month. Currently he is spending $2800.
$300 a month is leaving his bucket. This is financial bondage.

Any extra hours he works will earn him $15 per hour. He can
work 20 hours more per month and the $300 will be taken care of–
Right?

Wrong. In his tax bracket, every extra dolor will be taxed at
25% federal, 7.5% social security, possibly 4.5% state, plus
sales tax when he spends the money. So at least 37% percent of
his additional income will go to taxes.

He has to earn not $300 to balance the budget, but $476
dollars. Instead of working 20 extra hours he will have to work
an extra 32 hours! This does not include extra gas and other
expenses.

Turning on the hose of more income is good and sometimes the
only option. However, it may not always be the easiest or best.

The second option can actually be the easiest and best, though
it will take some effort.

Option #2: Plug the holes (Spend less).

Impossible, you may say. Three steps will help you.

Step 1: Identify the leaks.

Keep receipts and write down the exact amount you. It only
takes a few minutes a day or week. At the end of the month look
through and see how you have spent your money. It can be
shocking learning where all the money is leaking out.

Step 2: Identify the leaks that can be reduced plugged.

Some can be plugged others may be reduced. Americans spend an
average of $3 a day at vending machines. If this describes you,
that will save you over $90 a month if you cut back. Evaluate
and see what leaks can be taken care of.

Step 3: Plug the leaks.

Now that you have identified what can be cut out, do it.
Reduce the spending. Take the necessary steps. Will it be
painful? Probably! You have two choices in life:

Choice #1: Short term pain (spend less), long-term gain
(Financial freedom).
Choice #2: Short term gain (spend more), long-term pain
(Financial bondage).

How is your money bucket? If it is leading you towards
financial bondage, take action now. Either plug the leaks or
increase the income. Financial freedom is found in a sound money
bucket.

Bryan Falls has a passion to help people improve their life in
the areas of health, relationships, finances, and personal
success. He shares the secret to financial freedom at his
website: http://www.improveyourlife-now.com/finance.php

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If you want money you need to learn how to control it. You need to improve your financial education and build your discipline. I am going to reveal to you how you can do both. Let me ask you a very simple question. Do you want money? Of course you do!

Everybody wants money. You might think my next questions are even sillier, but I’ll ask them anyway. Would you like to have money all the time? Do you really want money?

You see what I am asking you, by adding the word “really,” is do you actually want the money itself or do you want the freedom it can buy you? Ahh. Now you see what I am getting at. What you really want is the freedom that the money represents. What you really want is freedom.

Access to money allows lots of freedom.

What would be the point of being a millionaire or even a billionaire if you were serving a prison sentence for the rest of your life? Your loss of freedom would render your prime use for that money next to useless.

So, how do we get money? There are many ways. We can work for it, receive commissions, receive royalties and we can accrue it from things like interest and investments. We can even steal it, much as I dislike even mentioning such an option.

In reality there are only two basic ways of accumulating money:

1 - we can work for it ourselves by exchanging time and effort,

2 - our existing money can be put to work to replicate itself.

For most people, it is not how much they earn, it is how much they are able to keep. That is the single most important difference between becoming wealthy and staying poor. Spending more than we earn is the recipe to certain financial disaster. Yet most people do just that.

The answer to becoming wealthy is financial education and discipline.

There are many ways to educate yourself better in the ways of handling money. However, by far, the easiest is to gather the knowledge through the wisdom contained in appropriate books. In my opinion, there is no better general resource than George Classon’s timeless classic, “The Richest Man in Babylon”. I highly recommend it.

I know from experience that those who desperately need the knowledge this excellent book contains will never read it - even if it were placed in front of them every day for a month. That is why they are poor. They think poor and do nothing to change it. What is in their wallet or purse is a direct result of what is in their head, or, more correctly, what is not in their head.

The poorest people are the people who spend the greatest amount of money on trash. They would never think to buy knowledge or invest in their greatest asset - their brain!

There is another very powerful thing that you can do to prepare yourself to handle money wisely. If you want to have money, I suggest a good place to start is with your own discipline. This is another area where poor people fall well short.

If you want to elevate your self esteem and improve your discipline both at the same time, try the following. It will ensure that you have money all the time:

Go to your bank. Withdraw the biggest single denominational note you can (say $100). Put the note in your wallet or purse then, and here comes the most important part, DO NOT SPEND IT!

Nothing will give you greater self esteem and nothing will build financial discipline stronger than doing this.

I have been walking around with three $100 notes in my wallet now for over a month. I refuse to spend them. I go into shops, I look at things I want, I think, “Gee, I’d really like that!” then I turn around and walk out. How much money do you think I have saved by not giving in to impulse buying?

My $300 gives me a great lift. It gives me tremendous self esteem to know that I can afford to buy lots of things if I want. I am in control of that money. It is not controlling me. I am exercising my discipline not to spend it.

I have other money in my wallet. It’s just that the $300 is what I call my “quarantine money.” The other money is my budget money.

