The Money Management System That Beats Them All (Part 2)
Did you know that we are all creatures of HABIT?
That’s actually bad news and good news.
The bad news is, once we develop a habit, it becomes increasingly difficult to change it. And the longer we have it, the more engrained it is in us, and the harder it is to change.
The good news is, with PRACTICE, we CAN change our habits until we NATURALLY and AUTOMATICALLY do things differently than we have in the past.
I especially like the expression that Harv Eker says during the Millionaire Mind Intensive. He says, “every master was once a disaster.” Everyone who today is great at what they do learned how to do it. They didn’t start off a master.
Think about it. The great pianist didn’t sit down in front of a piano day one playing great. No doubt, the first time they tried to play they had no idea what to do. But after many hours of practice, they improved to the point where they became a master.
The great baseball player didn’t pick up a bat the very first time and hit the ball consistently. But after many hours of practice, they improved to the point where they became a master.
The great money manager didn’t automatically become great at managing their money. In fact, we know from the sad state of the health of the average American family’s finances that most people are terrible money managers. But once they DISCOVERED A SYSTEM for managing their money that worked for them, and they practiced it repeatedly, they rose to join the elite top 5% who are financially free or at least on the road to financial freedom.
Becoming a great money manager is a LEARNABLE SKILL. And that’s the key. Success in virtually any important area of your life is a learnable skill. It’s up to you to discover the system that resonates with you, that you can live with and fits your personality and lifestyle, and practice it repeatedly, until it becomes NATURAL and AUTOMATIC.
It must become so engrained in you that you NATURALLY and AUTOMATICALLY do the right thing every time without having to think about it. At that point, you have become a master!
Ok, the next account we want to discuss after your FINANCIAL FREEDOM ACCOUNT is your LTSS, which stands for LONG TERM SAVINGS FOR SPENDING. Just as you take 10% out of every paycheck and deposit it into your FFA, you will take another 10% and deposit it into your LTSS jar. So out of a hundred dollars, $10 goes into your LTSS account.
These are for major expenditures, so you might divide these into sub accounts or sub jars for each item. You might have 2 or even 3 LTSS’s and instead of putting $10 into one, you might be putting $5 into 2 different ones. Again, these are for major expenses such as a car, a vacation, college, appliances, remodeling, a down payment for your home. Whatever you want to save up for.
How many of you remember that when you were a kid, you were told that you need to save up for things? But when you became an adult, you kind of forgot that. Well, I’m here to remind you that that way is the way. Got it? Considering the fact that we now have a negative savings rate in this country, most people just don’t get it!
You have to save up for things that you want, but now you’re going to have a special place to save up for it. And so you label these things. You label them, you write on your jar or on your account, your label says, Big Screen TV. Or, Greek Island Cruise. Understand?
So from now on, you’re going to take a portion of your funds, in fact, 10% of the money you bring home, and it’s going to go into your expenditures, you long term expenditures.
Let’s say you want to pay down your mortgage. What do you have to do? Create an LTSS jar to pay down your mortgage.
Let’s say you want to clear off your debt, what do you do? Create an LTSS jar to clear off your debt.
Speaking of your debts, have you ever heard financial “experts” offer the exceptional advice that before you do any of this BS to make sure the first thing you do is put all your money towards clearing off your debt?
Who the heck needs to be paying 22% interest? That’s the worst thing to do. Right? So the first thing you should do before you manage any money is take all your money you’re not using for living, and throw it all towards paying off your debt. Is this a good idea? Is this not such a good idea?
OK, here’s my opinion. Those financial gurus who tell you that have absolutely zero understanding of the human mind. And something called habits. Understand? I’m not saying it’s the wrong thing to do. I’m just saying, it doesn’t work. Not in the real world.
Why?
Because, what happens when you pay off your debts? You’ll end up doing the same thing again. History repeats itself.
Why?
Because we’re creatures of habit. And you didn’t do anything different. You just went through the cycle again.
