Remember video game cheat codes? My son got a cheat code book from his cousin a few months back and he’s finding out just how awesome they are.
Take your favorite video game or the hardest video game and the cheat code book gave you power you never thought you could have. Unlimited lives. More firepower. Skipping ahead several levels to defeat the last big boss. Honestly it made winning the game so much easier, and it was awesome!
As I got older, I noticed something about cheat codes – there were more of them then just I knew about video games! Clearly all around me there were all kinds of “cheats” going on. And by cheats I mean people who had figured out how to get the things, act a certain way, and live the life I wanted. Sure whatever it was they were doing was probably a little more complicated than clicking a few buttons on a Nintendo controller. But clearly something was up.
How Does This Impact Your Financial Philosophy?
All around us there are opportunities to improve, advance, and even skip over some of the things that most of us hate to do. Though that can apply to many aspects of your life, one place where it can really maximize your potential is to exercise it when it comes to your own person financial philosophy.
Think about it:
- Is whatever amount of money you make really as much as you want to make?
- Do you really want to have to go to work forever?
- Are your savings (or even future savings) really the best that it could ever be?
Of course not!
All the time people figure out:
- How to make more money – sometimes earning as much as five or even six figures per month. Everyone knows someone who makes more money than themselves.
- How to retire early or live the life of complete and total financial freedom – Really who wants to work 80 hours per week as a slave to their job? What if you could live your life free of monetary obligation while working only half, a quarter, or even 5% of that? (By the way, if you have any doubts that this is even possible, then you really need to read The 4-Hour Workweek.)
- How to grow their wealth to multi-million heights. You’d be amazed at how many regular people like you and I are able reach a seven-figure net worth doing nothing more than sticking to their own personal financial plan.
And how do they do this? They constantly look for the cheat code!
When a brick wall appears in front of them, they look for a way to plow through it. When that doesn’t work, they don’t quit. They look for a way around, over, or underneath. They get creative. They get dirty. But most important – they don’t stop until they’re on the other side.
It was years ago that I decided that achieving financial freedom was a big part of my personal philosophy for success. But I had a problem – all of my life savings was in a 401k and according to the IRS you can’t touch your money until age 59-1/2. Even though I knew this was a law, I also knew that lots of other people out there in this world had figured out a way. And they were successful. The situation might be a riddle, but it was a riddle that could be solved.
So I hit the Internet and start researching as many personal finance websites as possible. I found tons of other cheat codes that would help me hack my way to retirement: Passive income strategies, a 72t, using capital gains and dividends. All the answers I ever needed were out there. I just had to go looking.
The 5 Cheat Codes for Your Finances:
Throughout my life I’ve found multiple cheat codes that have helped me to improve both our family’s finances as well as our quality of life. Here are five of the best ones to share:
1. Believe Financial Freedom is Possible:
Too many of us DON’T believe that financial freedom is true, and that’s a shame.
I can’t tell you how many people I’ve met where they feel like money controls them and that the concept of retirement is basically a fairy tale. That’s a really sad state of mind to put yourself in because it means you’re defeated before you ever even gave it a try.
Look … we can all make excuses. We all tell ourselves that it’s going to be too hard or that money is too complicated.
But if that were true, then why are there so many people out there who actually accomplish financial freedom? They reach retirement and achieve their goals of financial security. These people aren’t lucky or born into money or smarter than you. All they did was put together a plan and made it work. They told themselves it IS possible. And therefore it became true.
I remember the first time I read about people who figured out how to make money without actually working or being involved with the process. It was like a light came on. I couldn’t believe how simple some of their strategies were, and I wanted to start doing the same sort of things for myself immediately!
Now years later after putting in the effort, I’m very fortunate to be earning of over five figures per year of passive income IN ADDITION to working my regular job. And its all happening without hardly any extensive extra work or expense to keep in going month after month.
2. Use Every Advantage You Can:
When it comes to building your fortune, it’s amazing how many different advantages we’re given to become completely independently wealthy that most people never fully appreciate:
- Deferring your taxes and grow your savings tax-free using a 401k and IRA
- Maxing out your 401k and IRA contributions each year
- Getting your full employer 401k match
- Paying a lower tax rate on capital gains and dividends
And then there’s perhaps there’s the great cheat code of all when it comes to getting rich: Time!
Time is BY FAR the best resource we have when it comes to investing because it’s what makes compound interest so powerful. Someone investing $10,000 per year with 10% growth could see their principal grow to:
- $572,749.99 in 20 years
- $1,644,940.23 in 30 years!
- $4,425,925.56 in 40 years!!
The more Time we give ourselves to get started, the better the cheat code works!
