Make Today Your Financial Independence Day

This week’s personal finance column at Black Voice News gives steps to become wealthy:

With so many people celebrating our country’s Independence Day, it seems only appropriate that we should take a moment to consider how to create personal, financial independence. There are five simple steps that can help you create, and manage, generational wealth. Remember, it’s not how much you bring in that determines your net worth. How to use your money is what separates the wealthy from the mediocre.

Step 1: Know your net worth
have to know where you stand financially if you want to grow. Take a moment to make a list of all your assets (things that you own) and subtract all your liabilities (debt you owe) to find your net worth. My first book Money Matters: The Get It Done in 1 Minute Workbook ($12) has a really simple worksheet to help you understand where you’re starting from.

Step 2: Create a spending plan
Once you understand what you have (assets), what you owe (liabilities), and what your financial value is you can start to plan where and how you spend your money. Most of us waste more money than we realize on small purchases. We have to find opportunities to make small changes that make a big difference. For example, once you notice that you spend $20 a month on sodas at work (that’s $240 a year) you can choose to bring sodas from home or better yet start drinking water and start investing the money you were wasting.

Step 3: Invest and plan for generational wealth
Now that you’ve found a few places where you can save a few dollars, you’re going to start investing that money for your retirement with the goal of leaving an inheritance for your loved ones. Differences between retirement accounts are explained in my book 10 Things College Students Need to Know About Money ($15). If you’re wondering why planning to leave generational wealth to your loved ones is important, download my free eBook “You Shouldn’t Take It With You”.

Step 4: Talk openly
Realizing that your net worth is negative or that you’re spending way too much money on things that are not helping you build wealth …. Click here to read the full article.

We All Have Agency

A favorite topic of mine is the concept of agency, especially with the working poor. Too many times I’ve spoken with people that get up at the crack of dawn to work a menial job then follow up a full day’s labor with yet another low paying job in the afternoon/evening and they will not agree that there is much they can do to change their lives.

There is an idea that the social, financial, and governmental systems that meter their lives are incapable of being changed, amended, and/or disrupted by people in their position. What?! As the saying goes, “power is never given, it is taken”. I honestly don’t understand why the working poor don’t put up more of a fight to understand, and change, these systems.

The first step is to learn all you can about credit, debt, taxes, investing, etc. You can’t manage or change what you don’t understand.

The second step is to become an advocate for yourself, your family, and your community. For example, make sure that you are paying a fair price for things, make sure that you are shopping around for the best loans for your credit history, ask questions and make sure you get answers before you sign any documents.

Next, vote according to what makes the most sense for you and your family. Don’t become swayed by flashy t.v. commercials or slick talking politicians. The government works for us, the people. The decisions the politicians make effect you in your daily life more than you think.

Lastly, share what you know with anyone that asks. Make sure that you pass on the knowledge and practice of that knowledge to your children and others in your community. There is strength in numbers and power in accumulated knowledge.

Power to the people!