Nothing has changed on how financial independence is created

Let’s get this straight right here and now. Credit cards do not create financial freedom, and you say, “It lets me buy things when I want to.” Isn’t that financial freedom? Think again.

Financially independent

Things have not changed on how financial independence is created, it goes back centuries and generations; your grandparents did it, and so did your great-great-great grandparents. So if you are looking for the formula on how to become financially independent, here it is:

  1. If you earn $10
  2. Spend less than $10 (the less you spend, the more wealth you create). That’s how it is; it is that simple.
  3. Example: if you earn $10, spend $9 or better yet spend only $8

Financially Dependent

If you are looking for the formula on how to be financially dependent (meaning worrying about your finances all your life, and risking not having an adequate retirement), here it is:

  1. If you earn $10
  2. Spend more than $10 (the more you spent, the more debt and less wealth you create). That how is it, it is that simply.
  3. Example: if you earn $10, spend $11 or more (and you think that is not possible, think about. The use of loans and credit cards make this easy to do).

Financial freedom

Financial freedom is defined differently for everyone. What do I mean by that? Take, for example, two different families. Family “Spend it Before I Get It” earns $300,000, lives in a $1.2 million home, drive expensive vehicles of $80,000+, take big vacations of $20,000+ a couple of times a year, big expensive house parties, shops at the big stores, eats out in fancy restaurants, and has kids with all the big toys. Retirement savings might be, let's say, $275,000 after 20 years and is at risk for a successful retirement.

Family “Spend as Little to Live Comfortable” earns $150,000, lives in a $500,000 house, drive pre-owned vehicles under $30,000, take a vacation and maybe spend $5,000, small family house parties, shops at the outlets for quality clothes, eats out rarely, and has kids that understand the value of money, little if any big toys. Retirement savings might be let say $1.4 million after 20 years and is set up for a successful retirement.