Cracking the Financial Freedom Code: Lessons We Can Learn from Tiger Woods, @iamdiddy and Lebron James

istock_000008974759xsmall

Note: This was written before Tiger plowed into a tree on his way to hit a bucket….

When I opened my first paycheck as a summer intern for a now extinct electronics company, I will never forget saying that if they are paying me this now without a degree, once I receive my degree, I will be living LARGE.  That thought would get me through Calculus II – not once, but twice and many other difficult courses along the way to an Engineering degree.

Five years later, my dream came to fruition as I received a job offer as a design engineer.  Since I had sucked it up and stayed in school for my Master’s degree, a few additional dollars accompanied offer.  Life was good.

About three months into my “dream” gig, I began to learn about the mutual exclusivity of time and money.  My last year in college was great.  I didn’t have much money, but I had free-time galore.  My first class wasn’t until noon.  Every day I was in the gym by 8:00 a.m.  Afterwards, I would have a nice leisurely breakfast then off to class.  By 4:00 p.m., I was shooting hoops or whatever.

Now as a highly paid worker bee I found that I had money, but no time.  The work day started at 8:30 a.m.  If I wanted to go to the gym beforehand – I would have to be there at 6:00 or 6:30 a.m.; that’s wasn’t happening.  I had to cram all of the fun stuff into the weekend and two measly weeks of vacation time.  I guess my dream left out a few details.

Years later, I would learn of this concept called financial freedom – the ability to do what you want when you want without worrying about money.  That’s what my dreams were really about.  I am not sure how I got confused with this job thing.

Not pleased with many of the commonly accepted definitions of Financial Freedom, I redefined it in my own terms: Financial Freedom is freedom to focus on what is truly important to you and your family without having to trade time for a wage. It is enabled by a portfolio of income producing assets, managed by you, which generates sufficient income to cover your yearly expenses on an ongoing basis. It provides both time and money.

In my research, I learned that the pathway to Financial Freedom starts with a dream. Interestingly, most people who venture down this path are simply devoured during this stage. They quickly realize that the chasm between reality and their goal is so large that it is senseless to pursue.  Many then channel their energy into something more socially acceptable like climbing the corporate ladder.  The few who crack the code and make it from Stage I to Stage II – all have one thing in common: they think differently than the most people.

I was recently watching an episode of The Haney Project on the golf channel.  The show is about Tiger Wood’s golf coach, Hank Haney, attempting the near impossible – to fix Charles Barkley’s golf swing.  Words can’t describe Barkley’s swing.  Train wreck comes to mind, but that’s an understatement.

As I often do, I take ordinary situations and think of how it applies to attaining financial freedom.  As Haney was explaining a typically Tiger day, I was floored with its parallels to someone moving out of the dream stage.

Here is a typical Tiger day:

  • 6 a.m. – lift weights for 90 minutes
  • 7:30 a.m. – breakfast
  • 9-11 a.m. – hit balls on practice range
  • 11-11:30 a.m. – putting
  • 11:30 a.m. – 12:30 a.m. – play 9 holes
  • 12:30 -1 p.m. – lunch
  • 1-3 p.m. – hit balls on practice range
  • 3-4 p.m. – work on short game
  • 4-5 p.m. – play 9 holes
  • 5-5:30 p.m. – hit balls on practice range
  • 5:30-6 p.m. – putting

Before Tiger, how many golfers considered golf a sport?  Tiger has taken it to another level by thinking differently than the rest and the rewards have followed.

Many celebrities and athletes have cracked the code.  I recently got sucked into Twitter around the time of the Ashton Kutcher (@aplusk) / CNN battle for a million followers.  I was intrigued that one person could have a voice as large as a media giant.  I immediately signed up to be an Ashton follower – to do my little part in seeing “the man” go down in defeat.

shaq2Like many people new to Twitter, not knowing what to do with it, I decided to follow a few celebrities.  Shaq (@THE_REAL_SHAQ) is always good for a few laughs.  I bet if anyone has a golf swing uglier than Barkley’s – Shaq’s the owner.  I have sent a few barbs his way; seeing if it would invoke a response – no luck.

One of my favorite celebrity Twitters is Diddy (@iamdiddy).   That’s a little strange because I am not into hip-hop and can’t tell you what on his latest album.  However, Diddy, a member of the Forbes Celebrity 100, knows what it takes to get past the dreaming to the making stuff happen stage.  He uses Twitter primarily as a motivation tool and is constantly encouraging people to get locked-in a sort of the modern day version of Napoleon Hill’s burning desire concept ( Forest Whitaker Reminded Me of A Key to Success: A Burning Desire).

Here is what getting locked-in is all about:

Head down, eyes trained on his Nikes, Lebron James stormed off the court in Boston last year. No congratulatory handshakes or good-luck hugs. No words.

“We need to get continue to get better, James said. “If that means some personnel changes that need to happen, then so be it.”

James then set out to change himself.  He took two days off and then was right back at it.  If a championship wasn’t in his cards, he was getting a gold medal in the Beijing Olympics.

Chris Jent, Cleveland Cavaliers assistant coach, remembers a more determined look in James eyes during those workouts.  “He was so locked in.  His concentration was different than anything I had ever seen before.  He was, I don’t know different.”

