Leverage. The Key to Your Financial Breakthrough

 

Now that I've entered a new decade in life, I find myself thinking more about my financial future.  Recently, I was reminded of a conversation I had with a former co-worker which may hold the key to my next breakthrough.

She shared her words of wisdom during a time when her job position was in jeopardy.  After working for the company for nearly a decade, she was about to be fired with very little notice.  Instead of being overcome with feelings of uncertainty and anxiety at the thought of losing her job, she was filled with a sense of peace.  Before her last day, she explained that she was looking forward to having her life back.  When I asked how she was able to be so positive about this transition she said the following "if you have an apple tree, you have to make sure that you plant some of the seeds back in the ground so you can always have more apples."  I knew exactly what she was referring to.  It was an illustration to explain that it was foolish to spend an entire paycheck without setting aside money for the future.

I'm a pretty decent saver.  So I didn't really view her advice as new information. I've always saved a portion of my earnings for a rainy day.  But, then I realized that her planting seeds analogy could have an even more powerful meaning.
For the most part, we operate in a system that works something like this:

• In order to acquire goods and receive services, we must exchange it for cash/currency.
• The predominant way in which most of us receive currency is through our employer or business.
• If we wish to increase the amount of currency we have access to, we can get a raise, find a higher paying job, launch a side hustle, borrow, or save from what we earn to have excess money for when needed. 

Whenever I've wanted to increase the amount of money that flows into my life, would job hop every two years to take advantage of the higher starting salaries that corporations offer to new hires with experience.  Eventually, I realized that I wanted access to larger chunks of money at once instead of a fixed amount every two weeks.  Once I started working for myself full time, this desire became a reality. 

I've now realized that money is a more effective tool for income generation than time. The true meaning of financial freedom/independence is when our passive income exceeds our living expenses. My goal is to position myself to reach a level my living expenses are completely covered via passive income.  Basically, I'm preparing to transition from earning active income (money that comes from a job or business) to living solely from passive income.  After operating a cash flow positive business, I placed a chunk of the money in high interest earning savings accounts.  I've earned a respectable amount of money in interest from my Amex Savings account.  This has really increased my desire to really step up my passive income earning potential.

There are multiple roads that lead to true financial independence, but in order to get there, we must learn how to leverage money.

You can choose to view money as something we spend in order to support your lifestyle or as a path that can help lead you to financial freedom.

I can't look at money the same way anymore.

When my coworker advised me to plant seeds before consuming the entire piece of fruit, she was encouraging me to leverage some of the money to create additional abundance (more fruit).  The very first step one takes on the path to financial independence is to save a portion of what you earn.  You need to create cash reserves.  I know people who talk about their dreams and what kind of life they want to live. Unfortunately, they have little to no money in the bank so they remain in their current reality.

When I quit my job 3 years ago, my business was not earning enough money to pay my bills.  Quitting was an act of faith.  What allowed me to take the leap was having over 1 year of living expenses saved.  I had the luxury of working on my business for the first year without the added financial stress of having to support myself from it.  How did I save that much money? It wasn't that hard.  Basically, I decided that having control over my time was more important than buying a bunch of stuff. I got serious, stepped out of my comfort zone, and lived on much less than I earned.

Today, I want you to make a shift in how you look at money.  Yes, you can spend it to acquire objects, but you can also leverage your income to design the life you want.  One definition of the word leverage is "use something to maximum advantage."  When you simply spend every cent you earn, you are using money in one way and one way only.  Money should be spent, but it should also be utilized to create additional income.  How you leverage your money can mean the difference between surviving and thriving.

 I am all about thriving.