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Why you need to take control of your financial life? January 22, 2009

Posted by shaferfinancial in Finance, Uncategorized.
Tags: , , ,

Truth is, most people don’t realize they have ceded control of their financial lives to others.  The first realization is usually with debt.  Debt is the obvious place because most people at some time in their life struggle with their debt service.  Folks like Orman and Ramsey take advantage of this and direct people’s wrath to debt and the banks.  But that is where it usually stops.  Much teeth knashing around debt, how to get out of it, how liberating it is to not get in debt, etc.  While all that might be true, in my opinion the debt is really a straw man argument.  Debt is part of cash management or one’s risk and certainly needs to be managed properly, but the real issue of control is the other side of debt or cash flow/investing.  This is where the likes of Orman/Ramsey fail their devotees. And it is where the majority of people who responsibly manage their debt fail to realize their lack of control.  Suggesting that someone take control of their spending is fine, but what really needs to be controlled is incoming cash flow.  Most people cede that to others either by being life long employees and/or by giving their savings to others to manage. 

For the time being I will lay aside the employee question.

Let’s talk about managing your money.  Truth is with a small initial stake huge estates have been created by investors.  Many people have turned a few thousand dollars into over $10M in relatively short periods of time (less than 20 years) by investing.  Using those same ideas millions of folks can build estates over $2M fairly easily if they willing to learn how.  But it won’t happen by turning your money over to anyone else.  No mutual fund money managers, direct money managers, insurance companies, real estate sales people, stock brokers, etc. can get you to the returns you need without your active involvement.  And by now everyone realizes politicians will sell you out.  I’ve said this before, but it bears repeating, almost everyone that has built wealth has created a plan before it happened.  And before they created a plan they did research, which served as the basis of the plan.  This is the story of wealth.

So, when I advise folks to take control of their financial life, it is based on the collective experience of those that have succeeded in building wealth.  It is based on the known facts surrounding that success.  Not a recipe, but a living plan, that puts you in the driver’s seat.  Why do you need to take control of your entire financial life?  Because, if you don’t you chances of success are small. 

From a philosophical point, every person that takes back control of their lives from an employer, the government, experts, will find themselves transformed emotionally and intellectually.  And everyone will be better off because of this.  The ultimate goal of human beings is self-determination.  Taking control of one’s financial life is a requirement for self-determination.  No, this is not a call for going  it alone.  You will find yourself with a higher degree of connection to others as you become more self-sufficient.  You will find your ability to help others will rise.  You will find your time will be increasingly spent on what you want to spend it on.

It is always surprising to me to talk to people who politically/philisophically are attuned to self determination, but refuse to take control of their finances from the “experts.”  Want to get some dirty looks; ask someone right after they have given their dissertation on their libertarian/self determination views if they invest their money themselves or trust their money to a money manager or mutual fund manager!  Now that’s a show stopper!!!!

But I digress.

Why do you need to take control of your financial life?  To live the life you were born to live!



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