My framework for financial awareness (1/3)

For so many years, I’ve been chasing what is called around “financial freedom”. I realized about the commitment and discipline that requires to manage a different scale of wealth and I invested a lot of time changing my mindset for growing exponentially. I have to recognize that has not been easy for me and I failed a lot.

But here is what I consider the first bold goal towards financial freedom, I call it “Financial Awareness”.

It’s about three stages:

  1. Conceptual: Your belief system.
  2. Strategic: Your purposes and goals
  3. Tactical: Your habits, actions and metrics

Let’s see in detail what all this means.

Your Beliefs and Concepts

In this stage I took a look to the meanings around the blocks of construction of my finances: Money, Job, Investment.

I’m not talking about dictionary concepts, but a philosophical approach.

Key questions here are:

  • What does it mean the money for you?
  • Does your relationship with the money come from pain and fear? Why?
  • Do you believe that there is enough money for everybody? Everybody deserves it? Do you deserve it? Why?
  • Why do you do what you do everyday? What motivates you to wake up, beyond usual responsibilities like family, life-style, and other stuffs?
  • What does it mean to have a “job” for you?
  • What does it mean “invest” for you?
  • What is an “asset” for you?
  • Which kinds of asset do you have? Name them based on the previous answer.

Make it from your current situation, how you’ve grown, what you’ve learned. And then repeat the exercise for your desired situation. Review and update the concepts as much as you need to feel good about what you’re reading, by having in mind an abundance feel. Dream big. What would be those concepts if you could be whoever you want, to have whatever you want?

Money: The root of all evil

The most common meaning of money is what we receive in exchange for our time and what we can use to exchange for things we want or need. Basically we are changing something that is unique, limited, priceless and we cannot get back (lifetime) for something that is produced by other people (or system) by using their resources, and nowadays we can see how governments can emit new money just pushing a button… Sounds unfair, ha?

So, why we spend our precious and scarce lifetime for something that is cheap, abundant and able to be found everywhere? It’s a very bad business from every point of view, right?

Well, I had to hack a little the concept of “Job” in my mind to make it bearable.

No job, no passion

Yes, that’s exactly how start to think about how the work I do, must be something I can enjoy, to be passionate about. For me doesn’t make sense spend time working in things, companies, customers, colleagues I don’t share connected to in terms of vision and values. We have to share the same spirit in someway to make me feel I’m in the right place.

After that, the place I’m working in has to be according my expectations and ambitions in terms of profitability and learning (which for me is a measure of profitability also).

So for me a Job is an opportunity of solve problems by learning something while I’m getting paid for. And if you’re a searcher like I usually think I’m, well, you will learn from everything, specially, a lot from yourself in relation with others. Teamworking is usually the best way of get the most of you by serving others and learn from the experience of third-parties and colleagues, which is one of the most accelerated ways of learning.

Invest: Invert the Factors

I love how “invest” and “investment” are said in Spanish because literally are homonyms with “invert” and “inversion”. So I like to say: “Sure! It’s called investment (inversión), because you have to invert (invertir) the factors: instead work for money, you have to put the money to work for you” .

Of course that not everybody can live only from being an investor. You need an important amount of capital, but in the meanwhile you put some part of your savings to work for you and re-invest continuously the profit at the same time you keep injecting capital to the base, so you will find yourself closer to that vision. This concept is called compound interest, and is one of the strategic keystones of any rich man in the world.

More to say

I have more thoughts to share about this subject, like:

  • The strategic part: How I define my purposes and goals
  • The tactical part: How I try form habits useful habits, take action and measure.

Also some information about the industries, assets and projects I’d like to work on or at least put money on.

Upcoming posts will come. Feel free to share your thoughts about this subject.

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