If you want money you need to learn how to control it. You need to improve your financial education and build your discipline. I have just revealed to you how you can do both. Now that you know, will you do anything about it? Hmm.

[If you like this article and would like to use it on your own website or ezine you may do so ONLY if the article is not changed in any way and the final paragraph: “About the author”, with all links intact, is included.]

About the author: Gary Simpson is the author of eight books covering a diverse range of subjects such as self esteem, affirmations, self defense, finance and much more. His articles appear all over the web. Gary’s email address is budo@iinet.net.au. Click here to go to his Motivation & Self Esteem for Success website where you can receive his “Zenspirational Thoughts” plus an immediate FREE copy of his highly acclaimed, life-changing e-book “The Power of Choice.”

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Before we address the issue at hand, let’s make sure that we are clear on the definition of financial freedom. Up until 4 or 5 years ago, I had a warped perception of financial freedom. I pictured it as a life of leisure with a couple million dollars in the bank. After taking on too many unnecessary risks trying to attain that goal, I stopped to rethink my definition. I realized that financial freedom doesn’t require millions of dollars. As long as you have enough to cover your yearly expenses and a method to replenish your coffers, you are there. That sounds sort of like a job. However, even using that as a definition only a few working people would meet the criteria. Most need a job and a few credit cards to make ends meet. I redefined it as follows:

Financial Freedom is freedom to focus on what is truly important to you and your family without having to trade time for a wage. It is enabled by a portfolio of income producing assets, managed by you, which generates sufficient income to cover your yearly expenses on an ongoing basis. It provides both time and money.That is significantly different than my original definition, but much more achievable. It requires that your days be spent maximizing the return on your eBay business, rental properties or other assets. Unfortunately, it is no life of leisure. However, the intent is to generate your income in far fewer hours than the standard 9 to 5. If structured correctly the revenue will continue to come in while vacationing or on the golf course.

We have prepared our entire lives for the time for money swap. It is simply what responsible people do. You commit 40, 50 or 60 hours per week and the company commits to pay you for your efforts and in some cases extremely well. The concept of not exchanging your time for a wage is so foreign for most that financial freedom will never be seriously considered. Many will dream about it, but life will slap them back into reality. The few who choose to ignore life’s slap – must be willing to make the following three commitments.

1. Make time to become free. I submit that this is the number one reason why there are so few people that are financially free. Most are just too busy with life. Financial Freedom requires sacrifices and it begins with making a time commitment. Initially you will need time to study and eventually to implement your plan. The easiest place to find extra time is by reducing your number of hours of sleep each night. Start by reducing your sleep time by an hour. As your plan starts developing other items will lose their importance, freeing up more time for your plan. Before I left corporate America, I would put in a full 9-10 hours on the job and come home and work my plan for another 5-6 hours each night. One of the benefits of financial freedom is time to focus on what’s important to you and your family, but to receive that you must initially sacrifice some of your precious time.
2. Know your business. In preparation for your current career, you have spent years going to school and have attended seminars and training classes to attain additional expertise. Financial freedom requires a similar commitment. Unfortunately, there are no formal classes or degree programs. You must educate yourself and learn by doing. The lessons learned from a failed business deal or significant stock market loss is more valuable than any course attended or book read. There are three primary paths to financial freedom - real estate investing, small business ownership or trading markets (stocks, bonds, commodities and/or currencies). I have tried all three. Each venture has added significantly to my business knowledge repository. You must always be looking to learn. Seek out mentors. Pay your tuition to the school of hard knocks.
3. Buy Assets. Financial Freedom requires that you create passive income. That is income that does not come from wages or your active business participation. Rental property or dividend paying stocks are examples of assets that generate passive income. Your financial freedom plan involves mapping out strategies to add assets to your portfolio. Once you have enough passive income to cover your yearly expenses, you are free. All of our lives we have been told that our home, cars and boats are assets. Instead of arguing that point, I would like to introduce a new term “core-assets.” “Core-assets” are all items of value less non-income producing assets. Items such as your home, cars and boats unless used in a business are non-income producing. So, “core-assets” are only items that produce income such as rental property or a limousine. Financial freedom requires that your spending is focused on buying income producing or “core-assets.”

Financial Freedom is not jet-setting around the world living the life of leisure, but is having freedom to focus on what is truly important without having to trade time for a wage. It requires a serious commitment and is attainable when defined appropriately. Time for Money or Time and Money – it’s your choice.

About the Author

Michael Dawson recently said goodbye to a 20 year career in Engineering, Marketing and Sales to focus on living his dream of financial independence. He has since founded The Time and Money Group as vehicle to encourage others to do the same. The company’s mantra is “Why trade time for money … when you can have both.” Sign up for their free weekly newsletter, where he and others discuss the different paths to financial freedom and offer insights for your successful navigation.

http://www.thetimeandmoneygroup.com

Make sure to read one of Dawson’s most popular articles: “The No-Brainer Investment Strategy to Double Digit Returns”

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