What the media, finance experts and most books don’t tell you

Angkor WatThis blog is not based on new theories, new ideas or new philosophies; it‘s simply a collection of experiences, insights and discoveries on a journey to financial independence over the last twenty years. As such the blog hasn’t just happened it’s evolved.

On the journey to financial independence we've read a lot of financial books and information. Most of such assumes financial success determines our quality of life and experiences. While on the surface this sounds logical, real life experience has taught us otherwise.

For example our decision to either save, borrow, buy, invest or sell is not in fact to make more money; but to experience an emotionally inspired feeling and certainty of security, freedom, choice, independence, deeper relationships, increased stature and happiness. All which directly enhance our quality of life.

Early into this journey of  financial independence I (Peter) found myself quickly out of my depth and questioning my own abilities be them emotionally, financially and my courage to commit.

My goal of financial independence was to fund a $50,000 yearly lifestyle, consisting of six months world travel each year, skiing, surfing and some part time work I might pick up along the way. Funding this lifestyle I calculated would require $1,000,000 in investments and I was starting with $0.

Based on what books and financial experts advocated, my goal financial independence would require a commitment to save $250 per week (equal to 60% of all my income), a 10% pa reinvested return and the next twenty two years of my life.

Looking back, while daunting, my plan was simple. Save $250 each week, every week, full stop. So just like becoming better at any sport to improve, i.e. a better swimmer the best way is to simply get in the pool and swim every day.

Most of the books and the financial expert’s advice stop there and forget to reveal the intangible benefits.

When we make a commitment and stick to it even though our bigger goal might have not been realised yet, we actually start to experience the benefits from already achieving our goal. This is particularly evident when making financial choices and commitments.

For example saving 60% of my income was hard; no extremely hard at first, however my savings commitment also taught me to value more the things I owned and take better care of them. It also challenged my creativity to choose low cost high value activities and experiences. At the same time my life became less complicated. I discovered endless new, free, low cost and interesting activities like restoring antique furniture, visiting museums, libraries and nature walks. I read more, had more interesting conversations all contributing to richer experiences, personal growth and enhanced quality of life.

So simply by committing to a savings plan all of the benefits I initially thought I would have to go without, began to show up daily in my life and doing so this reinforced my commitment to stay the course. A self-fulfilling prophecy one may conclude.

Here’s a question “What defines a millionaire? Is it only a person who has more than a million dollars in their bank account? Or could someone with a realistic plan, proven projections, time frame and commitment to amass a million dollars be also considered a millionaire, because they are doing all the activities expected of a millionaire?”

Financial independence is a significant milestone for anyone to achieve and biasedly I believe a worthy crusade.  If you do choose to embark on such a journey I wish you the very best and can guarantee your life will be enriched in unexpected ways and deliver you countless ah-ha moments along the way.

If you are stuck in a funk or you’re lost in a cloud of complexity feel free to contact me. Most often in life we just need someone to talk things through and to lighten our load a little. The following article may also be of help.

Are you in the way of your own success?

Financial independence made simple

From little tings big things grow

The story of 4 horses

Live your ideal life without financial concern

About Peter Horsfield

Peter Horsfield in an Authorised Representative and Investsure Holdings Pty Ltd ABN 16 050 286 630 as trustee for Horsfield Family Trust ABN 55 609 068 513 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523.

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How much is your job costing you?

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The purpose of my blog posts is threefold. To hold myself accountable and help others achieve their own financial independence sooner; and to revolutionise our relationship with money, so we may experience a greater quality of life.

Both from personal and profession experience, I’ve learnt and seen on a daily basis, at its core, what we spend our money on, is a direct reflection of what we value most.  

For example when my self-esteem is high I start booking “experience” holidays, because new experiences and holidays are important to me.

When my self-esteem is low my natural inclination is to buy and eat junk food. Why? Because important to me at that time are my feelings of comfort, rebellion and unworthiness.

However it’s also important to understand the connection between our money and our job.

Your job probably means many diffident things to you; however the core purpose of our job is basically to earn enough money so we can do the things we most value and are important to us.

What’s important to you is like opening Pandora’s Box, however in short the academic community has concluded that happiness is attainable though a continuous combination of friendships, freedom, health, financial security, privacy, a life philosophy and a purpose.

“Your Money or Your Life” is a book written by Vicki Robin, Joe Dominguez & Monique Tilford. It has many fantastic insights and prespectives about financial independence being within most peoples reach if they choose and ask the reader many questions; however one particuar question is of profound importance “How much are you trading your life energy for?

Let’s use the following as an example of what a job costs us (based on a $25 hourly income)?

Activity

Time/ week

Cost $25/hr

Work

37.5

+$937.00

Tax 25%

 

-$234.00

Preparation for work

2.5hrs

-$62.50

Commute

10hrs

-$250.00

Meals/Drinks

2.5hrs

-$62.50

Unwinding (stressed out)

10hrs

-$250.00

Escape Entertainment

4hrs

-$100.00

Attire

0.5hrs

-$12.50

Total Cost

29hrs

-$971.50

 

In this example not only is this cost of the persons job 66.5hrs a week of their non-renewable resource A.K.A. time, they are also spending more than they earn. Sound familiar?

