Financial Independence Day 7/8/07
Stewart H. Welch III, CFP, AEP
Founder, The Welch Group, LLC
Financial Independence Day
“Financial Independence Day”
Earlier this week, we all celebrated our country’s independence, a freedom that was won through the blood, sweat and tears of many brave Americans. Why not use our country’s Independence Day as a symbol for declaring your own financial independence? If the heroes of American Independence can achieve greatness, so can you. Here’s how to get started:
Begin with your dreams. As children we had dreams, many of them. We dreamed of becoming an astronaut, a cowboy, a fireman, a movie star, a ballerina, a fashion model, a nurse, a teacher. Somewhere between childhood and adulthood, we quit dreaming as we began dealing the reality of day-to-day life. But today, you should make the time to pick up pen and paper and write down your dreams…what you would do, where you would go, who you would become if money and time was no object? Play a movie in your mind of what your life would look like if you were financially independent. What would you do with your leisure time? Would you continue to work? Would you change careers? Would you split your time between two homes? Would you spend more time in community service?
State your Intentions. Now, write down exactly what financial independence means to you. It is critical that you be as specific as possible when declaring your intentions. Don’t settle for, “I want to have enough money to retire”. Vague intentions will bring mixed results at best. Instead, craft a specific goal such as, “I will generate $50,000 per year passive income by age 50”.
Create your Critical Success Factors. Once you know exactly what you intend to create, make a list of at least five actions that you can take in order to begin moving toward fulfilling your intention. Again, it is imperative that these actions be specific and measurable. For example, one could be to increase your contribution to your company’s 401-k plan to the maximum allowed. Another might be to revisit your current investment allocation and increase the amount you are investing in stock mutual funds versus bond funds.
Take Action! Once you have outlined both your intentions and your critical success factors, begin executing your game plan. As you complete one Critical Success Factor, move to the next but also be sure to add a new one to your list. Your goal is to always have a minimum of five action steps on your list.
What stalls many people is that they don’t know all of the actions needed to achieve their ultimate goal so they simply do nothing. This is one of the primary differences between self-made multimillionaires and everyone else. Successful people realize that you rarely are able to see the ‘entire’ plan in your head. Instead, you know where you want to go and you can see a path that you think is the right one. Therefore, you begin your journey with an expectation that as you move forward, the path will continue to unfold before you. Successful people also don’t expect the path to be a straight one and they expect to encounter obstacles along the way. Determination and perseverance are their keys to success. They never allow anything to take their focus away from their destination and they continue to move forward until they arrive. Happy Financial Independence Day!