One of the laws of the universe says that what you focus on expands. So therefore what you want to be focusing on is what you want, not on what you don’t want. So the goal is to focus on creating financial freedom. Not on clearing off debts.
Are you playing the money game to win, or are you playing the money game not to lose? There’s a big difference. You don’t play the money game not to lose. You play the money game to win. And the way you win the money game is by focusing your energy and attention on creating financial freedom, not necessarily focusing everything on paying off debts.
Therefore, you want to have balance, and you do that by using the system of money management that you’re discovering right now. I hope you realize this.
You must understand that the habit of managing your money is far more important than paying off your debts and saving a few percentages, because that will never last. Your conditioned mind will tell you that once you pay off your debts this time, you won’t do that again. But you will do that again. Why? Because you don’t know any better. You don’t have a system to make sure you’re doing something different.
So don’t worry about the few percentage points. If you utilize the system, pretty soon your debts will be cleared.
I would advise you to create one LTSS to pay down your debt. And here’s a rule you must live by. You ALWAYS make at least the minimum payment, because if you don’t make the minimum payment, you’ll have some serious credit problems.
So you’ve got to pay your minimum payment. And then you’re going to use the system, and whatever you can do extra, you’ll do through a LTSS jar. You’ll save up for it.
What happens if you can’t make your minimum payment?
Simple. Don’t eat! Pay your minimum payment.
I repeat what you’ve seen here again and again and again. THE ONE COMMON DENOMINATOR ABOVE ALL OTHERS WHEN IT COMES TO FINANCIALLY SUCCESSFUL PEOPLE IS THAT THEY ARE ALL EXCELLENT MONEY MANGERS!
It’s more important than any other trait.
How do you know what kind of a money manager you are? Look at your results. That will tell you to the penny what kind of money manager you are.
Commit to reaching your full financial potential. Commit to becoming an outstanding money manager.
As soon as you do, and as soon as you begin to show the universe that you can handle the money you’ve already got, you will begin to attract more and more money into your life.
Namaste.
Jeff
That’s actually bad news and good news.
The bad news is, once we develop a habit, it becomes increasingly difficult to change it. And the longer we have it, the more engrained it is in us, and the harder it is to change.
The good news is, with PRACTICE, we CAN change our habits until we NATURALLY and AUTOMATICALLY do things differently than we have in the past.
I especially like the expression that Harv Eker says during the Millionaire Mind Intensive. He says, “every master was once a disaster.” Everyone who today is great at what they do learned how to do it. They didn’t start off a master.
Think about it. The great pianist didn’t sit down in front of a piano day one playing great. No doubt, the first time they tried to play they had no idea what to do. But after many hours of practice, they improved to the point where they became a master.
The great baseball player didn’t pick up a bat the very first time and hit the ball consistently. But after many hours of practice, they improved to the point where they became a master.
The great money manager didn’t automatically become great at managing their money. In fact, we know from the sad state of the health of the average American family’s finances that most people are terrible money managers. But once they DISCOVERED A SYSTEM for managing their money that worked for them, and they practiced it repeatedly, they rose to join the elite top 5% who are financially free or at least on the road to financial freedom.
Becoming a great money manager is a LEARNABLE SKILL. And that’s the key. Success in virtually any important area of your life is a learnable skill. It’s up to you to discover the system that resonates with you, that you can live with and fits your personality and lifestyle, and practice it repeatedly, until it becomes NATURAL and AUTOMATIC.
It must become so engrained in you that you NATURALLY and AUTOMATICALLY do the right thing every time without having to think about it. At that point, you have become a master!
Ok, the next account we want to discuss after your FINANCIAL FREEDOM ACCOUNT is your LTSS, which stands for LONG TERM SAVINGS FOR SPENDING. Just as you take 10% out of every paycheck and deposit it into your FFA, you will take another 10% and deposit it into your LTSS jar. So out of a hundred dollars, $10 goes into your LTSS account.