So while everyone is different, my point is there are a multitude of indirect costs and ways we may or may not be consciously factoring into the cost we pay for our jobs. These costs are in addition to the impact our jobs may be having on our health, relationships, and happiness.

The important take out from this exercise is to ask ourselves “Is there a better way? And if so what are the activities we can do right now that will start to improve our life in a positive way?”

For myself this required what others may call a radical shift . I expanded my business and relocated from Sydney to Cairns the doorstep of the Great Barrier Reef and Daintree Rainforest. Doing so has saved me $50,000 less per year in my "job", as a result my income increased and I have more time to exercise, entertain, grow and help others. The very things that are important to me and my happiness.

If you are stuck in a funk or you’re lost in a cloud of complexity feel free to contact me. Most often in life we just need someone to talk things through and to lighten our load a little. The following articles may also be of help.

7 ways to be instantly free and start living your dreams (ideal life) now!

Be Debt Free ASAP

From Little Things Big Things Grow

If Not Now? Then When?

Free at Last!

 

About Peter Horsfield

Peter Horsfield in an Authorised Representative and Investsure Holdings Pty Ltd ABN 16 050 286 630 as trustee for Horsfield Family Trust ABN 55 609 068 513 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523.

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Are You In the Way of Your Own Success?

EffortIn a recent google search I discovered that at best only “4% of the population will ever be financially independent”.

Anyone who’s ever started a savings plan knows that this figure is accurate, as the temptation to spend your money now far outweighs the sacrifice of saving and having more in the future.

Maybe you haven’t discovered how much money our money can make by reinvesting our earnings; especially when working with a trusted adviser to help decide what steps and actions to take and which ones will be the most effective.

Maybe you are saving because we’re told too not realising the benefits from investing aligned to what’s truly important to you; or you’re still trying to figure it all out on our own.

Whatever the reasons are, here are some sure signs that achieving financially independence will be a struggle for you.

1. You’re a scaredy cat!

If you don’t trust anyone, worse still you don’t even trust yourself, you may want to stop saving now and start seeking other ways to find happiness. You’ve probably lost money in the past and are now stuck in a state of paranoid purgatory. You also probably don’t know what to do next and the fear of doing anything terrifies you.

You’re very uncomfortable dealing with professionals, family members or friends, believing they’re only nice to you because they want to take your money.

2. You’re a nice person but you're hopeless.

If you love to plan but you rarely follow through, as sure as night follows day your high levels of enthusiasm will quickly go M.I.A. and your desire for instant gratification replace it.

If only you could save and invest like you rationalise “You only live once! You can’t take it with you! and Money can’t buy you happiness!” you would be very rich.

You might act cavalier about your finances because of an expected inheritance however rarely will you get your financial house in order or ever understand how important having it in order is.  

3. You’re an egotistical, know it all.

If you have a low opinion of qualified professionals with no qualms of taking advantage of them and you believe that doing everything all yourself and buying everything at the cheapest cost is smart strategy for life; then you will never experience the invigorating freedom that comes from being financial independent.

Also by continually comparing yourself to others rather than building relationships will keep you on a treadmill of unfulfilment, the road to loneliness, declining health and burnout, whilst at the same time you make other lives around you miserable.

4. Money is more important than anything to you.

If you keep the financial news channel broadcasting on your TV as a pacifier to help you sleep, you have a FOMO (Fear of Missing Out) problem.

If you’re miserable sitting at your desk and fantasising about an ideal life which you actually can afford but you’re too afraid to try because you like making money more than spending it, or your putting your purist for wealth and luxuries ahead of your health, relationships and life experiences when you already have enough money, you are short changing your own life and those important to you. 

5. Money isn’t important at all to you. 

You might believe money is the root of all evil, but it’s also the root of financial independence. If saying sayonara to the boss with the confidence you have enough money behind you to follow your dreams isn’t a motivation for you, then you’re going to struggle staying on track to become financial independent.

Those who want to be financially independent don’t feel embarrassed to do the hard yards so they can live the life they are fighting for.

When you are truly financially independent you naturally evolve to become your more authentic self, whilst being in a privileged position of opportunity to improve others’ lives. 

6. You don’t have a sense of urgency.

If not now, then when?

The biggest obstacle to becoming financially independent is ones inability to save enough.

Delaying your regular savings not only makes financial independence harder, it can also cut into your quality of life later on as you seek to save a higher amount in order to your achieve financial independence.

If you’re not saving already you should be, if you are saving you should be trying to save more at least until you’re financially independent. If you are saving as much as you can then well done and keep going on your path to financial independence.

7. You’re a control freak.

If you believe you can maintain you’re A-Game with your career, family, health, relationships, personal growth, money experiences and downtime all at once you’re either a freak of nature or your in serious self denial.

