As some of you may know, I'm writing a book! And it's my hope that this book will help families to improve their Financial Planning so they can enjoy more freedom in life. While I'm writing the book, I thought it would be helpful to share some of the chapters with the world.
The Financial Freedom Zone vs The Financial Frustration Zone
The Financial Freedom Zone
Most young families that I work with want to be more financially secure. They want to have more freedom with their money, so they can have more freedom with their time and their life. They want to be able to do what they want, when they want.
In order for families to be able to do that, they need to have; • Strong cashflow, so they can enjoy their lifestyle guilt free. • Low debt levels, so they can live their life stress free. • High asset levels, so they can feel confident about their future and live life carefree.
I refer to the above situation as the Financial Freedom Zone. Reaching this zone is what Financial Planning is all about. When families reach this point, they have much more freedom in life because they have the financial security to live life on their own terms. Essentially, they can afford to ‘work to live’ rather than ‘live to work’ which means they can spend less time working and more time doing the things they love with the people they love.
The Financial Frustration Zone
Unfortunately, most young families that I first start working with aren’t where they want to be financially. Instead of being in the Financial Freedom Zone many young families find themselves in the Financial Frustration Zone.
Families often find themselves in this zone due to 3 common money problems which include; 1. Tight Cashflow – They’re expenses are at the same level or a higher level than their income. 2. High Debt Levels – They hold lots of debt in the form of credit cards, personal loans, car loans and mortgage debt. 3. Low Asset (Savings) Levels – They don’t have much in the way of savings or investments for their future.
These common problems cause many of the young families that I meet to feel very frustrated. Often when we first start working together, I’ll hear my clients say things like; • “I feel like we should be doing better than this”. • “I feel like we should be further ahead than we are”. • “I thought we’d be a lot better off by now”. • “We’re earning good money but don’t feel like we have enough”.
And when I hear them say these things, I can see the frustration and confusion they’re feeling. They often feel this way because up until that point they thought they had been doing all the “right” things. Usually they’ve been working in a good paying jobs, earning high income for many years, but despite all this, they are still not in a strong financial position.
So, what stops these smart and ambitious people from succeeding? The answer to that question is - MISTAKES.
In my next post, I'll dive into what these Mistakes are.
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