One of the first keys to increasing personal wealth is to decrease your sophistication, meaning that you “dumb down” your investment plan until you get some momentum going.
The feeling that we need some sophisticated investment plan for increasing our personal wealth comes from the idea that our level of intelligence determines our level of success. Just think, how many people do you know who are VERY intelligent and even well educated but who are broke, out of shape and who have bad relationships?
Could it be that sophisticated intelligence is only a sliver of a factor when it comes to our success? The answer is that the most effective plans for achieving financial freedom are also the simplest, and that’s why the four bucket financial system works so well. Let’s look at how…
Increasing Personal Wealth by Starting Small and Simple
What if instead of working on some complicated plan for increasing personal wealth or achieving financial freedom you just start simple? Say that you divided ALL your income and spending into four categories: expenses, giving, investing, cash reserves. That’s it, nothing complicated or sophisticated; just divide your spending into four “buckets” using the four bucket financial system.
Next, you order your spending buckets according to what’s important to you. For example, if your primary goal is to pay your expenses (in other words, work just to survive) then put expenses first. However, if you have a goal (such as retirement) that you want to work towards and you want to make that a priority, you put investing first and then your expenses.
You see, the point is that you start prioritizing your spending. Once you do this, you gain more control and gaining control over your finances is the first key to increasing personal wealth or achieving financial freedom.
As you do this, you have a small and simple investment that you put your investment money into and you focus on building the habit of making investment a priority before you start getting into fancy investing schemes.
The more you do this, the more momentum you’ll build and the more you’ll realize that you don’t need a complicated investment plan to achieve financial freedom and success. All you need is a good set of habits which compel you towards a desired goal.
So What’s the First Step?
The first step to increasing personal wealth or achieving financial freedom is to write down your four buckets in the order of your priority. Be honest with yourself and be ready to back this order of priority up with your ACTIONS.
The more you do this, the more you’ll realize that increasing personal wealth or achieving financial freedom doesn’t have to be complicated, as long as you commit to it with discipline and perseverance.