Planning for Financial Freedom

June 2, 2008 by  
Filed under Money Space

Welcome to The Money Space.

This month’s theme is Freedom which, with little doubt, would be dear to most people’s heart. I think it would be interesting to survey a number of people to ask the question, “what do you regard as freedom?” or perhaps, “what would it look like when you have the freedom you deserve?”

I would be surprised if a significant number of respondents did not link their concept of freedom to financial matters.

Our financial arrangements now and in the future have, in my humble view, had a profound impact upon the style of freedom we seek or dream about. It will be different for everyone, perhaps the general thread will be the same but the look of it will be different for each of us.

So to keep things simple perhaps I can help by focusing on some financial threads that may provide us with the tools to achieve that freedom, no matter how yours looks.

Because “Rome wasn’t built in a day”, let’s focus on the threads over the next few months so you will have time to absorb and contemplate how some of these threads and concepts can work for you.

This month I would like to start with the bigger picture so we have a clearer view of what things might look like once we get closer to our concept of financial freedom.

Things to keep in mind:

  • Be in control of your finances
  • Ensure your arrangements are correctly structured
  • Keep things simple so you can understand them
  • Seek a competitive advantage that you can design to move you quickly toward your financial goals

Control and structuring are very important. The old saying “nothing stays the same”, is very correct especially in financial circles. So be prepared – what you put in place today will need reviewing periodically to ensure that the changes in your circumstances are benefited most by the changes in financial and compliance requirements.

I can attest to the significant changes that have and continue to take place in the world of taxation, superannuation and compliance generally. However, knowing your goals and direction are crucial to ensuring you keep things simple and find the advice you need.

There is nothing better than action and decision making when it comes to goals and your finances. Over the next few months I will endeavour to weave into the monthly theme of The Calm Space, the following concepts as well as the broad ones I mentioned earlier:

  • Wealth enjoyment
  • Wealth accumulation
  • Wealth protection
  • Wealth growth & management
  • Wealth transfer

So what is the action step for this month?

Prepare a table of your current financial position. Perhaps the best way to do this is a statement of assets and liabilities, which will reveal your net position. Once prepared, I will ask you to continue to use this document as your yard stick to monitor your progress toward your version of financial freedom. Perhaps placing the document on your computer as a spreadsheet may be a good method. If you are not sure of how to set up the spreadsheet ask your current adviser, or ask a university student for help.

I think T. Harv Eker put it particularly well when he said “My definition of financial freedom is simple: it is the ability to live the life you desire without having to work or reply on anyone else for money” in his book Secrets of the Millionaire Mind.

I hope you will take up the challenge to improve your path to financial freedom, it’s a very worthwhile pursuit.

Until next month!

Comments

4 Responses to “Planning for Financial Freedom”
  1. Annie says:

    Too right Grant. I can attest to the value of the spreadsheet. I have had one for years, and even though I do not enjoy matching receipts to my monthly statement and entering info on the spreadsheet, I do it anyway!
    It takes the ‘willy nilly’ out of things and allows saving for those things I need money for – usually home maintenance and holidays!
    Plus it makes tax returns really simple!

  2. grant says:

    Thanks Annie
    Very few people (including me) don’t realy enjoy the nitty gritty that comes with record keeping, but I would imagine that most people (especially me) enjoy the benefits that come from being in control of their finances.
    Keep up the good work!