MY 3 SELF-IMPROVEMENT HABITS FOR HAPPINESS, FREEDOM, AND TRUE WEALTH.
(PART 2) Don’t all Millennials (and humans, really) just care about the freedom and wealth to do what they want?
To win the freedom, happiness, and true wealth game, you should view this as a sport where you create a high performance process for yourself. Most people think high performers are born extraordinary, but that’s hogwash. They grow through practice and persistence of mastering certain habits.
Even the tiniest of habits add up to huge results over time.
Maybe I’m full of hogwash, but I don’t care, because I write and live off my meager Medium.com salary of $3.56 per week because of my ability to out-perform in other areas of my financial life. And my best guess is you are probably reading this because you want to be rich, happier, or have more success and meaningful freedom in your life (something I also write about in part 1).
High performers are process oriented. CEOs and professional athletes have won this game, but I want to take it a step further…
because being rich (even having freedom) is bullshit if you don’t have an end goal of finding daily happiness, passion, purpose, and fulfilling work in your life.
I want daily habits and purpose, fam.
I want freedom and growth, daily interactions and relationships with people that increase my happiness (and laughter).
I want to live my #BestLife and go YOLO (this isn’t true, I don’t really want to go YOLO) for the rest of my days, which takes self-improvement and building successful habits. To do that, I have to build and trust the process, but first, I have to learn what my lifestyle should actually be.
See, I don’t care about being a millionaire, or my elite status, or being among the world’s richest people. As a former pro athlete, there is nothing that makes me happier than seeing people reach their goals and do what they want with their life. Accountability with your fitness, your job, your dreams, your goals, and having a more motivated self creates a better team.
Understanding the how to build a process for yourself takes understanding happiness math, self-awareness, and delaying gratification (and having motivation) to win the saving and investing game.
HABIT #3: TRUE WEALTH STARTS WITH CHANGING THE TINIEST OF YOUR PROCESS
Americans love to buy shit they don’t need.
We love to get things and hold onto them, then buy new things to replace the old things and then when we get the new things, we still hold onto the old things because of the memories we have with them. My father has the habit of holding onto uneaten chicken noodle soup (yes, he keeps it in the freezer like there’s a zombie apocalypse coming), but it is because he values money and using what he buys.
But there is a balance here; to build habits of using what we buy and letting go of what we don’t need to use.
This comes down to understanding simple happiness math.
True wealth is always inversely related to the expenses of your lifestyle, which means true wealth is having more of what you value most related to how much time and freedom you have available to you to do it.
If you have to work twelve hours a day to pay off the house, the car, the cabin, the stuff, the eating out, then your true wealth ratio sucks. If you buy booze, drugs, fancy clothes, things, and can’t prioritize your savings over your dopamine addictions, you will not create a process that wins over the long haul.
You aren’t a high performer if you make a shit ton of money and spend a shit ton of money too.
Let’s say the average human needs 7–9 hours of sleep, which leaves 15–17 hours to be divvied up for freedom, learning, investing, sports, fitness, family time, hobbies, and work (or whatever else).
How much freedom do you want/need to live happier, more fulfilling, more purposeful, growth-oriented, and passionate lives?
Here is my shitty attempt at happiness math:
Freedom : Work = True Wealth Ratio
Hours of Freedom / Hours of Fulfilling Work = True Wealth (as you can see my strength isn’t math)
WORK: 7–9 HOURS
SLEEP: 7–9 HOURS
FREEDOM: 6–10 HOURS
This freedom then is broken into subsections, which could mean taking care of the family, playing catch with the kids, driving the kids to a place or thing, getting fit, hanging out with friends, doing house work, starting a new hobby, going out to dinner, shopping online, watching rom coms, hell, whatever.
But how much of that time do you spend trying to figure out how to create more freedom through investing, saving money, and learning how to build a better process for creating wealth?
Which leads to Self-Improvement Habit #4!
HABIT #4: LEARN HOW TO INVEST SMARTER TO CREATE MORE FREEDOM
The key to a high performance in building freedom and true financial success is creating a better process of learning, saving, and investing in things that pay you back while you sleep.
