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ABOUT FREEDOM CLUB The Freedom Club is a mentoring and coaching program designed to guide you along the path to Financial Freedom. The Freedom Club is also a place where like-minded people can associate and get the support they need to reach Financial Freedom. ABOUT DR. TONY Dr. Tony Pennells believes everyone can achieve Financial Freedom, and he has made it his life s mission to help people do so. His series of books, Financially Fit, helps those struggling with money worries discover how simple financial know-how can allow you to live a life where your money works for you not the other way around. For more information, go to http://www.thefreedomclub.net/. I publish content regularly on: 1
INTRODUCTION Much of the common knowledge and traditional wisdom you probably believe about money is just plain wrong. How do I know this? Because I know that 80% of people regularly feel stress about money, and 96% of people are stuck in the rat race exchanging their time for money. Talking about money is difficult and sometimes embarrassing. Since so many pretend to be financially stable when they aren t, admitting you have an issue and asking for help can feel shameful. We feel that since others seem to somehow already know the secrets to successfully handling their money that we should hide our true financial situation. But where does that leave you? In the same poor financial situation you ve always been in, with no hope of reducing your Money Stress, increasing your financial stability or escaping the rat race. I want to assure you that YOU ARE NOT ALONE! I m going to share with you five financial realities about money you were never taught. More importantly, I m going to tell you how you can change your financial situation and join the 4% who are already Financially Free. Choose Freedom! Dr. Tony 2
The Traditional Wisdom 3
The Traditional Wisdom tells us that if we study hard in school, get good grades and find a good job, our financial future will be secure. As nice as it sounds, this is simply not true. Without learning how to handle, invest and grow your money, you ll never be free. You ll continue to earn to spend rather than creating cash flow. TRADITIONAL WISDOM SETS YOU UP FOR FINANCIAL FAILURE Most people want two things. First, to have an enjoyable daily life and, second, to be free from worry and stress about money. 4 Tsung-Lin Wu/Bigstock.com
When you re Financially Free, you can have both! When you follow the Traditional Wisdom, you re unlikely to have either. You probably won t choose the right career for you on the first try. Very few young people have the insight to know exactly what will best suit them professionally when they graduate university. If you keep following the Traditional Wisdom, you ll likely get stuck in an unfulfilling career, because you re afraid to make a change that could cause you to lose the income supporting you and your family. Most people never even bother asking the question, What 5
is my passion? because they believe acting on it will be impossible. The Traditional Wisdom might be worth a little more if it actually prevented worry and stress about money, but it doesn t! A good job with a good salary (even one you like) doesn t automatically equal Financial Security. And if you don t Pay Yourself First, finding any kind of financial stability or buying investments will be difficult. If you re not Living Within Your Means, you re probably going into more and more debt no matter how much you make! The truth is that following the Traditional Wisdom leads to being trapped in an unfulfilling career while debts mounts up around you. 6
The Appearance of Wealth 7
Leaf/Bigstock.com Success is most often seen as a nice house, a fancy car, the latest fashions and frequent fabulous holidays. You see others who have it all, and you naturally think they re successful. They ve made the right career choices, they re on solid financial ground and they don t have to worry about money. In reality, how much money you spend has little to do with either your success or your financial security. THE APPEARANCE OF WEALTH SETS YOU UP FOR FINANCIAL FAILURE Before credit cards became part of our daily lives, being able to afford something meant you had enough cash in your pocket to make the purchase. 8
In the last few decades, affording something has come to mean you have enough money to make the minimum monthly loan payment! In this new world, sending 40 55% of your take-home pay to the bank as payment on a debt is not uncommon. When we see someone who seems successful, we want to be successful too. Inspiration is great, but it s too easy to appear successful without actually being successful. When the person you admire is secretly deep in debt, and you go into debt to be like them, the only success is the bank s quickly growing profits! Success comes with Financial Freedom. When your chosen lifestyle is supported by your investments not a salary you are Financially Free and successful! 9 EpicStockMedia/Bigstock.com
