It is said that money can’t buy happiness, and there’s some truth to the adage. But it fails to acknowledge the ways that having money, or financial security, impacts happiness, even if it can’t be bought.
Freedom and happiness are linked, in some ways inextricably, to our employment and financial success. We employ our talents, gifts, and excellence to work and become free. An understanding and application of economic principles will determine the level of our financial independence we enjoy.
For the past 40+ years I have loved liberating others with economic deficits and voids. The goal is to get money to work for them, instead of the other way around.
So what are the principles of financial independence as they relate to income, savings, credit/debt, taxes, investments, insurance and leaving a legacy?
Find employment in your passion. A wise man once said, “If you love what you do you will never work a day in your life.” Between the ages of 12 and 21 I worked as a newspaper boy, in a butcher shop, selling Christmas cards, in restaurants, fast food, construction, parking cars, washing cars, teaching Portuguese, and selling insurance. My freshman year at college I took a class on financial planning. For a semester I learned the basics of investments, taxes, insurance, estate planning and debt. I was captivated! The idea of helping people be financially successful motivated me. I thought how interesting it was to learn about all these concepts and coordinate people and resources into financial harmony and success. This profession still motivates me because it is about observing the joy in others as they become financially independent. By nature, human beings are creators and they like to build and make things. Financial independence makes building and creating possible.
Live on less than you earn. I learned early that I could spend everything I made quite easily! Fixing that was about discipline and temperance. But as I mimicked friends and spent every dime I made on the weekends, I had a lot of fun and pleasure but little to show for it. Reading this verse of scripture changed me. “Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal: But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal: For where your treasure is, there will your heart be also.” (King James Version, Matthew 6:19-21) He who dies with the most toys neither takes them with him nor wins a prize in the afterlife. Naked we came into the world, and we leave the same way we arrived.
Distinguish between needs and wants. A need is something that has a useful life long after you have paid for it. A want is frequently something that has a limited shelf-life and will be worth little before you have even completely paid for it. Do not borrow or spend leftover money for mere stuff. Consumables are not investments; they are worth a fraction of what you pay for them the moment you take them home. New electronics, furniture, clothes, shoes, cars, eating out for lunch or dinner– these all fall in the consumable bucket. Remember credit cards are debt. If you can’t completely pay off the monthly balance, it is likely you did not need most of the items on your credit card bill.
One way that helped me was to keep some cash in my pocket. There is something to the quick action of handing over a credit card versus the additional reflection taken while taking the money out of your pocket and watching it dissipate before you. Frugality and temperance in our spending habits grows as we put barriers up to spending. This also may include leaving credit cards at home and carrying cash.
Give 10% of what you earn to God and/or charity. You may ask, how do I give what I don’t have? As wants give way to needs you find new money you never knew existed. As you exit your comfort zone and find ways to give, you will get. If you help others get what they need you will always receive what you need. You will find a new source of friends who become interested in what you do and will desire to help you. One of the greatest beauties and blessings of life is giving money.
Capitalism is the greatest economic engine for freedom and motivation ever invented. It blossoms, and flourishes even more rapidly as one humbly places part of their blessings on the altar of gratitude and goodness for others. When we give, we show gratitude to our maker, family, and friends. Cicero said, “Gratitude is not only the greatest of virtues, but the parent of all the others.” It is not the sum of money we give, but the selfless abundance it conceives and nurtures in our way of being and becoming. We would do well to remember this teaching. “But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.” (King James Version, Matthew 6:33)
Time is the greatest ally, and also the greatest risk, most of us have. You can retain that risk or transfer it. Insurance buys you time and transfers that risk to an insurance company until you reach financial independence. Premature death, a catastrophic accident/illness or unknown destruction of your property are often best protected by insurance. Life, disability, medical, property and liability insurances protect your greatest assets: YOU and your property, in that order! You are the goose laying the golden eggs. Your earning potential is at stake. Proper planning includes preparation for the unexpected. As your resources of savings and new worth grows you can move to higher deductibles or completely illuminate some types of insurance. Until then, be sure to cover the unexpected. Death is a certainty. Insurance helps you control the timing.
Save and invest 10% of what you earn. Remember that someday your age, health or circumstances will not allow you to work any longer. That is when you will need to call upon your savings (money at work) or rely on charity. Begin by putting money into a savings of 3-6 months income for a rainy day. As you build an emergency savings fund, invest the remainder in a home, a retirement plan, or an investment account. The reason you choose one in sequence over the other will likely depend on your tax bracket, retirement plans available to you, and your age, health, and personal circumstances. A good accountant or financial advisor can help you put things in proper order of timing.
Wars are won in two ways: good tactics with the unexpected on the battlefield and sound strategic preparation for the future fights. Avoidance of discussing or planning your future financial independence is not a strategy, it is negligence. And it may result in financial bondage and keep you from becoming who you were meant to be.
2 thoughts on “You Can Buy Happiness: Financial Freedom and Personal Liberty”
Very profound and interesting. How I wish I had adhered to those valuable and true principles more fully.
So Profound! Wish I had really learned this concept in my young age. Thank you for sharing this insight.