What does invest mean?
From the Medieval Latin word investire, from Latin, to clothe, Merriam-Webster defines it as:
a : to array in the symbols of office or honor
b : to furnish with power or authority
c : to grant someone control or authority over
So who are you granting authority over your freedom, your savings, and your time to learn about how to create a better true wealth ratio for yourself? How much passive money coming in a month do you need to cover your expenses? Where are your biggest expenses and where are your most consistent small expenditures you can change to start saving more?
Your freedom decreases as you start families, buy things, and monthly expenses grow. There is more to take care of and less time to do the things they truly value, which makes understanding the true wealth process even more important.
Do many of the income rich workers that live conventionally also have the least amount of time to enjoy their freedom?
Having a high income is different than true wealth because these types of people live by a process that allow their expensive things to own them.
I’m not interested in being income rich, in having a tons of money invested into a 401k, having expensive things, and elite status among my peers.
I’m interested in how much passive income I get each month from my investments that allow me to do what I love; travel, be with friends, sail, write, teach, do startups, coach kids, and stay fit.
My internal values of wanting to win the freedom, happiness, and true wealth game (at all costs) creates my high performance process.
I’d rather eat ramen (or dirt) and do what I love, while saving money and investing in passive income streams (new businesses, peer to peer lending sites, new tech platforms), or investments like real estate (flips and rentals) that make me truly wealthy and pay me back while I sleep.
But there is a simple rule of thumb I like to put into my investment process:
Be the lender, not the debt taker.
If you take on debt, make sure whatever you buy with that debt pays you back in some other way that gives you meaning, freedom, time, and more daily happiness.
If not, let go of your attachment to things and start a new process of enjoying time or freedom with friends over things.
People go into debt to buy fancy things, houses, cars, jewelry, jeans, and stuff to help pay back those lending them money at astronomical rates. Credit card companies and banks get 15–25% return on their money for unpaid balances?
That is ridiculous.
Before you take or don’t take any of my advice, please know I’m not a financial advisor and I use most of these ideas myself, some I do well, some not so well. So take your own risk, and learn from it.
Here are some fun options to be the lender and help people not pay 25%. I would stay in the upper echelon of credit scores and people you lend to at Lending Club, Prosper , or Upstart (my least favorite).
I’ve tried PeerStreet.com and Fundrise.com. I have my own opinions on these, some are much better than others, but the basic premise you are lending money to people at much more respectable rates than a credit card shark.
I aim for 7%-8% return on those peer to peer lending sites or real estate lending platforms.
If you don’t like those, try dividend ETF’s, hybrid dividend equity/bond funds that consistently pay back a monthly dividend. Look for something that pays you every month and you can start to see your monthly passive income grow.
HABIT #5: PLAY THE DELAYED GRATIFICATION GAME
Jillian and Adam Johnsrud became millionaires in 2015, thanks to understanding principles of the Standford marshmallow psychology experiment; a test given to kids that basically shows which kids will be successful and more fulfilled in life based on their decision of taking one marshmallow now, or waiting for two 15 minutes later.
The people that can play the delay gratification game win the investing war.
The couple never earned more than 80k, lived with roommates, and did real estate investment on the side, saving their money and investing it all back into more properties until their monthly income sustained their expenses.
Do you know how liberating it feels to have passive income cover your monthly expenses?
Yes, my life sounds like I eat a cardboard boxes and ramen every day.
I would if it meant I could live off passive income. So treat yourself, but do it smartly. In fact, break up big buys into smaller chunks. It feels the same to the human brain. Invest in anything that creates compounding returns, what Albert Einstein calls the 8th Wonder of the World!
Real estate is probably my favorite investment in this form.
You can (and should!) still treat yourself sometimes, but understanding the power of delayed gratification — and compounding returns on your investments — can help you keep your eye on the prize. A good first step is to up your contributions to tax-advantaged retirement accounts, like a 401(k) or IRA, which can help you pay Uncle Sam less today and grow your money.
These are some ways to change your process. I hope you enjoyed learning, please share any other ideas you have about winning the passive income and freedom game!