Launching Leaders Lesson 6: "financial Fitness" - private video notes

Launching Leaders Lesson 6: "financial Fitness" - private video notes

Jim Ritchie - launching Leaders Co- Founder

You will surely remember a few weeks ago when I was boasting about how I retired at the age of 35 with 26 different businesses or partnership interest. It was true even though some of those businesses entities were less than Microsoft  quality. They did exist, and they were still selling widgets at the time I retired. Most of my friends and even a few of my foes asked how I accomplished this. How in 11 short years starting from scratch I found enough opportunities to create the future that I now have. My answer is usually 3-fold

1. The 6-step success formula
2. A terrific marriage partner
3. Principles from "The Richest  Man in Babylon"

I'm hoping that by now you've seen the vision of this formula. It outlines the opportunities that all of us have to begin with and end with a life of service where all real happiness thrives. I don't have time to share much about my marriage but it has played an enormous part in our family in business history.  My wife Carolyn had very little to do with our business pursuits but she had everything to do with creating a home with a family life that allowed me time to pursue our financial independence at such an early age. Clayson's short but powerful book "The Richest Man in Babylon" sets the stage for the formula of success. Without applying Clayson's dividable principles all of the hard work in getting up early would have never allowed us to retire financially independent at the ripe old age of 35. Thankfully, we were introduced to Arcad of ancient Babylon and by being quick to observe we set some exciting goals, practiced religiously the principles he taught and reaped the harvest early in life from living by those principles. I will share only 2 of his now famous ideas and then show you a financial plan that will dramatically impact your financial future.

Two key principles from "the Richest Man in Babylon"

1. Pay yourself first

• Invest a part of every paycheck into an investment account (adjust the percentage amount every year or every time your industry is impacted.

2. Part of what you earn is yours to keep

• Never touch the principle, do not take it from your investment portfolio

Before you check out and turn me off give me a few minutes, and I think you will see the magic behind such an interesting requirement. If you follow the logic outlined in the Ministry of Business you will see how nearly anyone can become financially independent. Not necessarily rich, but will have sufficient income for the needs for the rest of their lives. The reason why nearly everyone fails to make this happen is that they cheat. And if you're prone to cheat than you'll need to check out of this class and realize that you'll probably living mediocre for the rest of your mortal life. But if you're willing to pay the price for a few years and set meaningful goals for what you want you will discover the secret for accomplishing the worldly ambition of financial independence at any age. This chart is detailed in the "Ministry of Business"

1. Independence account  - you need to put a predetermined amount from your income into a separate savings account .
2. Budget account - this account allows you to manage your well designed and meager budget with frugality. The more you frugal you are with this account the larger amount that can be sent to your independence account or wish list.

• Tithes and offerings
• Domestic Expenses
• Living expenses
• Family expenses
• Normal cost of living

• Note - never use a credit card - Pay off monthly or do not use

3. A non-budget savings account - this account is budgeted for Christmas, birthdays, medical emergencies, vacations, vehicles exedra.

By budgeting for these items over time it allows us to pay in cash for certain emergencies without robbing our budget account, going into credit card debt, or heaven forbid barrowing from your independence account. 

4. Wish list savings account - most of us, if you're like me, like to dream about a bucket list of things we'd like to do or acquire when our ship comes in.  Usually our ship doesn't come in unless we build a ship one yen at a time.

• Boat
• Trailer
• Cruise

Are all possible but only if we have saved for such expenses

5. (probably the most important) Gold account

Our gold account is the repository of all our investments, appreciating assets, Business entities, and even our gambling adventures.

Here's how it works:

• The money we pay ourselves first goes into our independence account until we have sufficient funds to invest into something. -stocks - land title - bond - this is anything that will become appreciating asset capable of generating profits, dividends, interest, or appreciation. When they do appreciate or generate a cash reward that profit or dividend goes into our independence account, which then starts accumulating cash at a faster rate allowing you to buy stock, bond, or land title. And ensuring the cycle at a quicker rate. This cycle continues until the dividends, profits, interest, or capital gain kicks off sufficient cash that if it was put into the budget account and the 2 savings accounts it would sustain your life style. You will note that you still do not ever touch the principle in the gold account. It remains the corptus to generate more cash flow. Profits, and dividend to sustain your families need. Once you've reached a predetermined goal and your needs are met on a perpetual basis without further investments you are by definition financial independent. A quest that is desired by nearly all but achieved by only a handful of people. I promise it works. I did it. Retired in 1978 and spend nearly the rest of my life in full time shirts and community service. Not only me, but everyone who has made the decision to follow both the formula of success and The Richest Man in Babylon has also been able to retire young and spend the rest of their lives doing service. Remember my friends the formula begins tomorrow morning at 5:30 and there ain't no free lunch. In fact, I would even add that I believe in our responsibility to learn these lessons so that we might provide better for our family and our future. Happy Trails.