What’s the best financial advice you can provide?

The longest word in the English language is 189,819 letters long.

It’s the name for a protein nicknamed “Tintin” and would take you more than 3 and a half hours to say out loud.

The reason I’m sharing this is simple…

189,819 letters is WAY too long!

That word could have easily been simplified down to 50, 25, or even 10 letters.

But it wasn’t.

Why?

Because some people LOVE to complicate things.

And nowhere is this more true than in the realm of finances.

If you spend just 30 minutes of your day reviewing 5–6 different finance blogs, you will feel like your head is about to explode and you’ll probably believe that you need at least 25 years of advanced economics and differential calculus to even begin to understand the information required to achieve financial freedom.

But you don’t…

Financial freedom (which is what I’m assuming you’re after) is simple.

People like to make it complicated because it helps them sell things.

But if you follow the five principles that my mentors taught me that helped me achieve financial freedom in my late 20’s, then you will be well on your way to life of freedom, abundance, and prosperity.

Enjoy…

Principle #1: Embrace Minimalism and Shun Consumerism

The first and simplest principle that will help you gain immediate control over your financial destiny is to embrace minimalism and shun consumerism.

I was first introduced to this topic by a former podcast guest and, once I implemented it, my life changed forever.

When most people hear the word “Minimalist” they immediately envision an empty 300 Ft2 apartment with two pieces of furniture and no dishes.

But this is not what minimalism truly is…

The way that I define minimalism is simple…

Only spend money on the things that you need or that bring real value to your life.

I know guys who live in 3,000 square foot penthouses and drive a BMW M6 ($120k) who I would consider to be a minimalist.

How is this possible?

Because they only spend money on the things that bring value to their lives.

They love cars and savor driving their BMW to their office. They entertain regularly and host parties on a monthly basis so the 3,000 square foot apartment is warranted.

They aren’t filling their home with crap from QVC or going on random Walmart shopping sprees.

They are intentionally spending their money in a way that makes them happy WITHOUT spending it on things that bring no value to their life.

This is the single most important financial principle you can ever learn.

Before you make any purchase, ask yourself two questions.

  1. Do I need this?
  2. Will it improve the quality of my life in the long term?

For example, dropping $300 on one of those stupid hover boards will do little more than drain your bank account and leave you with bloody knees.

However, investing $3,000 into the most comfortable mattress you can find will improve your sleep quality and have a positive impact on your life for the next 10 years.

Do you see the difference?

If you want to be financially free, you must shun consumerism. Don’t buy things “just because”.

Make sure every purchase has a purpose and you will do just fine.

Principle #2: YOU Are the Most Valuable Asset There Is

Invest in as much of yourself as you can. You are your own biggest asset by far. ~Warren Buffet

I’ll often have people ask me, “Andrew, what’s the best investment I can make?”

My answer is always the same…

“An investment in yourself”.

YOU, yes YOU are your biggest asset.

When you invest in yourself by buying books, hiring a coach, attending seminars, learning new skills, or other forms of personal development you are making an investment that will have a 100–1,000% return over the course of your life.

If you spend $10 on a book and you learn just ONE thing that helps you improve the quality of your work (how you make an income) by 15% each year and you earn $50,000 a year, in ten years you will be earning $202,000!

Just think about that…

If you want to get your finances in order, then start by investing heavily in yourself.

Learn how to make more money and bring more value to your business or company.

Learn how to manage money better and automatically have your income go to work for you.

Learn how to manage your time and energy more effectively so that you can earn more money.

Learn, learn, LEARN and your life will change.

I promise.

Principle #3: Pay Yourself First and Do It Automatically

If you want to become financially successful, then you must STOP paying other people first.

What do I mean by this?

Well, when most people receive their paycheck every other week, 30% of it goes to their landlord, 20% of it goes to the local grocery store, 30% goes to random bars, stores, and eCommerce sites, and the remaining 20% is eaten up by their bills and obligations.

This is the WRONG way to do things.

