Understand that there is no magic.
When you look at all the gurus out there, you realize very quickly that things don't really always work out. You're always looking for the answer to the question that doesn't exist. You are always and again and again chasing for the truth that does not exist in this sense.
When I first talked with my team about the subject of this blueprint, I immediately had the idea to bring up the secrets that the super rich have and that the rest of us lack. But my team quickly confronted me with the reality and told me that these are not secrets but clear principles or skills that anyone can learn and implement. That is why this 1st step is so important. So if there are secrets to be mentioned here, then only that there are none. We are talking about things that really everybody can implement in their life. They are very simple steps that can bring everyone to get his finances under control and to lead a life without pressure and with enough money on the side.
So to make it very clear: It's not magic, it's not a secret, it's very simple steps that anyone, anyone who really wants to get out of it, can do. So if the next online guru wants to explain you that he has found the holy grail, you better save your money.
1. Stop procastination
The young always believe there is still enough time. Maybe not so much has happened to them yet in life. But the older we get the more we see how fast time passes by and the speed increases year after year.
The good thing is that no matter how old you are, you can change your life every day. All you have to do is make the decision to do it. So the question is, what does it take to make such a decision?
Basically, there are two primary motives why we do what we do: One, because we want to prevent pain, and Two, because we desire something. When it comes to money it is often the pain that helps us to change.
Maybe you are tired of always having months left at the end of the money? Maybe you are tired of always having to put off your children or yourself. Pain can really be a very good partner to break out of the current situation.
Here's a tip: Take a piece of paper and make a line in the middle from top to bottom.
On one side you write down all the good things that would happen if you were not in the current situation. On the other side, write down all the negative things that you don't like about the current situation.
Read this note every day and finally the situation will arise and you will want to change your life.
2. Create a budget
Many people struggle enormously, as they tend to spend too much money. The main reason is not that they earn too little. No, the primary reason is that they do not have an overview. Most of us know how much we earn per month, but the exact amount we spend is hard to keep track of.
Over the last 20 years I have met very few people who really have an idea about their finances. It is so simple.
Every child today can download an app on their smartphone and monitor their spending and see exactly where every cent goes. However, very few people do it. Of course it takes a bit of time but it's worth it. Such an app can really help you to get your finances in order. You will see what unnecessary expenses you make. Often we spend money on things we want but don't need. Just ask yourself at every expenditure if it is necessary.
Download an app today, try out a few different ones and find the one you enjoy most. It pays off!
3. Invest in yourself
I do not know how many times in the course of my career I have been asked for a good financial investment. No matter whether from friends, family or customers. The investment with the best return is always the investment in yourself.
Have you ever asked yourself why a professional athlete has a coach? Why successful entrepreneurs have a mentor or why in life you always seek advice from people who have achieved something you want to achieve yourself?
However, there are still far too many people who are too greedy to invest a few dollars in a good book, a good seminar or coaching.
Let's say I could give you a precise formula that would give you financial freedom within 30 days. How much would this knowledge be worth to you?
Unfortunately this formula does not exist and honestly, I don't know if I would share it if I had it. Your goal should be to grow personally. Because your value and your wealth depend on your personality.
Many years ago I turned my car into a rolling university by listening to audio books in my car. Even now I still do that. I invest several thousand dollars in myself every year to become better. The more valuable I become the more my fortune grows, of course. Decide to become a lifelong student.
4. Pay your debts
Debt is the modern form of slavery. Although it has existed for several thousand years. Already the Babylonians knew what power they have over people when they get into debt with them.
I don't know how many people in my social environment are doing a job they don't like because they have a lot of liabilities. They do not work for themselves or their family but often for the bank.
Therefore I can only really advise everyone to pay their debts as soon as possible.
Always start with the positions that have the highest interest rates. The interest on credit is the killer of your assets and therefore of your freedom.
Don't make any more debts. Some gurus speak of good and bad debts. There is no such thing for me. I don't know of any good debts. Neither a real estate loan (except for business, without private liabilities) nor a leasing car. I myself drove around as a millionaire with a mini car. A car for me is only a means to an end. Every dollar I save here helps me to build up a fortune.
I also don't buy things to impress anybody. That's actually part of the third skill, the budget.
What's the point of having a car where everyone turns around if I have to work 10 days a month to pay the installments?
Loans don't make sense to me. I hardly know any rich people who have a loan. Except for real estate investors, as already mentioned. Do yourself the favor and create a plan to pay back your debts as quickly as possible.
5. Create more than 1 income source
In order to be financially successful in the long run, it is 1. necessary to reduce your expenses and adjust them to your income and 2. it is important to increase your income.
Most people have only 1 source of income. But we see just now, in times of the coronavirus for example, how high the risk of a "safe job" really is.
In order to be financially independent it is therefore necessary to create several sources of income. No matter if you are already self-employed or still an employee, it would make sense to start a "crisis-independent" side hustle.
Especially in the last weeks I realized how important it is to have a business that I can do from home or from anywhere in the world. How would it be to have a business that you can do from your laptop, iPad or simply from your smartphone?
This could mean that in the future you can do your business from anywhere in the world (maybe that makes you a world traveller?). The only thing you need is an internet connection and today you can find this almost everywhere.
Independence takes on a whole new meaning because it is really up to the individual to make something out of their own situation.
Independent of a job, a boss, the economic situation or other mechanisms. Therefore it is necessary to find something that works 100% online and is accessible with a low entry price.
6. Take risks
The greatest risk of our time is the fear of risk - Helmut Schoek
Every entrepreneur, every investor knows how important it is to take risks. Even if you can lose something, maybe even everything, it is sometimes important to take the risk. Because if you can lose everything, you can win everything.
Risk is like a pendulum. The more it can move in one direction, the more it can swing in the other direction. And believe me, over time you'll get better and better. Both in assessing the risk and in building up when things go wrong.
There are dozens of examples of people who have fallen on their snout and then got up again and got much further than ever before.
Do you know the most valuable properties in the world? It's the cemeteries. Billion-dollar ideas are buried there. People had really great inventions and ideas that they never realized for the fear of risk. Make sure you don't add to the value of that real estate.
Before I take a risk, I think carefully and really weigh the pros and cons.
7. Diversify
Most of us have heard about diversification from the financial markets. I'll come to that in a minute. But that is exactly what we talked about in point 5. Remember how important it is to have more than one source of income to eliminate the risk of total loss?
Other ways to minimize that risk is to make smart investments. My personal favorite is the stock market. But I also like real estate. Both markets give you the opportunity to make money passively.
I can participate in companies by buying shares of companies and without doing anything I get a stake in the success of the company.
Maybe you think now: stocks, way too much risk.
That depends:With good, solid stocks you can make money even in times of crisis. People will always need things like toilet paper, right?
Which brings us back to what I wrote at the end of point 6, it's about balancing the risk. I'm not about finding the one penny that will make me a millionaire overnight. That works in one case out of a million. No, I am about finding a source of income and I want to have several of those to minimize the risk.
Likewise, if you have enough equity, you can invest in real estate. You remember, I'm not a fan of debt, except for real estate investments. Again, it is important to diversify. 1 tenant means more risk than 2, 5, 10 or 100.
Find the most promising investment category(ies) and then start to diversify your risk.
From my own experience and from hundreds of conversations with other millionaires I know that it is these qualities and a little practice that can pave your way to financial freedom. Start working on those first points today. In the course of time, set up an emergency fund if you don't have one yet and come back here again and again.
I realized how important it is that people start to rethink these perspectives. If this post has inspired you to do so, please let me know how your life has evolved. Also if you have any questions, send me a message. I look forward to hearing from you.
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