Babblermouth

May 15, 2007

Financial Freedom Series 5 -- Money

Imagine Building A Car From Scratch

To understand the function of money, imagine what life would be like if you had to make everything from scratch. Like, for instance, a car.

It's not impossible for a person to build his (or her) own car, but it may take the majority of his life to do so. First, he would have to study how cars work. Then, he would have to travel the world to collect the raw materials (not to mention the time to construct the vehicles needed to transport the raw materials). He then would have to refine the materials into usable components. And lastly, he would have to assemble the components.

Spending Money Often Saves Time

As you can see, building a car on your own can save you tons of money -- but it would instead cost you thousands upon thousands of hours, perhaps even an entire lifetime!

In my previous article, I demonstrated that time is supremely valuable because it cannot be reclaimed. Well, here's the dirty little secret: that's not entirely true. We can save, store and exchange time through a convenient tool called "money".

Your Paycheck Is Just Time Converted Into Money

If you don't believe it, think about your primary source of income. Many of us get our income from employment. But why do we get paid for our work? It is because our employers know that there are other things we would like to do with our time. In essence, we exchange time for paychecks.

As the car example shows, spending money is like saving time. When you buy a car, you are saving yourself the thousands of hours it would take to build it yourself.

Some Spending Is More Valuable Than Others

But before you start buying everything you want under the guise that it's saving you time, here's the catch: not all time saved through spending money is valuable. If you do not make valuable use of the time you have saved (that is, managing your actions to build toward the completion of goals that are aligned with your values), the money is wasted. It can be valuable to pay somebody to mow your lawn if you use that time to do something that is important to your goals and values. If you pay somebody to mow your lawn while you sit on the couch and watch TV, you would have been better off mowing the lawn yourself. At least then you would have gotten some exercise!

Time Really Is Money, So Use It Wisely

And so, the old saying is true: time IS money. Or rather, money is time. Since time is so precious, it places an important duty on our shoulders to ensure we use it wisely. Money wasted is time wasted. Use your money to help you directly or indirectly accomplish those goals that help you live your values, and you will have used your money wisely.

The Complete Financial Freedom Series

April 5, 2007

Financial Freedom Series 4 -- The Value of Time

Time Is An "Equal Opportunity" Commodity

Time is so commonplace that its value is often overlooked. The extraordinary thing about time is that each day is equally given to everybody (with the exception of death, of course). No matter who you are, or what happened yesterday, we get as much time as everybody else to make today better.

Time Is Valuable Because It Can't Be Earned Back

Time is valuable in a way that nothing else is. Most things are valuable because they are rare. But time is valuable because of its most important aspect -- we can't get it back! Not only can we not get it back, but we HAVE to use it whether we wish to or not! Everything that we do is paid for in seconds and in minutes. Even doing nothing is paid in seconds and minutes! For this reason alone, we must cherish time. It is as important to our lives as the air we breathe.

The Secret Is to Control How We Spend Our Time

We may have no control over WHETHER we use our time or not, but we can control HOW we use our time. When there are many things that must be done, how can we gauge what is a good use of our time and what is not? The answer is as simple as looking at our goals and values. Anything that moves us closer to accomplishing goals that help us to live out our values is a good use of our time. Technically, anything else is not.

The Complete Financial Freedom Series

April 4, 2007

Financial Freedom Series 3 -- Goals

Goals: The Next Step

Hopefully you have experienced for yourself what incredible influence you have over your destiny through the simple tools of purposeful action and value-driven living. Next, by developing meaningful goals, you will harness that power and direct it toward accomplishments you may not have previously believed yourself to be capable of!

Goals Are Like Building A House

To understand goals, look at the process of building a new home. Before any building takes place, a blueprint is created. Why? Because a team of builders can't properly build anything if they don't know what the outcome is supposed to be. Sadly, we are much more cavalier with the construction of our own lives -- few of us have a blueprint for our own future.

There is a definite order to the way homes are built. Doors can't be installed until walls are built. Walls can't be built until the foundation is poured. And the foundation can't be poured until the ground is leveled. Goal building is similar. In most cases, you cannot get from where you are to where you want to be in one simple step.

Build Your Goals, Beginning With The Future

If your goal is to donate one million dollars to charity, and you've never owned more than one thousand dollars' worth of anything, then you will need to work through some intermediate steps along the way. To discover those steps, you need to backtrack from the ultimate attainment of your ideal life, using the principle of cause and effect. What would you have to do to raise that much money? Would you earn it through business or fundraising? If through fundraising, how would you meet eligible donors? Keep backtracking until you reach where you are now. You then have a series of small steps to take to get from where you are to where you want to be.

Accomplishing Big Things With Small Steps

While it may be daunting to think about going straight from where you are now to where you want to be, it looks much more believable when many small steps are put together. For instance, the first step might be to simply save $1 every week. The next step might be to save $2 every week. Then, to earn $2 more every week (saving $4 per week). While saving a million dollars can seem downright impossible, saving two dollars can seem ridiculously easy. By completing all of the small steps toward your goal, you eventually will have followed all of the steps toward your goal! Marathon runners don't leap from the start line to the finish line, they take one step at a time.