Updated: May 17
We ended the last article ready to start on the 7 Golden Milestones to Financial Freedom. At its core, this is a checklist, and during my airline pilot days, checklists have often saved the day. My thinking is, why isn’t there a checklist like this for dealing with money? If I had to compare the two, money is much easier than dealing with an airplane because you plug yourself in the system and after the initial setup, it takes care of itself. The adjustments are infrequent and relatively easy. As a First Officer just starting out with the regional airline, I didn’t make much. That didn’t stop me from buying a shiny new Mazda RX-8 sports car with the racing modifications and an extended warranty. Altogether, it cost more than double my annual income when you included loan interest. I must have fallen for the pilot driving the sports car cliché. The monthly payment alone was half of my paycheck. Then there was sales tax, sports car insurance, and racing tires that lasted 6 months, and I found myself flat broke, paying mostly for something that sat in the airport parking lot for 20 days per month. Now I drive a Toyota Tacoma that is nearly 20 years old and love it more than the sports car, even though I could now buy one with cash, but I could only do that because I’ve been driving the old truck for a while now and it’s been giving me an advantage in the Money Games. It’s a paradox. The issue was, back then, I had no checklist or concept of how to apply my earnings. Not anymore – below is the money checklist version of a lifetime of these kinds of lessons. Each one will be featured in future articles in more detail.
1. First Golden Milestone – Start Your Journey
The very first part of the path is the easiest one, because it’s right under your nose, but you have to be the revolutionary of your own life by taking the first step. Like any good traveler, we will need to be light, adaptable, and complete while preparing for your journey. I will discuss how to take a jumble of accounts, passwords, paychecks, bills, student loans, obligations, insurance, taxes, and possessions and restructure them to be faster, transparent, painless, and automatic, so you realistically know where you stand at any given time.
Lao-Tzu's proverb,"The journey of a thousand miles begins with a single step," captures this milestone perfectly.
If you're really up for a running start, start with our very first article here and read them all from beginning to end, just like a book. A link at the bottom of each article will guide you to the next article.
Complete Golden Milestone #1 (Start Your Journey) by becoming a Golden Goose Guide Subscriber (bottom of page) or GGG Forums Member (or both!), which is completely free.
Please let us know you've achieved Golden Milestone #1 in our 'Welcome and Introductions' group in the Forums!
2. Second Golden Milestone – Build Ownership
The best way to stay the course is to begin tracking your scores over time in the Money Games, using financial tools from your banking ecosystem or an app. Think of it like checking the scores for your favorite team. After seeing your score for ownership improving, you will find that you’d like to skip straight ahead to the Sixth Milestone and become debt free. I’ll offer the best ways to skip ahead (see my next article, "Go From Rags to Riches in One Grand Move"), but depending on your situation, it may require some patience while the rest of the milestones take effect. Please don’t be discouraged in this milestone because change starts happening in the very next one!
Complete Golden Milestone #2 (Build Ownership) by opening an investment account, starting a business, or buying real estate. The easiest way by far is opening an investment account. In the US, you can start investing tax-free with a 401(k), Roth IRA, Traditional IRA, or Brokerage Account. In the UK, they offer tax-free ISAs.
Investing allows you to be the business owner. If you own $10,000 in shares, it's like owning a $10,000 business of your own. Have 100K? Now you're the proud owner of a 100K business. The difference is you can choose from hundreds of the most successful businesses in actual shares using a low-cost index mutual fund, not put all of your eggs in one basket.
Please let us know you've achieved Golden Milestone #2 in our 'Welcome and Introductions' group in the Forums!
3. Third Golden Milestone – Save Money
These articles will feature discussions on how to reduce the expense of each of the most expensive recurring items discovered in the Second Golden Milestone: housing, transportation, food, healthcare, etc. Or, in my case, the sports car that I ended up selling. This is like unloading the weights from the backpack you’ve been carrying around.
4. Fourth Golden Milestone – Maximize Your Income
These articles will cover tactics and strategies for most importantly, doing work you enjoy, but also achieving an income that represents the best of your talents, skills, and long-term decisions on education, using a Japanese concept called Ikigai, which means "reason for being". The key is to find the intersection between what you love, are good at, the world needs, and what you can get paid for.
We will find the true value of your time and see how it can be used as a lever to move your income. Time is worth more than money, because it gives you the ability to create things, or learn enough to offer something extremely valuable to the world. Investing at its core is a simple concept. You’re simply taking what you’ve saved and putting it to work in businesses that generates a profit while you kick back and track their progress just like you’ll track yours. After reducing your costs, you should start seeing a surplus that goes directly into your savings and is reinvested when it pays you. This is a cause for celebration, as you’re now creating ownership where there was nothing. You can also invest in yourself through education or skills to unlock the next door of opportunity.
5. Fifth Golden Milestone – Get Financial Security
Most people might think that only the wealthy need protect themselves with hedges. However, this is a key lesson for anyone from a college student to a billionaire. The lesson is: It doesn’t matter how much value you create today, if it’s taken away in big chunks or bit by bit for the rest of your life. That could be governmental organizations, shady money managers, a financial “aid counselor” at college, or the person who is suing you after a car crash. In our wise friend Warren Buffet’s terms, “Build your castle with a moat around it.”
Do you know what the most expensive mistake
6. Sixth Golden Milestone – Repay Your Debts
This milestone happens when you successfully drive all of your debt back to the fiery depths from whence it came. This is a huge relief and that stress evaporates after making it this far. I know, because I finally reached this milestone after paying off my student loans. You’ll find that you can always train for any of these to increase your speed, but becoming debt free in Golden Milestone Seven is like the tipping point in the marathon. Without that backpack full of weights, you’ll accelerate toward the finish line.
7. Win Financial Freedom
When your investments pay you enough to cover your cost of living, you are financially free. You’ve then reached the break-even point, are no longer dependent on a paycheck, can provide for yourself by owning things that pay you, and anything that pays you more than your cost of living adds to the accelerating snowball. You are completely self-sufficient. Anything you’re doing at this point is better because you have complete flexibility and occupational stress is not even on the map. Financial Freedom is the finish line in the marathon. This is how you win the gold. You’ll be able to navigate to any of these Golden Milestones through my categories: 1. Start Your Journey – Start 2. Build Ownership – Ownership 3. Save Money – Save 4. Maximize Your Income – Income 5. Get Financial Security – Security 6. Repay Your Debts – Debt 7. Win Financial Freedom – Freedom You can work on any of the milestones at once. Drawing from my flight background, I’ve prioritized them to first put out any fires and stabilize the situation. But why can’t we have only the one step we talked about? This one sounds glorious: 1. The One Quick Cheat for Lazy Slackers I’ve given this some thought and will prove to you in the next article (link below) that it is actually possible to use one quick cheat in certain circumstances. It falls under the 2nd Golden Milestone – Build Ownership. If you'd like to take a step out of the finance world and see more about our personal life, long distance relationship and adventures since I quit my airline captain job and moved to England, please subscribe to our YouTube Channel: 4000 Miles Together
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Next Article #3: Go from Rags to Riches with One Grand Move
Previous Article #1: Win the Gold in the Money Games of Life