The Six Levels of Knowing Your Finances

There are six levels of people knowing their finances. Level one is where most people

are, unfortunately, they have no clue and living paycheck to paycheck. Others are at level two. Perhaps they own their house and may have started a retirement fund. Level three - they own a few rentals, they understand the game, and they are working towards becoming a one hundred percenter which is when you have financially passive income and are close to being financially free.

Then level four is where a lot of you are, maybe you could retire, you're doing a few syndicates, you’re well in the trenches, and you've got a good game going, just getting on that financial freedom piece. Level five, your ship has come in, you’re financially free, you get to wake up every day and choose what you want to do.

I spend about no more than 5% of my working time just moving money I want and looking at packages. All I do is waterski. I find good, talented people that know what they're doing and I let them do all the work and then I can just go out and get the goods and enjoy them because that’s what works for me.

Level six is when you’d have a blind trust, and you just put all your money into that, and you wouldn't even spend that 5 to 10 hours. You just have somebody that you trust really well managing your investments. Often people will ask themselves which category they fit into. It’s so much of a mindset shift. 

That’s when you get into the ABC’s of finances: 

A: offense; how can I earn more? 

B: defense; how can I live within my means? 

C: how can I learn how to hopefully not get rid of debt but how to invest wisely?

I put rocket fuel into the whole plan. So, A is offense, B is defense, C is investing wisely. Look at each piece of those. How can I earn more? Can I get some sort of a new certificate or can I get a side hustle? If I’m already flipping homes, can I bring on a partner that might do a lot of the marketing? Find the person who can do the pieces where you’re weak. Maybe you’re good at sales or maybe you’re good at marketing and you need that salesperson. 

Just start looking at how you can play your game better, that’s what I did. I got into real estate and started listing and selling and making some money. I got that ball juggling, “Oh, let’s buy some rentals, let’s flip some homes. Oh, let’s do some exchanges.” I just kept learning more, growing. 

Keep in my mind all of this happened over 15, 20, 25 years. It's a get rich slow plan. When you see somebody with all of the bling and Rolls-Royces and jets, run. That ain’t it. It’s the wealthy barber, it’s the millionaire next door. I’m not saying to have a frugal, scarcity mindset. I'm saying don’t mindlessly keep up with the Joneses buying crap you don’t need. That's hard to do sometimes but I’ve seen so many who get caught up in that. I've met tens of thousands of investors, realtors, and business people, and I've met less than a thousand who are financially free. Think about that, everybody wants it, but few get it.

Listen to the full podcast here: https://lifebridgecapital.com/2019/11/ws380-becoming-financially-free-with-tim-rhode/