This isn’t my formula on how to get ‘money rich’, as I certainly am not, and you should never take advice from someone that hasn’t done what they’re preaching. Full stop.
Instead, this is a recount of my experiences with money so far, and what I’ve come to learn about it. A reflection for myself to look back on, and maybe an interesting read for someone else.
As I understand it, money is a medium of value that’s used to buy and sell goods and services. Today, it is the main financial instrument used, mainly due to its ease of transfer and because of its intangible properties, allowing governments to create more of it out of thin air.
Money as we know it has become a game. A game with rules created by those who control it. Like any type of game, there are those who understand the rules well and know how to play, and there are those who do not. This is how I see the world of money.
Now for my experience…
My relationship with money has been rather up and down, and by that, I mean mostly down.
I don’t have an abundance of money flowing through my bank account, and never have. In fact, I have lived week to week for most of my adult life. Unashamed to admit this, I have not chosen to live my life with money as the main driver, and don’t feel the pressure to amass large amounts of it just yet.
At age 27, I recognise that I am still so young and new to this world. There is much I have yet to learn and discover, and responsibilities that do not fall on my shoulders just yet. Therefore, prioritising experiences, and exploring my passions/interests at the expense of earning money. Sitting here today, I am 100% content with this choice and wouldn’t change a thing. I believe that self-discovery and tangible things like relationships and experiences, are far more valuable than any amount of money.
With that said, I acknowledge that having enough money to meet basic living needs is important. I have struggled to make ends meet on more than one occasion, so I know just how uncomfortable, and all-consuming it can be. Beyond basic needs however, the only reason I have for accumulating more money is to gain financial freedom.
The way I see it, money is a resource that buys us time and space to live on our own terms. In other words, money affords us a sense of freedom in this world that we live in. The freedom to live a lifestyle of our choosing, to travel, to spend time with family and friends, to try new things, and to not have to worry about bills and day to day expenses. This is my definition of wealth, and the only driver I have to make more money beyond meeting my basic living needs.
So how do I plan on accumulating such wealth?
As mentioned earlier, I am no expert, and whilst I have taken forward steps in this domain, I am far from what I would consider wealthy and financially free.
With that said, I have been curious about the game of money for some time now, meaning that I’ve done quite a lot of research and exploration on the topic, whilst also testing things myself. I also have several people in my life that are considered wealthy, whom I’ve spoken to at length and learned from. So, I feel that my beliefs/actions are grounded in some truth and real-world experience.
Here’s some things that I practice which I believe will help me reach financial freedom one day:
- Ownership of real assets:
Whether it’s a business, property or another asset that increases in value over time, I see ownership of real assets as the single best way to generate an abundance of money that provides financial freedom.
Personally, I own my own business, and invest in assets like shares and bonds through index funds or ETF’s. Owning real assets generates cash flow, allows for favourable tax exemptions, and can provide leverage to finance/invest in other assets that do the same.
These are all long-term strategies, hence the next point.
- Boring and slow methods/habits:
Good things take time, and if something seems too good to be true, it usually is. We’ve all heard this before, and I believe it to be true when it comes to money and building wealth.
So much of making money over a sustained period is being disciplined and consistent. Just like working out or eating well, building wealth is a habit that must be trained regularly (not what people want to hear, and why so many struggle financially).
Some slow and boring habits that I practice include:
- Paying myself first -> allocate income to your savings first before daily living expenses
- Allocating a certain amount of income every fortnight to investments (ETFs are a good place to start)
- Creating separate accounts for daily spending
These three things are incredibly simple, but effective and replicable over a long period of time. Which is why I like them.
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There are hundreds of ways in which people claim to build wealth, and whilst all may have some validity and real-world examples, it’s obvious to me that the slow and boring techniques are the most effective. Not only are they less risky, but they often require less time and energy also.
Coupling these habits with the ownership of assets is the plan. Having ownership or equity in things is key. Those that bear the most risk, effort, and energy, gain the reward. This is true of a lot of things, money no different.
Other things that I’m curious about and have explored in the world of money includes debt, crypto, and property.
Debt is something that I have some experience with and will look to use as a tool to invest more into the ownership of assets.
Crypto is a world in which I’ve dug deep and believe that it will be a major part of our future. Like anything when it is introduced, it is hard to know what will rise to the top, which is playing out right now. With where our world is heading, I believe crypto will be a part of my strategy in the future.
Property is an asset class that is not on my radar just yet as I want to be flexible and allocate income to other things. Although it’s becoming harder and harder to get a foot in the door for young people like myself, I do believe the ownership of property has some great advantages especially when it comes to cash flow, and tax, and so I will be looking to include it when I can, and when it makes sense.
A good tax advisor/accountant is a must. The value they can bring long term is well worth the cost (a good one that is).
People I have listened to when it comes to money and building wealth:
- Warren Buffet
- George S. Clason
- Graham Weaver
- Naval Ravikant
- Scott Galloway
- Benjamin Graham
- Ray Dalio
- James Rickards
- Robert Kiyosaki
All the above is merely my own thoughts and beliefs based on my experiences so far. It will be interesting to see where these beliefs take me in the next 10-15 years. Maybe my strategy will change in that time as I reach a different stage of life, and as this world around me continues to change, who knows.
What I do know is that the world of money is not as complicated as it’s made out to be, we just aren’t taught the rules properly. It’s a game created by those who control it, and a game in which I plan to play to be free of it, and nothing else.
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Jack Macdonald 