The Longer You Misunderstand Financial Independence…

…The longer you will be financially dependent. True story! What does financial independence mean to you anyway? 

• Does it mean you have a job that pays the bills?

• Do you like working full time and climbing the ladder towards nice promotions year after year?

• Do you prefer two or more part-time jobs in order to have several income streams, or are you working these jobs because neither would cover your monthly expenses by itself? 

• How much do you plan your net worth to be by the time you are sixty-five years old?

• Is your current financial strategy congruent with your plans on being worth a certain amount of money by a certain age? 

• Are you planning on working until age sixty-five or beyond, or are you planning on early retirement?

• Does all of your income come from jobs or a job, or are you steadily building streams of income unrelated to a job?

• How many income streams have you built so far that will keep producing cash after you stop working for someone else? 

• How many cash-flowing income streams do you build each year? 

• How many years ahead do you plan when setting up your financial goals?

• What are your financial goals in relation to your values and views on financial freedom?

Let me tell you, I had not asked myself any of these questions until I was thirty-six years old. And, I mean, I was really clueless. Not telling you this to brag — willful financial ignorance is nothing to brag about. The funny thing is that, from today’s reality standpoint, I wasn’t drowning in any credit card debt like most people in the United States. Far from it! I did not own a credit card until I was thirty-five! But I was living under the illusion that at my education level — Doctor of Musical Arts, you see — I didn’t have to worry about money because money was for unimaginative and corrupt people to worry about. 

I have described my investment career in some detail in Chapter 11 of my book, so what you will read here is additional information intended to make things even clearer on how money works in the real world, as opposed to the world that fairy tales and then school impress upon us early on in life. 

I’ve had several mentors by personal choice during my financial development. While some of them I’ve followed for years, I’ve paid others to teach me what they know so I can apply it and become successful and independent. Every single one of my mentors is a self-made millionaire, at the very least. Some are billionaires. Can you guess whom the most calloused, honest, and harshest mentors are? That’s right — the billionaires. They’ve long stopped worrying about others’ opinions or hurting others’ feelings. But I’ve learned some priceless concepts from them. I was not a receptive student at first, because my feelings did, indeed, get hurt listening to these people speak, or reading their books. I wasn’t able to fully internalize the concepts on wealth-building until I realized that my opinion didn’t matter because, obviously, I had been dependent on people much wealthier than me to have a job and earn income in the first place. I got the strongest taste of that dependence when the Syracuse Symphony Orchestra went bankrupt in 2011. So, I decided to find out what it would take to get on the other side of this equation. There were many questions, of course, such as: 

• Did I have the proper work ethic to improve my financial situation? 

• Did I possess the intellectual ability to understand important long-term financial concepts or the skills necessary to become wealthy and financially independent?

• If I didn’t readily possess this ability or any of these skills, could I build the ability and learn and apply the skills, and how long would it take? 

• Could I become wealthy without compromising my ethical principles? 

• What were the best ways to provide something that others needed without jeopardizing their ability to be independent should they choose to become that way?

• Could I persevere through a self-imposed long-term financial plan, with all necessary adjustments, without moving off course while real life was happening on top of my plan?

Questions, questions, and more questions! I realize that some of these self-inquiries can be enough to intimidate certain people but, please, understand that nothing in your life will move forward unless you constantly ask yourself questions with regards to your current comfort zone. You think this is tough? Wait until I write a post on health choices. Five chapters of my book are dedicated to health alone. Your finances are no less important, because money influences your life choices. One of my most cherished mentors has a favorite question and an answer to it: “Thinking financial education is expensive? Try ignorance!” This is a relatively kind mentor. Here’s an example of a harsh mentor: “If love got the job done, you wouldn’t all be so damn poor!” or “If you think money can’t buy happiness, you clearly don’t know where to shop!” He doesn’t always say these things in this civilized a way, either. Mind you, this man is a self-made billionaire talking to people who are already multimillionaires. As you can see, everything is relative. 

I have not paid the harsh guy to teach me about money, at least not yet. I did pay the kinder one, though, buying two of his online education programs and, to the present day, I believe these to have been two of the smartest and most responsible purchases I’ve made in my life. Thanks to his financial education, my boyfriend and I do not have to worry about jobs anymore. 

Such was not always the case, however. I became a registered nurse after being a violinist for twenty-nine years. I started nursing school twenty-six years into my music career. I did it because I realized that, with a shrinking market for classical musicians and having to compete with up to 500 people for a single orchestral position, I could not remain a freelancer until the day I die. Things change. You get old, to say the least. I started nursing school in the memorable year 2008. Millions lost their retirements, as you may recall. I didn’t even have a 401(k) at the time, nor did I have a clue that a 401(k) was a profoundly ignorant way to invest and an excellent way to lose your retirement money. 

