Are You Too Busy To Become Financially Free?

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Most people are on a treadmill. They make income at their jobs and then they spend it. There isn’t much left. Since their spending depends on their income, they are eager to increase their income at every opportunity.

Here’s what successful people know – it’s capital that counts, not income.

Successful people know that in the long run, expenses normally rise with income. In other words, when you earn more money, your expenses rise… and you tend to spend the extra money on material things, not assets.

Successful people don’t care as much about income as they do about capital. Often, they live in houses that were bought many years ago (no mortgages) and they drive cars that were paid off years ago.

The typical young person is encouraged to go out and get the best-paying job he can find. Then he spends the rest of his life trying to stay ahead of his expenses. He becomes “too busy to become financially free.”

I’m sure you’ve heard the saying… “Life is what happens when you’re busy making other plans.”

Let’s look at what happens when people become busy making other plans:

-The Social Security Administration recently reported that 36% of American workers have no savings set aside for retirement. 

-The latest Census shows that 63% of Americans will be dependent upon Social Security, friends or charity by the time they reach retirement age of 65.

-According to the Employee Benefit Research Institute, these are the average retirement amounts saved broken down by age groups.

    Under 35:              $6,306

    35 – 44:                 $22,460

    45 – 54:                 $43,797

    55 – 64:                 $69,127

    65 – 75:                 $56,212

These are scary numbers.

The key to building wealth is to use your income to buy assets that can appreciate in value. The key to buying an asset that can do that is to convert your income into capital. The key to converting your income into capital is to save money. This is why saving should be such an important piece of your financial freedom plan.

 Here’s an important fact. Most millionaires – people with assets of $1 million or more – are not big spenders. Quite the opposite, in fact.

They spend far less than they can afford on homes, cars, clothing, vacations, food, beverages and entertainment. It surprises many, but the vast majority of millionaires in the United States:

    Live in a house that costs less than $400,000.

    Are more likely to wear a Timex than a Rolex.

    Generally pay $15 or less for a bottle of wine.

    Have never paid more than $400 for a suit.

    Are more likely to drive a Nissan than a BMW.

    Spend very little on prestige brands and luxury items.

Yes, they’re frugal. But they’re also happy, not to mention financially free. They are not dependent on their families, their employers or the federal government. What a feeling.

The wannabes, on the other hand, buy luxury cars, expensive toys and often more house than they can afford. Their problem is that they’re trying to look wealthy. And this prevents them from ever becoming wealthy.

Here’s the bottom line: If you want to be wealthy, don’t act wealthy. Start living like a real millionaire. Save as much of your income as possible, then turn it into investment capital to buy assets that appreciate in value.  

Remember, you may think you are prepared for retirement. But statistics show you probably aren’t.  Life expectancy has only gone up, while retirement savings accounts have gone down.

If you aren’t saving enough for retirement, you could end up outliving your retirement funds by many years. If you aren’t saving enough now, you can forget about the benefits of retirement like freedom to travel and days filled with entertainment. Instead, you will be wondering how you’re going to pay for basic needs.

To avoid that fate, turn your income into capital by saving. Don’t wait until the time is right – start now.  The best time to plant an oak tree was 20 years ago – the second best time is now.