The Tyranny of Money
There’s a trite saying that I hear over and over again. “Money isn’t everything.” And it’s true. Money isn’t everything… when you have plenty of it. However when you don’t have enough, money can be the ONLY thing. It can dominate your thoughts and haunt your dreams. Money will color all of your decisions from where to eat to where to work. In short, when you don’t have enough money, it controls you and you start to have a money-now mentality.
The problem with having a money-now mentality is that you’ll start to miss out on opportunities that could put you on the path to being free of the money monkey forever. It becomes a dangerous cycle that can rob you of the life you deserve.
Probably one of the worst “the money monkey screwed me” stories came from a friend of mine who’d just graduated college with a computer programming degree. He got a good job, got married, bought an expensive home and a couple of expensive cars and basically started living paycheck to paycheck. After a couple of years one of his college buddies came to him with an job offer to work for a small startup company. The money was significantly less than he was currently making, but to make up for it the startup offered a lot of stock in the company. Unfortunately my friend couldn’t afford to take the pay cut. He stayed at his current job.
Are you ready for this? One month later the little startup company was bought out.
What would have my friend’s stock been worth? $1.2 million dollars. My buddy missed out on $1.2 million dollars for one month’s work just because he couldn’t afford to take a chance. Somehow I don’t think he got much comfort when people told him money isn’t everything.
The moral of the story is that if you want to be successful in life, I mean really successful, you have to stop letting money make decisions for you and the only way to do that is to spank that money monkey! You need to take stock of your current situation and develop a plan to take control of your financial life. Here are a few ideas to get you started:
Work Smarter, Not Harder
Most people’s solution to getting more money is to work harder. These people think that taking on another job or working more hours will help them out of their financial problems. The trouble is that when you work harder and longer, your life suffers. Your health will suffer because you won’t be able to take care of yourself properly. You won’t have enough down-time to unwind and relax. Stress can wreck havoc on your body and your mind. All the money in the world won’t help you if you die from a heart attack.
In addition your personal life will suffer. How will your significant other take all of those extra hours of work? How long can your relationship stand the neglect? Working harder only throws other areas of your life out of balance.
The solution is to work smarter, not harder. What do I mean by working smarter? I mean you need to spend some time developing passive streams of income. Are you earning money when you sleep? How about when you’re fishing? Your source of passive income can be rental real estate, an online e-store, a blog, a book you wrote, or any number of a hundred things! Passive income is the real path to financial freedom.
Don’t misunderstand me, it takes a lot of work to develop a stream of passive income. But once you do you’ll have something putting money in your bank account twenty-four hours a day, seven days a week!
Consolidate High Interest Debt
I’m sure you’ve hear the saying “A penny saved is a penny earned.” Well that’s the premise we’re working on here. Take a minute and write out all of your monthly bills; your credit cards, your house payment, your groceries, everything. How much are you paying to your credit card companies? What’s your interest rate? In most cases you can find some way to lower those credit card payments. Maybe you can pull out a second mortgage at a lower interest rate or transfer your balances to another credit card with a 0% interest for a year.
Even in the worst of cases you can always call a debt consolidation counselor and get on a payment plan that will often be a lot lower than what you’re paying now. But don’t stop there. How much are you paying for car insurance, home/renters insurance, life insurance, etc. Why not spend a little time calling around for quotes? After consolidating your high interest cards and finding cheaper insurance, you may have saved yourself a couple hundred dollars a month.
Invest
You could spend your extra money on frivolous dinners and other luxuries, but if you want to be free of the money monkey you need to invest your money. There are all kinds of ways to invest your money. You can invest in the forex market, real estate, stocks, bonds, mutual funds, or whatever! Stocks tend to be the most popular choice, but what you choose to invest in should depend on your risk tolerance. Some markets are more volatile than others. Make sure you do your research before jumping into any type of investing.
At first investing can be difficult. It’s hard to diversify when you only have a couple of dollars. However there are some options for those of you who want to invest in the stock market and still want the safety of diversification. Sharebuilder.com will let you choose the stocks you want to invest in and set up an automatic investment plan to purchase those stocks. The cool part about sharebuider is that your money will be automatically allocated according to whatever diversification strategy you want. Whether you’re investing $10 or $1000, it will be divided among whatever stocks you’ve chosen. Check out their website if you want to learn more. It really is a great way to get started investing.
However if you’re a risk taker like me you’ll enjoy actively trading more. I tend to swing trade, that is, I hold onto an investment for a few days before selling it (as opposed to day trading where investments are bought and sold within a day). Swing trading doesn’t require constant monitoring like day trading does so it’s a much better option for me. I can also take advantages of larger moves that last more than a single day. Whatever you chose to invest in, make sure you do your research. Get whatever books you can get your hands on before you risk your hard earned money. Remember that you should be investing your money not gambling with it.
Do it Now!
Too many people get stuck in the planning phase of taking control of their finances. Your plan is worthless if you don’t follow through with it. Take some time right now to make an action plan. Write down specific steps from beginning to end detailing precisely what you need to do to spank your money monkey. Success and failure are often determined by nothing more than your action or inaction. When you don’t have enough money, it controls your life. There’s a quote from master salesman and motivational speaker Zig Ziglar that’s stuck with me ever since the first time I heard it.
Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the “gotta have it” scale.
How true. When you have plenty of oxygen, it doesn’t matter. You don’t even think about it. You’ve been breathing all day and probably haven’t thought about it once. But if someone were to submerge you in ten feet of water, you’d be thinking about little else after around thirty seconds.
Money is like that too. When you have plenty of it, it hardly ever crosses your mind. But when you don’t have enough of it, it will consume your every thought. Until you have enough of it, money will rule you. Don’t let it. Take control of your finances and your life. Don’t be afraid to after the success you deserve.
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