Three Steps To Achieve Clarity On Your Wealth Journey | First Principles Thinking Part 2

by | Jan 12, 2024 | Blog, Level 1: Wealth Principles

What is the greatest obstacle standing in the way of your success as an investor?

If your answer is related to the instability of the economy or the rising cost of debt, you are wrong.‍

In part two of this four-part series about achieving clarity on your wealth journey, George Antone uncovers what is most likely to be holding you back as an investor.

What is holding you back as an investor?

When you first embark on your journey as an investor, it’s easy to become overwhelmed. Hundreds of technical terms, complex concepts, theories, and approaches exist, and it can be challenging to know where to start.

Starting your wealth journey can feel intimidating. But what if you could cut through all the complexity and find a simple, relatable way to plan your financial future with less risk and more certainty?

The key to cutting through the complexity is to adopt a mental model that allows you to take a complex concept and turn it into something relatable. A mental model is a framework that helps you to organize information, make sense of your experiences, and predict outcomes based on your knowledge of how things work.

If you throw a ball into the air, you anticipate it falling back toward you. You can predict how the ball will behave because you have experienced this many times in your life. You understand why the ball falls back towards you because you have learned about gravity. You can apply the mental model of gravity to predict how the ball will behave.‍

Applying a relatable mental model to your wealth journey is the starting point to achieving clarity about your finances.

Embarking on your financial journey

In this example, we are going to apply the mental model of taking a vacation. You have likely taken a few vacations in your life. You know what needs to be done before, during, and after a vacation to make it a positive experience. Let’s apply these same principles to your wealth journey.‍

If you think about it, there are three basic steps you need to take to ensure a successful vacation. These are the same three steps you need to take to ensure a successful wealth journey.

We are going to explore each of these steps in turn.

STEP 1: Choose your destination

It might seem overly obvious, but the first thing you need to decide is where you will be going on your vacation. Knowing your destination will determine all the other decisions that you will make about your trip.

It might surprise you that, while you are working very hard to build your wealth, you might not have set a clear goal (or destination). Without a clear goal in mind, your wealth journey is simply wandering around randomly without any clear idea of what you are trying to achieve.

How do you determine the end goal of your wealth journey?

First, you need to decide on the kind of lifestyle you want to live. You then need to calculate exactly how much passive income you need to generate every month to fund that lifestyle.‍

Don’t forget to take inflation into account when setting your goal. If you need $10,000 in passive income to fund your lifestyle today, you will need $14,000 to maintain that lifestyle in 5 years’ time, assuming a constant inflation rate of 7% per year.

STEP 2: Develop your roadmap

Once you know where you are going, you can start strategizing about your trip.

First, you will need to decide how you will be traveling. Will you take a road trip, fly, or take a train? You will need to ensure that the mode of transportation you choose is a viable way to reach your destination. If you decide to go from California to Hawaii by road, you are destined to fail.

You also need to adjust your mode of transportation throughout your trip. You might need to book a shuttle to the airport, board an airplane, take a train from the airport into the city, and then take a cab to reach your hotel.

As an investor, you need to choose the right strategies to achieve your passive income goal. If you choose a strategy that is not customized to reach your goal, you are destined to fail. You also need to change strategies as you move through the stages of your journey.‍

This is the most critical step in your wealth journey. And it’s also where most investors fail.

As a company, we specialize in teaching our members how to identify and implement the right strategies at the right time and in the correct sequence to achieve their financial goals faster, safer, and with more certainty.

STEP 3: Follow your path

You know where you are going on vacation, and you know how you are going to get there and back again. But what happens if you take a day trip at the same time you are booked to board your flight home? Anybody who has missed a flight because they failed to plan effectively will tell you it’s an expensive and time-consuming mistake.‍

The same is true for your wealth journey. Once you have a clear passive income goal in mind, and the strategies you need to achieve that goal, it’s essential that you stay the course and follow your plan.

Many investors fail to meet their passive income goals because they bounce from one strategy to another without following a clear path. Another common mistake is to follow one strategy without question, ignoring the fact that you are not on course to achieve your goals.

The best way to ensure that you follow your plan is to have an accountability partner. Somebody who is well ahead of you on the wealth journey to guide you, keep you motivated, and help you stay focused despite all the possible distractions.‍

The accountability coaching team at Fynanc specializes in helping members to remain on track throughout their wealth journeys, which is why we enjoy such a high success rate among our community of investors.

Considering constraints

We would all take a lot more vacations if we didn’t have to deal with the constraints of time and money.  You may have a limited number of paid vacation days, or you might have to plan your trip around your children’s schooling. You also will have to decide on a budget to cover all your traveling costs as well as your living expenses while you are away.

These same constraints will determine the decisions you need to make on your wealth journey. If you start early in your career, you might have a lot of time on your hands, but few assets and limited experience. If you start on your wealth journey later in life, you may have accumulated some assets and have more experience, but you will have limited time to achieve your goals. It’s essential that you have clarity on how much money you have to work with, and how much time you have to achieve your passive income goals.

Come on a journey with Fynanc

Taking a vacation with your loved ones can be a life-changing experience. However, vacations come and go. On the other hand, your wealth journey is the most important venture you will ever undertake. How you perform will determine your future and the future of generations that come after you.

You would never leave for a vacation without knowing your destination, planning your roadmap, and following your path. Why, then, would you undertake your wealth journey without a plan in mind?

Make sure to watch Part 1 of the First Principles series by George Antone.

If you are ready to set out on your wealth journey and achieve your goals faster, safer, and with more certainty, join us for our upcoming workshop:

Fynanc Team

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