Tiger, Diddy and Lebron are all in the upper echelon of the upper echelon – top 1%ers in their fields.  Fortunately for us, we only need to get to the upper echelon, top 5%ers, to achieve Financial Freedom.  I often equate achieving financial freedom to getting a sports scholarship to a Division I college.  It is not impossible, but it is not easy either.  In reality, it is probably a little more difficult than attaining the scholarship – because it is not nearly as much fun as dribbling a basketball.

Here are my “5 Not So Easy Steps to Financial Freedom:”

  1. Dream – Why do we spend so much time preparing for when we can do what we want (retirement) instead of doing it now?
  2. Shift – Main Stream Thinking leads to a gold watch for 40 years of service.  Making a mind shift enables you to buy your own watch while fulfilling your dreams.
  3. Learn – Unfortunately there are no short cuts.  Certain knowledge must be acquired.
  4. Act – The fastest way to accomplish a goal is to find someone who has achieved it and do what they do.
  5. Learn Some More – The learning never stops.  Specific knowledge makes freedom possible.

I believe that if you can make the transition to thinking against the grain you are very close to cracking the code and well on your way to achieving financial freedom.

Check me out on the twitter.  I use it mostly to talk about stocks.  You can find me at www.twitter.com/TrendRida

Note:  This article was written before Lebron pulled a nutty and walked off the court without shaking any hands after being spanked in the Eastern Conference Finals.  It will be interesting to see how the story plays out.  Maybe there will be another lesson to learn.  The primary objective of this article is to simply highlight the drive of the athletes mentioned.

Forest Whitaker Reminded Me of a Key to Success: A Burning Desire

istock_000000587470xsmall1We all know many people who “talk the talk” and a few that “walk the walk,” but what is it that the separates these two groups of people.  I have been thinking about this a lot lately.  When I left my job almost a year ago to pursue my dreams as an entrepreneur, trader, financial freedom seeker many of my friends simply didn’t get it.  The ones that had a good idea how much money I was walking away from were the most shocked.

What would possess someone to walk away from a high paying job?  What about the status?  What about the security?  What about? What about? What about? How do the “walkers” suppress the “what abouts” and pursue the trail of “what ifs?”  What if I land this deal? What if this trade takes off?

Napoleon Hill in his classic book “Think and Grow Rich” identified the characteristics of the successful.  The one that stands out the most to me and best captures why I do what I do – is having a burning desire.  A burning desire is an urge, a passion, an inner drive that is so overwhelming that if denied will make you miserable no matter how much money or prestige you may have.  The little known secret is that this desire is so all-encompassing that if embraced success is almost guaranteed.

I was reminded of this listening to Forest Whitaker’s acceptance speech at the Oscars for Best Actor.

When I was a kid, the only way that I saw movies was from the backseat of my family’s car. At the drive-in. And, it wasn’t my reality to think I would be acting in movies, so receiving this honor tonight tells me that it’s possible. It is possible for a kid from east Texas, raised in South Central L.A. in Carson, who believes in his dreams, commits himself to them with his heart, to touch them, and to have them happen.

Because when I first started acting, it was because of my desire to connect to everyone. To that thing inside each of us. That light that I believe exists in all of us. Because acting for me is about believing in that connection and it’s a connection so strong, it’s a connection so deep, that we feel it. And through our combined belief, we can create a new reality.

That thing inside each of us is desire.  We were all born with it, but very few choose to nurture and develop it.  Those who do – can create their new reality!

Financial Freedom: Saying Goodbye to the Time for Money Swap

Before we address the issue at hand, let’s make sure that we are clear on the definition of financial freedom.  Up until 4 or 5 years ago, I had a warped perception of financial freedom.  I pictured it as a life of leisure with a couple million dollars in the bank.  After taking on too many unnecessary risks trying to attain that goal, I stopped to rethink my definition.  I realized that financial freedom doesn’t require millions of dollars. As long as you have enough to cover your yearly expenses and a method to replenish your coffers, you are there. That sounds sort of like a job. However, even using that as a definition only a few working people would meet the criteria. Most need a job and a few credit cards to make ends meet.  I redefined it as follows:

Financial Freedom is freedom to focus on what is truly important to you and your family without having to trade time for a wage. It is enabled by a portfolio of income producing assets, managed by you, which generates sufficient income to cover your yearly expenses on an ongoing basis. It provides both time and money.

That is significantly different than my original definition, but much more achievable. It requires that your days be spent maximizing the return on your eBay business, rental properties or other assets. Unfortunately, it is no life of leisure. However, the intent is to generate your income in far fewer hours than the standard 9 to 5. If structured correctly the revenue will continue to come in while vacationing or on the golf course.

We have prepared our entire lives for the time for money swap.  It is simply what responsible people do. You commit 40, 50 or 60 hours per week and the company commits to pay you for your efforts and in some cases extremely well.  The concept of not exchanging your time for a wage is so far out of the comfort zone for most; financial freedom will never be seriously considered.  Many will dream about it, but life will slap them back into reality.  The few who choose to ignore life’s slap – must be willing to make the following three commitments.

Continue reading “Financial Freedom: Saying Goodbye to the Time for Money Swap”