When I started working full time as an RN, this lovely retirement plan was offered to me. I had it for a couple of years and then, having learned from my mentor that it was a bad idea, I pulled all my money out of the retirement plan and focused on investing primarily in real estate. The value-of-investing epiphany came with the realization that my bank was lending my savings account money to rich people at an interest rate much higher than the account was earning for me.

But here is what prompted me to seek financial mentorship from self-made millionaires ten years ago. It was the shock of seeing nurses with years of seniority in the workforce sharing among each other how broke they were or what flashy luxury item they had paid for with a high-interest-rate credit card. They worked overtime shifts to cover these expenses, which they couldn’t afford otherwise. Wow! I was really at a loss trying to comprehend these behaviors. Other similarly mind-blowing examples of horrid financial practices were certain doctors (nothing personal, but usually surgeons) living in mansions and driving their third or fourth sports car. Really, dude? Are you a professional racer, or am I missing something? It was like a competition. I already knew these people were several hundred thousand dollars in school debt, so add to this a couple-million-dollar home, and a couple of sports cars. Nice! And malpractice insurance, of course! And family — spouse, kids, you know.

It didn’t take long to understand that some people simply couldn’t resist the temptation of displaying their high socioeconomic status, or what they thought was a high status, to the rest of society. 

This whole puzzle of flat broke healthcare workers up to the eyebrows in credit card debt was not what I had envisioned encountering when I joined the healthcare workforce. After all, these were the smartest people out there, no? Believe it or not, I once even donated money to a broke senior co-worker who was getting paid an hourly rate twice mine! There surely were numerous surprises during the new get-to-know-you process and just as numerous occasions to find out that, yet again, I was a misfit in so many ways. 

It is important to draw a line when it comes to your desire to fit in yet not compromise your values. You’ll be surprised if I tell you about the multiple times when I’ve had to draw a line in the sand and still do so.

Honestly, I had looked so much forward to having a full-time job and live a comfortable life. It was my boyfriend, Jeff, who at one time vented his frustration by saying, “With the way things are going, I’ll be probably working as a nurse till I’m eighty!” and woke me up, made me think harder about all this. I took his statement very seriously and thought, there’s got to be a different way. A way that would give us control over our finances! Obviously, relying on savings alone to secure a decent retirement was a complete lunacy, according to simple math. And we already knew what could happen to a 401(k) the moment public panic hit the stock market again. 

A year into my nursing career, I was more than determined to become a knowledgeable, reliable, competent, and hard-working nurse. But I figured this much: it was going to take several years to get somewhat comfortable in my new profession, because nothing beats experience on the job. Therefore, if I wanted to get ahead financially and not be flat broke and drowning in credit card debt, I needed to learn how to create and manage my own business, in addition to working full time. I also needed to learn how to invest and multiply the money I had been diligently saving instead of purchasing tempting luxury items and using work stress as an excuse for uncontrolled spending.

I worked on establishing a website and search engine optimization business for three years. But I also took an excellent online coaching on rental real estate investing at the same time. Eventually, the real estate business materialized much more reliably than the website building and online marketing business, and I decided to dedicate my free time to it and learn options trading as well. I have been convinced for a long time now that net worth alone does not make you rich. Cash flow from several income streams unrelated to a job, on the other hand…  

I chose for mentors people who had started from scratch and ended up building millions in business or real estate. Some of my mentors come from poor families; others come from the low end of the middle class. Understandably, I was better able to relate to these people than to those born into wealth. 

Early on, I decided to avoid college finance classes, even though those were easier to afford at the time my interest towards investing sparked. My decision was based upon the fact that the professors who taught these classes were relying on a paycheck themselves to make ends meet, and I already had a paycheck and knew how to rely on it. Some classes teach you how to invest in lower risk investment vehicles/products, which, consequently, yield lower returns. You shouldn’t use average investment methods if your goal is to achieve beyond-average results and true financial freedom.

Making your first million is said to be the hardest mental boundary to cross on the path to financial independence if you tend to doubt your abilities to make this type of money or build the assets that will help you get there. It is also well known that the more ignorant you are in the sense of not being burdened with various types of self-doubt or complexes (usually the younger you are), the easier it is to believe that you have what it takes to accomplish financial freedom. The type of ignorance that prevents many young people from becoming successful early in life is their false belief in having plenty of time and the lack of urgency to learn as much as they can financially early on. The question of self-reliance becomes more complex when you pass thirty. 

Financial independence is the skill to find, recognize, or most importantly, create cash-flowing opportunities and use these in a legal and ethical manner. Today, such opportunities are everywhere you look. All you need is a keen eye — the gift that comes with a willingness to get out of your comfort zone as soon as you begin feeling comfortable again.