Instead, pay yourself first.

As soon as you get a paycheck, set up your accounts so that 5–10% of your income is AUTOMATICALLY deposited into a long term retirement account (IRA, 401k etc.) or personal investment account (the money you will use for books, trainings, seminars, etc.) or save for for future investment deals.

Then live off the rest.

This will force you to cut costs where they don’t matter and prioritize your FUTURE self over your PRESENT pleasure.

It’s difficult to implement but it’s essential to your financial success.

Principle #4: Save & Build a War Chest to Buy Assets that Put Money into Your Bank Account then Repeat Forever

A War Chest is a savings account that you use to buy assets with.

The only reason to save money aka build a War Chest because you are going to invest into an asset in the future. You are not seriously trying to make money off of .06% annual percentage yield savings account are you?

Imagine we’re playing a game of Monopoly and I start with $100,000 (a nice war chest) and you start with $100 (a bad war chest).

Whose going to win?

It doesn’t matter how many books you read, podcasts you listen to, motivational videos you watch or if you’re on the Keto or Paleo diet. You will lose everytime because I have a bigger war chest which allows me to buy assets that will further build my war chest to buy more assets and so on…

You will be forced to work inside someone else’s assets. This is more commonly known as a 9–5 job.

The best assets have these 3 benefits:

  1. Increase in value over time which can later be sold for a profit
  2. Pay you positive cash flow monthly/quarterly (my favorite you’ll learn why in the next principle!)
  3. Have tax benefits like a 1031 exchange on real estate property

That is my friends the golden trifecta of any asset.

If you’re not buying assets then you are not playing the game of Capitalism. You are inside of someone else’s game.

The result of doing this?

You’ll build wealth allowing you wake up whenever you want, do what you want and live wherever you want. If managed correctly, your children’s children can also have the same lifestyle changing your entire family name.

Summary: Save & build a war chest > Buy assets that pay you > Repeat!

Principle #5: Passive Income is Worth 10X Working Income

If at all possible, you should set about building passive income assets TODAY.

Whether you write books and publish them on Amazon, build an eCommerce business and run paid ads automatically, or purchase a single family home and hire someone to manage and rent it out, you need to have at least 1 (preferrably more) streams of passive income that generate you money whether you are working or not.

Imagine how your life would change if you earned $5,000 a month WITHOUT clocking in or doing any work.

What doors would this open? What opportunities would you pursue? How much happier and freer would you feel?

I can tell you from personal experience that building passive income is the #1 way to achieve lasting financial success.

Pick an income stream and pursue it tirelessly until all of your basic living expenses are paid by passive assets.

Principle #6: Understand When You Have an Income Problem vs. a Spending Problem

There are two types of people in this world.

  1. Those who have an INCOME problem
  2. Those who have a SPENDING problem

If you are earning less than $75,000 (or $100,000 depending on where you live) then you have an INCOME problem… Period.

Until you hit these milestones it’s very difficult to live a financially secure life.

You simply don’t have the funds to pay for the things that you need, let alone want.

However, if you are earning $75,000+ a year and don’t have any money left over in your savings or retirement fund, you have a SPENDING problem and should downsize immediately and save the difference.

This is an important distinction to make.

I’ve seen people earning $35,000 a year buying single ply toilet paper and cutting coupons to try and remedy their financial woes.

However, by starting a side hustle or freelancing on the side they could easily earn an extra $10,000-$20,000 a year and be able to enjoy the luxury of plush TP.

Conversely, I’ve seen guys making $500,000 a year spending every last cent and constantly working to earn more money (while increasing their expenses with their income). By downsizing their life, they could easily sock away $100,000+ per year in a savings account and retire within a decade.

Do you see the difference?

If you are attempting to become financially free, you must identify whether you have an income or spending problem and then take action to remedy the situation.

Never confuse one for the other or you will get caught in a game of constantly trying to earn more money or cut more costs without ever achieving the freedom you desire.

Hope this helps.

Stay Grounded,
Andrew

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