086: Your Most Valuable Resource – Friday Fundamentals

People go their whole lives deferring income, experiences, and happiness, in hopes of cashing in on those things “one day”. They forego living a quality life in hope of one day living that life they dream of. But why? Why do people put all of their eggs in a basket 30 years into the future? Is it just because this is “normal”?

Here are some common life deferral mindsets and actions:

  • Invest only for appreciation far into the future
  • Save, save, save only to build a nest egg for retirement
  • Forego life experiences – travelling, learning new things, picking up new hobbies, & spending time with family, – in hopes of doing those things some day.
  • Spend all of your energy shrinking, rather than growing

The Dalai Lama was asked what surprises him the most in a recent interview, he offered this insightful response:

“Man. Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived.”

Another common example of life deferral is investing in a government qualified retirement account, like a 401(k), Roth IRA, or 403(b) retirement plan. One restriction with these types of plans is you are not able to access your money until age 59 1/2 or later.  You are deferring income now, in hopes of reaping the benefits in the future. But why defer income now? What if there was a way to invest now, realize the benefits now, and still build wealth in the future?

Investing in income producing real estate is a great way to both build wealth and achieve financial freedom long before your retirement years.  The income producing part of this is vital. It’s a huge differentiator between investing in real estate and government qualified retirement plans.

The two key pieces here are wealth building and financial freedom. Let’s break these down and understand why each is equally important.

Building wealth for the future is what people who invest in retirement accounts are doing. This wealth will be part of your legacy you leave behind to the things, people, and causes you value. Building wealth will allow you to impact the world in the ways you want.

Achieving financial freedom is equally important, but much less common.  Simply put, financial freedom gives you the ability to do what you want, when you want, where you want. Achieving financial freedom from passive income, will allow you to retire from an earned income, and now do whatever it is you want.

When you combine financial freedom and wealth building, you won’t have to defer experiences into your retirement years when you are not as able to do the things you want.

Now just because tomorrow isn’t guaranteed, I don’t recommend putting your life savings on black at the roulette table. By understanding that your time is precious, you’ll instead carefully and prudently invest your time and money. You’ll treat your time as your most precious resource.

These are the best years of your life. Don’t waste them blindly following what society says you should do. Blaze your own path. Create your own story.

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