The Simple Path To Financial Independence

uh

does this picture look familiar

for many of us this is an all too common

occurrence

i know in my house our record was 17

boxes

delivered in one day my wife and i knew

that we needed to be more responsible

with our money

we wanted to break out of this vicious

cycle of consumption but it was hard to

stop

that said we wanted solutions we wanted

to answer the question

why is it so hard for us to fight the

urge to consume

so i did some digging and after just a

little bit of time i came up with what

seemed to be a plausible

conclusion and that is that deep down

inside

we like making other people rich

and it makes so much sense when you

think about it

i mean it’s knowing that we can help the

air to that retail fortune

get just a little bit richer there’s

great pride in that

or maybe it’s helping the tech

entrepreneur get a billion dollar

valuation

i feel like i’m part of the company like

i’m along for the ride

or maybe maybe it’s helping the ceo

build a brand new mansion

i feel like i’m a brick in that mansion

are you with me

do you like making other people rich

i can hear you the words out of your

mouth say no

but your actions your actions say yes

look this is not a talk about attacking

the rich instead

this is a talk about how to make you

rich this is a talk about how you can

achieve

financial independence over consumption

is a real problem today

and we can see it in the data scary stat

number one

seventy percent of americans have less

than one thousand dollars in savings

that’s one car breaking down one

unexpected medical bill that’s one

appliance break away

from being completely wiped out

scary stat number two the average

american

has credit card debt of seven thousand

dollars

this means that the average american is

paying over a thousand dollars in

interest each year alone that’s a

thousand dollars

of wasted money a thousand dollars that

can be put to so much better use

and finally scary stat 3

it’s estimated that half of americans

over the age of 55 today

will retire in poverty

today we are living paycheck to paycheck

and this needs to stop

and the answer isn’t just more money i

come across people

every single day in my practice who are

six figure earners but have

serious credit card debts so why is this

why is it so hard to fight the urge to

consume

well the answer hit me one day when i

was talking to a friend of mine

my friends in the uh in the startup

world he was starting a new business and

he was looking to raise some money

but he was having a difficult time and

in one of our conversations he was

venting domain he said ryan

the vcs this venture capital firm they

are killing me

they keep telling me i need to reduce

the friction points

between the customer and the sale

and that’s when it hit me friction

more specifically the lack of friction

points

is the reason why it’s so hard for us to

fight the urge to consume

you see there used to be natural

friction points that existed between us

and spending our money

you had to go to a physical store

location you had to dig through

inventory and you had to use

cash buying something simple like a pair

of shoes

could be a three to six hour event think

about cash as a friction point

you can only spend the amount of cash

that you have on you

but with each passing decade the

friction points have been removed

credit cards easy pay solutions

e-commerce and here we are today

you can get an alert on your watch you

can press one button on your phone

and you can have a pair of shoes you can

have 30 pairs of shoes delivered a day

later with free shipping

the friction is gone

and guess what this was all

intentionally designed it’s not because

retailers marketers venture capital

firms

it’s not because they’re bad or evil

people this is their job and there are a

lot of benefits that come with a more

efficient shopping experience

but in today’s world we need to be

mindful the fact that

the easier retailers make the shopping

experience

the more you will

today we need to fight an intentionally

designed system with

intention okay so why are we doing this

why are we intentionally adding back the

friction points between

us and spending our money why are we

looking to save more money why is saving

so

important well saving is about

having a safety net for the next

recession

it’s about being able to take that tree

and vacation that you’ve been putting

off for so long

saving is about a down payment on your

forever home

saving is about achieving financial

independence

so you don’t have to wait 20 30 or 40

years to control

your time do you want financial

independence

do you want more control of your time do

you want more ownership of your life do

you want to own

life on your terms well if so

saving saving step one it’s a really

important step

but it’s just step one because saving

saving is not going to get you there

alone

you need a little bit of help you need

some wind on your back so what’s step

two

so step two is we now need to take our

savings and we now need to change our

mindset

away from being a consumer

to being an owner own

capital own assets more specifically own

the assets that go up in value

over time own appreciating assets stocks

real estate the assets that work for you

even when you’re

not sounds so simple but we do the

opposite

we over consume depreciating assets the

assets that go

down in value over time this shirt that

i’m wearing

this is a depreciating asset there’s no

way

you would buy this shirt for me at a

price for more than what i paid for it

i’ve already worn it in fact the value

of the shirt

is probably close to zero dollars

let that sink in for a moment

now look around at all of your stuff

look inside your closet

and now think about how much money you

spent over the years to acquire this

stuff

i have a new client of mine who

estimates that over the last 10 years

that she spent

over a hundred thousand dollars on shoes

shoes that she will likely be donating

but what if instead of spending a

hundred thousand dollars on shoes what

if she took that hundred thousand

dollars and bought an appreciating asset

like stocks well here are the comics

uses i get

number one is that stocks are just for

rich people

number two is that the stock market’s

way too risky and i don’t want to lose

all my money

well this thinking is 100 false

start with excuse number one but the

stock market’s just for rich people

the stock market is the most inclusive

force for building wealth

you can buy stocks today with as little

as five

dollars so instead of just buying the

gadget upon release

how about instead why don’t you buy

stock in the company don’t be a consumer

be an owner and don’t stop at just one

stock

own many stocks you can own the 500

largest companies in the us today by

buying an s p 500

index fund so instead of spending 500 on

clothes shoes gadgets accessories why

don’t you take 500

and own your share of the us stock

market

small actions today do add up over time

let me show you the power of small

actions let me tell you a story

jody graduated college in 2006 and she

committed to a process of saving 500

a month and investing in an s p 500

index fund

well let’s see how she did over time

after year number one

jody had a balance of 6 500 close to it

after total contributions of 6 000

not bad but certainly not life okay how

about your number two

well you’re number two she had a balance

of just over eleven thousand dollars

after total contributions of twelve

thousand dollars

she’s actually losing money this is the

start of the 2008 financial crisis and

it only got worse

there’s a time where jody had a balance

of 9 500 after total contributions of 16

0. she felt discouraged but she stayed

committed to the process

500 saved every single month and

invested in an s p 500 index fund

and she was rewarded because the stock

market rebounded

get a 10 plus year bull market run and

today

jody has a balance of close to 200 000

after total contributions of just over

80 thousand dollars

jody said no to mindless consumption and

yes

to ownership and her small actions were

rewarded

over time okay how about excuse number

two the stock market’s way too risky

and i don’t want to lose all my money

yes the stock market does come with risk

we can see it in jody’s journey

if you invest in the stock market make

no mistake about it you will experience

periods of volatility look back over the

last 30 years

the stock market has experienced a

negative return in about 30 percent of

calendar years

okay but think about the alternative so

let’s say because stocks are too risky

and you don’t want to lose money

you decide to buy clothes shoes

accessories gadgets

well how have those assets done over the

last 30 calendar years

those assets have lost value in 100

of calendar years when you think about

it this way

anything about risk now think about

yourself

10 to 15 years in the future think about

that future version of you

would future you rather have a closet

full of

accessories clothes shoes gadgets all

collecting dust

all losing value or this future you

would they rather have

two hundred thousand dollars two hundred

thousand dollars that will get you

closer to living

life on your terms the simple

path to financial independence equals

intention plus ownership

intentionally add back the friction

points between you and spending your

money

and with your saving own appreciating

assets own the assets that go

up in value over time go from being a

consumer

to an owner it really is that

simple intention

plus ownership equals

financial independence thank you