These are for major expenditures, so you might divide these into sub accounts or sub jars for each item. You might have 2 or even 3 LTSS’s and instead of putting $10 into one, you might be putting $5 into 2 different ones. Again, these are for major expenses such as a car, a vacation, college, appliances, remodeling, a down payment for your home. Whatever you want to save up for.
How many of you remember that when you were a kid, you were told that you need to save up for things? But when you became an adult, you kind of forgot that. Well, I’m here to remind you that that way is the way. Got it? Considering the fact that we now have a negative savings rate in this country, most people just don’t get it!
You have to save up for things that you want, but now you’re going to have a special place to save up for it. And so you label these things. You label them, you write on your jar or on your account, your label says, Big Screen TV. Or, Greek Island Cruise. Understand?
So from now on, you’re going to take a portion of your funds, in fact, 10% of the money you bring home, and it’s going to go into your expenditures, you long term expenditures.
Let’s say you want to pay down your mortgage. What do you have to do? Create an LTSS jar to pay down your mortgage.
Let’s say you want to clear off your debt, what do you do? Create an LTSS jar to clear off your debt.
Speaking of your debts, have you ever heard financial “experts” offer the exceptional advice that before you do any of this BS to make sure the first thing you do is put all your money towards clearing off your debt?
Who the heck needs to be paying 22% interest? That’s the worst thing to do. Right? So the first thing you should do before you manage any money is take all your money you’re not using for living, and throw it all towards paying off your debt. Is this a good idea? Is this not such a good idea?
OK, here’s my opinion. Those financial gurus who tell you that have absolutely zero understanding of the human mind. And something called habits. Understand? I’m not saying it’s the wrong thing to do. I’m just saying, it doesn’t work. Not in the real world.
Why?
Because, what happens when you pay off your debts? You’ll end up doing the same thing again. History repeats itself.
Why?
Because we’re creatures of habit. And you didn’t do anything different. You just went through the cycle again.
One of the laws of the universe says that what you focus on expands. So therefore what you want to be focusing on is what you want, not on what you don’t want. So the goal is to focus on creating financial freedom. Not on clearing off debts.
Are you playing the money game to win, or are you playing the money game not to lose? There’s a big difference. You don’t play the money game not to lose. You play the money game to win. And the way you win the money game is by focusing your energy and attention on creating financial freedom, not necessarily focusing everything on paying off debts.
Therefore, you want to have balance, and you do that by using the system of money management that you’re discovering right now. I hope you realize this.
You must understand that the habit of managing your money is far more important than paying off your debts and saving a few percentages, because that will never last. Your conditioned mind will tell you that once you pay off your debts this time, you won’t do that again. But you will do that again. Why? Because you don’t know any better. You don’t have a system to make sure you’re doing something different.
So don’t worry about the few percentage points. If you utilize the system, pretty soon your debts will be cleared.
I would advise you to create one LTSS to pay down your debt. And here’s a rule you must live by. You ALWAYS make at least the minimum payment, because if you don’t make the minimum payment, you’ll have some serious credit problems.
So you’ve got to pay your minimum payment. And then you’re going to use the system, and whatever you can do extra, you’ll do through a LTSS jar. You’ll save up for it.
What happens if you can’t make your minimum payment?
Simple. Don’t eat! Pay your minimum payment.
I repeat what you’ve seen here again and again and again. THE ONE COMMON DENOMINATOR ABOVE ALL OTHERS WHEN IT COMES TO FINANCIALLY SUCCESSFUL PEOPLE IS THAT THEY ARE ALL EXCELLENT MONEY MANGERS!
It’s more important than any other trait.
How do you know what kind of a money manager you are? Look at your results. That will tell you to the penny what kind of money manager you are.
Commit to reaching your full financial potential. Commit to becoming an outstanding money manager.
As soon as you do, and as soon as you begin to show the universe that you can handle the money you’ve already got, you will begin to attract more and more money into your life.
Namaste.
Jeff
posted by Jeff Fagin at 5:49 AM
3 Comments:
Jeff,
Great refresher!!
Jeff
Not having unproductive debt is a habit I like to have.
Larry E.
Excellent points
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