As for other advantages you can learn, the best place to start is to study with the masters. There are plenty of good books and great websites full of people who have figured out their own hacks. Some of them have even figured out how to completely replace their jobs with the money they used to earn on the side.
And the best part – the people who figured it out are not unlike you and I. They were just regular folks who recognized that there was more money to be had than what you could find in your paycheck.
3. Buy Assets, Not Things:
I remember reading this financial cheat code years ago in the classic book Rich Dad, Poor Dad. To a young guy in his early 20’s, the concept of “buy assets, not liabilities” (as the author put it) was mind-blowing. Even over a decade later, this philosophy still just makes good sense!
The best way to put money in your pocket is to buy more things that will make you even MORE money. Stocks, rental properties, investing in your own business. These are all things that will put you on the path to wealth and accelerate your savings way beyond that of your peers and your expectations.
Unfortunately, though, despite how simple this cheat code is, it’s harder for some people to do than we think. Why? Because we’re conditioned to do the opposite.
In a 2014 report from CBS News, the average U.S. household credit card balance was $6,802. And you KNOW that $6,802 wasn’t for anything good. It’s probably all for things we don’t need and couldn’t really afford in the first place.
It’s up to you what you decide to spend your money on. If you really want to get the best return, put it towards something that’s going to go to work for you; not you working for it.
4. Your Financial Livelihood is Proportional to Your Ambition:
No one cares about your money like you do. No one!
If you’re waiting for someone to come along, explain how to get rich, hand you a pension, or pull you out of debt, keep dreaming!
Change starts when you want it to. But that first has to start with a spark of ambition. You have to WANT to ask the questions. You have to want to solve the problem. You have to want to try and try again, no matter how many times you fail.
Three and a half years ago I could have opted NOT to start this blog. I could have just continued to fill my free-time watching movies on Netflix, reading other blogs and saying to myself “I could do that” without ever really following through. But thankfully I did. Thankfully I saw the opportunity, started a blog, and found a way to bring in an extra income. And I’m glad that every step of the way I had my ambition to see me through.
5. Remember to Give Back:
This is by far the best cheat code. And not just as part of your financial philosophy, but in life.
Making money does not have to be a zero-sum game. If you know some awesome tricks to maxing out your retirement savings or managing your finances, don’t hold out on your friends … get the word out! Tactfully share that good advice with everyone you know. I think you’ll be pleasantly surprised at how receptive most people are when you’re offering to help them grow their fortunes.
I believe it was Paul McCartney who said it best with the lyric “the love you take is equal to the love you make”. Though you may not feel it at times, life has a funny way of coming back and rewarding you for doing the right thing. Listen and show interest in others. Share your advice with your friends. Not only will they forever remember your selfless acts, but you’ll get the best reward of all – fulfillment.
Readers – What are your cheat codes when it comes to money and life?
Featured Images courtesy of Benjamin White | Flickr and Kevin Dooley | Flickr
[email protected] says
These are great! I honestly believe that having the ability to see there is another way to do things is half the battle. Having the courage to follow your dreams is the next big step!
I completely agree. Once I realized there was this whole other world that only the wealthy and privileged seem to know about, it gave me a better sense of where to start looking and what I was looking for. I stopped thinking that the world was against me and suddenly felt like a door had opened. And I was more than ready to walk through!
Deets LaMoss says
Great advice MMD! I know these have been very pertinent in my own financial freedom journey.
Jayson @ Monster Piggy Bank says
My cheat code is to never lose the big picture that one day I will be happy with financial matter, health, others as well as I will successfully achieve my goals. This is really important because it encourages us to keep on especially when it seems like there’s no way out and everything is against our plan.
That’s an excellent one to have. So many of us get too caught up in the details of our plans that we put up blinders to the other things we have going on. Taking a step back really helps to keep the whole thing aligned and our priorities in perspective.
How to Save Money says
Two words for me – delayed gratification. Save now, spend later!
I agree with you there. That’s one of those financial ideas that is so simple and yet so hard for many people to practice when it really gets down to it.
Rich Uncle EL says
Great cheat codes for a financially sound life. I am also sad that many people feel that way about reaching FI. They see it as a pie in the sky event they will never reach. I’m looking to be the first example in my group of influence, and that will motivate others as well.
I feel the same way. Why does it have to be such an unattainable goal for people? With just a little discipline and +20 years you could have all the money you ever need to be financially independent. It just takes commitment to the idea and a willingness to make it happen.
Jon @ Money Smart Guides says
Believing it is possible it the most important thing, You are right that it is sad how many people think that it is impossible to become wealthy. They are just making excuses because they are afraid of trying and failing.
The way I look at it, is even if you do fail, you will be in a better financial position than had you never tried in the first place. To me, that is reason enough.