The reality is those who experience the highest quality of life invest in activities that most directly benefits them and delegate everything else.

You may have issues with trust however in order to achieve true financial independence you also need to trust that markets, economies, laws and many more factors are outside of your control.

Let go of what you can’t control, outsourcing important areas to trusted specialists, investing your time and energy in the activities you directly benefit from can only but improve your quality of life and help achieve financial independence sooner.

8. Failure and frustration gets you down.

If the pain of saving is more than the pleasure of spending you won’t last long on your path to achieving financial independence.

Most of those who have gone on to become financially independent will tell you the challenges, setbacks and financial struggles they have had on the way to achieving financial independence.

A constant characteristic of those who are financially independent is their ability to say no, be patient and delay their desire for instant gratification. They will tell you that staying strong or getting back up after their setback experience was both character building and a reaffirmation of their “why”, being more important than their emotions at the time.

 

This post was written by Peter Horsfield, as such they are his personal views. Peter helps you to focus on what’s most important, the right strategies at the right time. To learn more about How to become Financially Independent visit Peter Horsfield Smart Advice

 

Peter Horsfield in an Authorised Representative and Investsure Holdings Pty Ltd ABN 16 050 286 630 as trustee for Horsfield Family Trust ABN 55 609 068 513 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523.

 

 

 

 

 

 

 

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Financial Independence Made Simple

IMG 0148 1Twenty years, ten months and twenty seven days ago I looked up into a star filled night sky and I was overcome by feelings of regret, fear, loss and embarrassment.

Eight years earlier I had graduated from one of the most prestigious and expensive schools in Australia “The Kings School”, won a National Swimming Title and was the “golden child” in the eyes of my family and friends. Aside from average academic ability had a choice of any career I wanted.

However by my twenty fifth birthday I’d dropped out... no failed university; burnt countless relationships, partied way to hard, had more casual jobs than I could remember and was living week to week, often borrowing from family and friends till my next pay.

I didn’t like where I was, what I had become and what the future would hold if I was to continue down the same path I was on. I also remember thinking massive change only comes from massive action.

I won’t bore you with the emotional details however on my twenty fifth birthday I decided to commit to a savings plan of $100 per month. I soon calculated that this would never be enough to be rich “financially free”. So I reassessed and upped my savings to my maximum possible commitment of $250 per week, which was about 60% of my income.

I also defined how much investment income I wanted to be “financially free”, back in 1996 this was $50,000 per year. In my projections I also estimated how much this would require in investments and long this would take. Using a 10% total return and then a 5% income I estimated needed $1,000,000 of investments, and this would require a commitment of twenty two years to achieve my “financial independence”.

At first saving 60% of all my income was horrible. I had to change my priorities and attitude. In hindsight my drive probably came from my desire to punish myself for my earlier failings, prove to myself I wasn't a failure and to feel some sense of worth when I was around others.

After three month's my motivation was less emotional. I'd learnt no trained myself to do more with less and at the same time started to relish this new commitment, in a similar way I had previously when training in the pool for my swimming. I also realised the only control I had was my savings amount and my regularity i.e. my goal will be achieved as long as I simply do the work.

With greater confidence came higher goals and I decided to set myself a stretch goal of $15,000, saved by the end of twelve months and the reward being any money saved above this I could spend however I wanted and with this as my reward I took on extra shifts and threw myself into learning more about investments and finances.

More than making a commitment, I found that it’s the doing that moves you forward. This "doing" gave me focus again in life and self confidence that had had gone M.I.A. between finishing school and my twenty fifth birthday. It also opened doors of opportunity for me, transitioning from casual bar worker, to bank teller, financial adviser to establishing my own boutique financial planning business, where I now have the privilege to help others also become financially independent for themselves too.

The following are some insights I have discovered on my journey to be “financially independent”

  1. Let go of the past.
  2. Set stretch goals. Max 10% above your commitment.
  3. Reward yourself along the way after achieving a personal best milestone.
  4. More than a goal make it your legacy.
  5. Know how much enough for you is.
  6. Living on less enriches your life proportionally.
  7. Investing in yourself increases your value.
  8. Monetise your passion.
  9. Let go of what you can’t control i.e. media, politics, markets and do that which is within your control.
  10. Add value to others.

If you are stuck in a funk or you’re lost in a cloud of complexity feel free to contact me. Most often in life we just need someone to talk things through and to lighten our load a little. The following articles may also be of help.

7 Ways to be Instantly Free and Start Living Your Dreams (ideal life) Now!

From Little Things Big Things Grow

The Story of Four Horses: Excellent Ones. Good Ones. Poor Ones and Bad Ones

What's Important To You?

 

About Peter Horsfield

 

Peter Horsfield in an Authorised Representative and Investsure Holdings Pty Ltd ABN 16 050 286 630 as trustee for Horsfield Family Trust ABN 55 609 068 513 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523.

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