Retirement is Not the Goal 10
Retirement seems far off in the future when you begin your relationship with money. Whether your first money experience is an allowance from your parents, an afterschool job or entering the professional world, you re taught to believe that the money you earn today is intended to pay for your lifestyle today. And when you finally do start thinking about retirement, you re encouraged to blindly set money aside with the vague idea it will somehow magically support you in the future. FOCUSING ON RETIREMENT SETS YOU UP FOR FINANCIAL FAILURE Just saving for your retirement is risky. Will you be able to save enough to maintain your lifestyle? Will you have enough money to last for the rest of your 11 Halfpoint/Bigstock.com
unsplash.com life? Will there be anything left to leave as a legacy for your family? The sad truth is that 75% of people run out of savings within five years of starting their retirement. Financial Freedom removes the concept of retirement from your life equation. Financial Freedom means you no longer need to rely on a salary to pay your monthly expenses. You create the cash flow that supports your lifestyle by collecting quality investments not by exchanging your time for money. So there s no need to wait until you re 65 to stop working. You choose whether to work or not NOW! 12
unsplash.com Rather than only focusing on saving toward retirement, buy quality investments that put money in your pocket today. Start sending your money out to work for you rather than working for your money. When you do that, supporting yourself now or in your retirement won t be a worry! 13
Budgeting and Saving Don t Mean Anything 14
Cutting costs and getting a deal on a planned purchase is a great feeling. But what happens next? What do you do with the money you just saved? If you set that money aside for your future self, then the bargain was worth it. But how many of us actually do that? FOCUSING ON SAVING & BUDGETING SETS YOU UP FOR FINANCIAL FAILURE Most of the time, the money you save at the grocery store is absorbed into your daily spending and has no affect at all on your overall monthly living expenses. In fact, you may end up spending on something you don t really need just because you remember saving so much at the grocery store. 15 Gripfast/Bigstock.com
What about when you see a great deal, but you pay for the item with a credit card? Unless you pay the balance in full each month, you end up paying far more for that item than you would have without the deal! The traditional approach to budgeting encourages you to allocate your money for different bills and then try not to spend that money before the bill is due. What are you left with at the end of the month? If you re lucky, you break even, but it s more likely that you overspend. And you definitely don t have anything left to put toward your future! Approach your finances from the opposite direction. Make you and your future a priority, and Pay Yourself First. Take the money you save using coupons and ACTUALLY save it. Live Within Your Means and refuse to go into debt. Do try to find ways to cut costs, but make sure that money is set aside rather than spent! 16
Building Wealth Won t Secure Your Financial Future 17
When you read about the huge net worth of celebrities, CEOs and politicians, it s easy to think net worth should be your financial goal. But a high net worth doesn t necessarily mean you re Financially Free. The type of investments that add to your wealth on paper often don t generate the cash flow that will support you in the world. And you actually live in the world, not on paper! JUST BUILDING WEALTH SETS YOU UP FOR FINANCIAL FAILURE If you ve been focusing on buying items or investments that add to your net worth instead of building your passive income, you could end up 18
with a very high net worth and no money for your weekly groceries. Rather than focusing on what your worth is on paper, wouldn t you rather have money from investments that you can live on now? Investing for income by accumulating quality assets is what leads to Financial Freedom. Receiving a quarterly statement that shows your assets have grown is much different than receiving income each month that actually supports your family and allows you to stop working. So stop pursuing the title of Wealthy, and start building a portfolio that will let you achieve actual Financial Freedom! 19
FINAL THOUGHTS So now you know that what you ve been taught to believe about money doesn t always match with reality. Remember, though, you re not alone! Almost no one understands these financial realities. This is why 96% of people are not financially stable. No matter where you are in your financial journey, you can change course. The path to freedom is possible when you know what the 4% know, and you start following the Four Money Principles I teach in the Freedom Club. Financial Freedom is within your reach! Until then Choose Freedom! Dr. Tony Connect with me! 20