Learning Your Money Goals - The Key to a Strong Wealthy Foundation!


DISCLAIMER: No part of this website should be taken as financial advice. This is just what I've learned on my journey to financial freedom. If you need more help, consider consulting a certified financial planner or a certified accountant or any other certified professionals - not some random dude on the internet.

Personal Finances Is The Foundation To A Stable Life

Coins being stacked precariously as a hand pulls away a coin at the base of the stack.

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There are maybe three key things in life you need to take care of. The first is your health. The second is your social relationships - especially those you're closest to. And the third is your personal finances. Now, just because I don't think personal finances come in the top three of the main important things in your life doesn't mean it isn't vital to you achieving the top two most important things in life. In order to get healthier, you'll need a certified personal trainer, access to healthier foods and to make regular doctor visits. If you live in America, you know how expensive healthcare can get.

In order to take care of your family, you need money. How else will you feed your family? How do you guys go out and have a good time together? Sure, there are some things you can do without money. But can you go to the movies or out to dinner at a fancy restaurant without money? Probably not. So getting your finances in order is the foundation to an overall healthy and happy life. One of the things you should make sure you do before you start a business or make crazy vacation plans is to take care of your debts. So let's talk a little bit about debt, shall we?

Debt Isn't Evil...

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Debt is important to talk about - but not for the reasons you may think. Managing your debt is key to building your wealth foundations. What's your interest rate on that mortgage? Should you opt for the 15 year mortgate or the 30 year? Maybe you should rent? How long are you going to take to pay off that car? And the questions go on and on, depending on your current situation. Again, it is crucial that you manage your debt and don't let it run away from you.

Your average financial guru will tell you that debt is evil and you should stay away from it. Well, debt isn't evil when some rich, typically white dude in a sharp suit takes out millions or billions of dollars of debt for a new business venture. Everyone calls it leverage and applauds him for his debt. But when a poor person uses debt? They get punished for it. Of course, the way the rich business person uses debt is different from the way the poor person utilizes debt. There's a bunch of people smarter than me in finances who can explain the difference a lot better. But to me debt is debt. It means you are utilizing money that you don't have now, but promise to have in the future. In other words, you're taking the burden off the present you's shoulders and putting it on the future you. Debt is a tool. And if a rich person can use it as leverage, then so can a poor person!

Am I saying you should accumulate debt? No. The warnings about debt are true, even though I'm not so afraid of debt. You are kicking things down the road and putting a heavy burden on future you. When you catch up to future you as time passes by, then you're going to wear that burden. And you'll hate past you for placing that burden on you and your family, most likely. But debt isn't a boogeyman. It isn't inherently evil. It's neutral. It's a tool. And if you can utilize the tool correctly, then you can get what you want out of life. That's basically why debt in the rich person's hands is leverage and in the poor person's hand, it's a burden. Poor people don't know how to leverage their debt to put them in better financial situations.

And sure,  just to be safe and to save people from having to think too much, I would recommend that no one get into credit card debt if they can help it. It's just easier to stay out of trouble for most people. But if you understand credit cards and you really know how much debt you can take on and when you can pay it off, then I guess you'll have to make the call as to how you want to handle debt. But many people beat themselves up over debt they accumulate. Don't beat yourself up on debt's behalf! It doesn't care about your feelings at all. It can't care about anything because it's a simple tool - an indicator of where you are financially. If some things need to be adjusted according to your financial statements and debt balances, then adjust it so you can get out of the red.

Debt is nothing to fear when you have a detailed, realistic and automated plan in place to take care of it.

Being Rich Isn't Wealthy

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To clarify things here, being wealthy isn't the same as being rich for me. Being wealthy means having systems in place to prepare as best as possible for financial turmoil. When recessions and depressions hit, it shouldn't be a problem for my finances because I already have a system in place to take care of my money in that particular situation. Being wealthy means if I have to go to the hospital or if something happens where I can't work any longer, my investments are still making money for me, and my businesses are still profitable without me and I already have more than enough to cover the emergency expenses.

Being wealthy doesn't mean just being prepared for the bad, though. It also means being prepared for the good. It means I can go to the beach when I want - if I want. I can really dive deep into different cultures and explore different countries and continents when I want and still make money while doing it. That's what wealth can afford me. And sure, it can afford me the luxury things I may want - like those latest camera glasses or the latest video game console.

Sure, you could get those things when you're just rich too. Being rich means you have a lot of money - typically through a high income. It would be best if I could have a high income and security in place to take care of my income - be rich and be wealthy at the same time in other words. However, I don't have to wait to be rich to be wealthy. Because wealthy is the lower hanging fruit and the thing I can control the most right now, it's what I'm most focused on. And focusing on wealth like this will eventually lead to me getting rich.

But financial security is most important right now. I don't want to go back into debt, even though I'm getting out of it reasonably fast in comparison to others who got into debt and couldn't get out for years. For the sake of clarity,  I do want to mention that I am referring to building wealth because it is the easiest, most accessible thing I can do that will make meaningful changes for the better in my financial life. It'll give me the strong financial foundation I'm looking for.

Get rich quick schemes? Nah, they ain't for me. I'm all about getting wealthy right now - which means having more than enough money to take care of myself if things go wrong while things are going decent in the present. And again, building wealth will build riches in the long run.

Skills Are A Part Of The Wealth Building Journey

You will only rise to the level of the skills you currently have. If you want to go farther in life, then you have to give more value to the world in order to get more value out of it. Specifically, you have to give more value to a target audience so they'll pay you more money for what you have to offer. Sounds easy on the surface, but this isn't an easy thing to do. But if you want to go from being broke to building wealth, you have to build up skillsets that are valuable to the marketplace.

No one cares about how special you think you are. They don't care about your hardships. They may sympathize and empathize with you, but at the end of the day you haven't brought any value to the world in their eyes. If you had, you'd get paid. That just seems like that's the way things work - in general of course. There are exceptions to the rules, but chances are low you are the exception. I wouldn't start off assuming I was the exception to anything until I proved it if I were you. Why would you start off believing in the most improbable answer without proving the most probable one wrong first? In other words, why put the odds against yourself when you want to better yourself?

So chances are high that you need to build your skills in order to build your wealth. What skills can you provide to others that they find are worth paying for? If you don't find the answer to this question, then I can't see how you'll likely get that wealthy lifestyle you want. 

Laying The Foundations Is Important.

If anything comes out of this, know that I believe it's best that we build a strong foundation before we try to get fancy and build a pretty building. Why? Because a pretty building won't stand for long if it doesn't have a solid foundation! Personal finance is the stability to an overall better life. You don't have to start a business if you don't want to. I just so happen to want to because, why not? It's cheap to do and I'll learn new skills I can put to use in the long run.

If you want a more stable life, then you have to plan ahead and get your money ready for the different possible situations that will come into your life. Build emergency funds. Get ready to set aside money for investing. Automate everything - including your savings and paying your bills. Make it easy to save money, pay your bills and to invest.

But what do I know? I'm just some dude with a blog.

Jerrin Finney is the author of this blog. Everything typed here comes from his life experiences. No part of this blog shall be taken as financial or career advice.