My students will tell you that my mantra in life is to “Think simple”. It was something one of my college professors always said, with a heavy French Canadian accent.  He was one of the best teachers I ever had, and was an inspiration for me as a teacher. I have come to realize that he was correct.  Life is simple.  We just don’t believe it.  I have found that it usually is a choice between something that is difficult, and something that is easy.  Turns out the more difficult choice is most often the right one.

I had a young friend ask me the other week, “What is the simple idea behind becoming Financially Free?”  It is a very good question. Here is the answer, based on thinking simple.

  1. Live within your means.
  2. Save money regularly.
  3. Make your Saving work as hard as you do.
  4. Protect your finances from disasters.
  5. Surround yourself with like minded people.

I will add one phycological one as well.

  1. Only compare your “today self” to your “yesterday self”.

Seems pretty simple. It is, and it is not. We live in a world that really does not promote any of those things.  Yes, the banks talk to you about saving and investing, but they would rather you were using their credit cards.  They make way more money off them.

If you go by all the advertising, the whole purpose of life today is to spend money.  Everything has to be NEW, and the latest and greatest model. Remember “the one with the most toys wins”!  Wins what??  You go through life with your credit maxed out so that you can have every toy but in the end you still DIE.

I would rather have a less stressed life, and be able to live comfortably no matter how long that may be. At the end, it would be nice to leave something for my children and grandchildren.

It is a matter of simple choices.  Here is an example.  Do you buy a brand-new car which you will be making payments on for the next 84 months (that is 7 years).  Do cars last that long??  Or buy a 2 year old car, that is 40% less money, and will only require payments for the next 24 months, or maybe no payments at all.  Just a suggestion, you can buy a can of New Car smell from the hardware store for $2.98, if that is your reason for buying brand new.  If you’re buying to impress the neighbors, you’re not following suggestion number 6.

See, the choice is simple. The decision as to which one to do is harder.

If you constantly use a credit card because you don’t have the money; then suggestion #1 is blown away.  Blowing away #1, (living within your means), eliminates the ability to do #2, (Save).  Without #2, then #3, (Making savings work for you), can’t be done. That normally means that #4, is unaffordable. The reason that the first 4 fail is, because you have done #5 wrong. You surround yourself with like minded people WHO DON’T PRACTICE THE FIRST 4!!

I have watched students who want to live within their means, have to change who they hang with. Talking about how your Mutual Fund or Stock portfolio is doing with people who don’t have one, is not possible.  You will be talking to yourself in less than a minute.

Being Financially independent is a LIFE STYLE CHOICE. If you don’t believe me, I suggest you read the book “The millionaire next door” (Thomas J Stanley). It is about the way that people, with a net worth of over $1,000,000.00 truly live. They point out that if they were to make a TV show about real ordinary Millionaire’s, no one would watch the show, because it would be too boring. Real millionaires are like the book describes. Not like Hollywood puts forward.

It definitively helps to have a mentor.  Someone who has done it, who truly understands, and can support you in doing the necessary things.  Many rehab programs will set you up with a sponsor. Someone you can talk to, when you need help.  They are almost always someone who has gone through the program.   There should be way more financial sponsors out there.  If you need someone to talk to, I am available.

Going from one lifestyle to another is not easy. It is simple to say, but not easy to do.  Old habits die hard.