When To Buy Your First House or Asset?…

Each of us are at a different place in our journey toward achieving financial freedom and depending on “our place” depends on what needs doing “first” to greatly increase the speed at which the journey unfolds.

We have heard over and over that it is assets like property that give us the holy grail of income types called Passive Income.  Then there is the human desire and family pressures to also own our own home.

Kiyosaki talks about “your home is not an asset!” where he explains that if something takes money out of your pocket it is represented as a liability in your accounting books because it is not adding to your bottom line.  This analogy is true for buying your first home to live in AND your first “investment” home because if you invest your “capital” reserve into an asset that gives you a poor\lower return\negative(as in a home you live in) (in comparison to what something else could do) you are doing the same thing as buying something that in your books is actually not moving you forward at an appropriate inertia.

The key is understanding your current wealth “inertia”, and then being able to judge whether something is an improvement on your inertia, based on the effect it has.  To explain this we draw an analogy with a car.  Initially the car is standing still and is not moving toward its (financial goal) destination.  Then you put the car into its first gear and you start moving “forward” by making yourself more effective and enabling yourself to acquire passive income generating assets and also the ability to acquire assets in an efficient way, then you shift into second gear and the cars ability to  increase its speed increases by increasing your capacity to build asset purchasing power and the speed at which the assets can be purchased, then you shift into third gear and your ability to increase speed is again larger and things start getting easier because the “assets” which you are purchasing, require far less effort to maintain and in allot of cases will continue to grow without your input or effort, this is the passive income we all want.

In the above analogy we used the words “ability to move forward faster" when we changed gear.  The key is to have sufficient initial or forward movement (inertia) in the car before changing gear. If however we change gear before we should, then our ability to maintain and increase speed or inertia is compromised and the same principle applies to our financial freedom inertia.

Our financial freedom inertia is the amount of time it takes to acquire our next passive income generating asset.  To break this down further the amount of time it takes to acquire passive income is based on how much cash(or resource) we can accumulate with in a period of time that allows us to purchase the next passive income generating asset.

So back to the buying of your first asset or property.  If your financial freedom “inertia” is compromised due to the purchase of your first\new asset you have at best delayed your forward movement (and this delay can be very significant) and worse reduced your financial freedom inertia.
It is important to have wise advisors who are able to “sequence” your efforts efficiently.  Join us at Taking Action, Making It Happen where we work together as a Master Mind to increase your financial freedom inertia together!

Jonathan Godney

Taking Action, Making it Happen with The Financial Freedom Mastermind
Join our Financial Freedom community here

How do I become financially free with certainty and in the fastest way possible?

 Open up a separate bank account and call it your “Financial Freedom Account” and start saving 10% of your income into the account every month now.  The rule with this account is that you will “never spend the money!” it is only invested and only invested in “assets” that can’t be lost and that give a monthly passive income.

Attend a group meeting at least once a month which is focused on moving you to your next step on your journey.  This group should have a “Burning Desire” and should have “Absolute Faith” that they will become wealthy and this will allow and enable you to do the same.

Find someone experienced in becoming wealthy (who is wealthy) to help you to allocate a small sum of money to a second account to help implement your Money Machine to create an extra income within weeks (sometimes days) of starting, to start feeding your financial freedom cycle.  The rule with this first account is that you will only have access to spend this money on your Money Machine when you have completed your business revenue model and Money Machine plan.

This same person also needs to help you put a money management plan in place that enables your “Money Machine or ATM” to overtake any existing debts and replace your day job and subsidise your Financial Freedom Account to catapult the acquisition of assets forward by shortening the time between the purchasing of assets to generate the best kind of income, passive income.

The above four points are practical and gives you a map to achieve financial independence and then freedom.  It also deals with the most common thing that slows you down, the time it takes to purchase assets, and implements our FIRST “Catapult Effect” directed at shortening the time line to achieving your first financial goal.  Time is the only thing we can’t get back and time is the most valuable resource we want to have in freedom so let’s put the correct emphasis on time and achieve our financial goal in the shortest reasonable time period!

Jonathan Godney

Taking Action, Making it Happen with The Financial Freedom Mastermind
Join our Financial Freedom community here

Comments on: How to Create Your Household (Forecast) Budget

Thank you for your article:   How to Create Your Household Budget

Article Comments:

The term forecast rather than budget far better describes a monthly income expense plan and puts the power in the planners hands rather than a budget that attempts to limit with rules and structure.

I would suggest a focus of working on or with your debt in addition to building wealth rather than just a focus on eliminating it.

It's far better to implement a money management system which looks after our basic needs and the existing debt, and understanding and changing the financial behavior which has not taken you to where you desire to be. There is no point in repairing debt if the behavior that caused it is not dealt with. After the behavior repair, there is also the learning of what needs to be done to handle future long term needs and desires.

In addition to dealing with the necessities of life and the long term saving for spending there also needs to be something which handles our personal month to month wants. This quite often is hidden with the necessity expenses. By liberating these expenses, adding a bit extra, and putting some privacy rules in place we are given a small element of independence to blossom with and can also avoid the terrible financial sabotage that happens when a big ticket item is purchased on credit or with valuable savings with the excuse of "we deserve it" or "its an investment". Over spending is due to our over valuation of current selves over our future selves and lack of basic financial knowledge. The discussing of your budget each month is the essence of what turns a budget into a monthly forecast that takes into account all and allows for the planning of your finances.

Lastly there is the element of building wealth for security, a lifestyle change or for future very large expenses like children's education, paying off your home or retirement. The essence of which is putting savings into the right assets and catapulting your passive income growth by building an ATM or money machine which hugely shortens the time line.

To our health, living more of our purpose and in love.

Jonathan

If you are working toward quitting your job "Taking Action, Making It Happen"is here to quickly help you achive your goal.

Hugely increase your success by focusing on what you have the most skill in!

For any one of us to succeed we must have a burning desire to achieve a goal, then absolute faith in ourselves and our ability to make it happen.

It’s through creating an action plan then taking massive action and persistence and persistence and persistence with supporting factors like a mastermind, a team, tax planning to maximise income, ... and a good few more things that success happens.  We teach this in our “Making it Happen Alliances”.

Join us at our Taking Action, Making It Happen meetings where you find encouragement to become financially free.

Our burning desire and absolute faith and all these things are the foundations for the business and each of us are coming from a different place so the sequence of events is important to be effective for that person. 

The what (business) you are doing and your skills in that business determines how much effort is needed to fulfil to provide the service or product through the business in addition to the marketing and sales requirements.

The learning to create income through a business is a massive task and if you are going to add extra effort in needing to also learn and develop a passion or dream or love you are literally halving the chance of success because you are doubling the effort to get up and running.

I teach that for your first business don’t focus on your love or passion or dream in life, focus on what you have the most skill in and create a business around that first.  The success of your first business will give you valuable knowledge on how to make money from something (you would have experience in learning to earn) and can be transferred into the second or third business which might be your love or passion or dream in life and you would be so much more successful in it also!

Take action, take control and measure your success!

Jonathan