Leaders of the Free World

Amazing results! So I wanted to have my own website, somewhere to post a few articles and get a few ‘subscribers’, to try and get people out of their cubicle jail cells and to start doing what they actually want as opposed to sitting at work for the pay, and also to give everyone a bit of a forum to discuss our plans to break out of Alcatraz.

I’ve written half a dozen articles, plenty more to come, enough cynical rants to keep you amused and a few helpful ones in between. Then it got to actually putting up a website, ‘blogging’ and all that jazz…

This is what really opened my eyes, there’s a whole community of people ‘blogging’ for a living, and this is their ‘job’, for better use of the word. There are however hundreds of websites about creating websites, blogs about blogs, no one* is really ‘writing’ anything of value unless you want to learn about how to create your own little website or blog. *(there are few great exceptions that I’ll link to in a post soon enough)

So I followed all the instructions out there, and now leadersofthefreeworld.org is here, somewhere for you to check in and hopefully check-out of the ball and chain that is your ‘job’. I’m not saying we should all slack off and play a lot of xbox, just that being employed by someone else isn’t the answer.

All of these professional bloggers out of there, websites with subscriptions everywhere wouldn’t be able to claim their subscribers quadrupled in one day, amazing results!? That’s right, on Friday the 18th September my subscriber count went from…. 1… to 4. Take that professional bloggers!

So check back in as you please, feel free to sign-up for the emails as I’ll be posting plenty more articles with a bit of a balance between employed life tirades, some useful online resources that’ll blow your mind, some property and financial who-ha and hopefully a bit of a kick in the arse to help you help yourself.

Related Posts

• The Work Life Balance
• Financial Abundance

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You’ve either stumbled across this article from the archives or been directed from [Your Name Here] Inc. In this article we’re going to touch on budgeting and setting up an automated banking system. This is one of my less cynical rants and is more of a ‘helpful guide’, who would have thought?!

Ever since as early as late high school, you got a job and earned some money, passed your driving exam and finally had the freedom you’ve craved! Freedom enough to go out and try and get the newest hottest car you’d be allowed a personal loan for.

So there you have it, you were free from the time you passed your driving exam to the time you ‘bought’ your first car (with a hefty personal loan). If you didn’t follow the crowd, and bought rust buckets to drive around for your first couple of years of driving (or had a silver spoon from your parents) then you managed to avoid the trap.

What trap? You knew what you were getting yourself into. You learned when you were about 8 years old and your science teacher taught you about the water cycle; Evaporation, Condensation, Precipitation, Collection, repeat. A basic example of a repetitive cycle.

And so it begins…

What does any of this have to do with budgeting, money and getting caught in the rat race? I found that nearly everyone I knew had a hefty personal loan on a car, to drive themselves to work, to get their pay check to pay their loan on the car, which they needed to drive themselves to work, they needed to go to work to pay their loan, for the car, for work…. that was annoying. See what I’m getting at here? This mentality and way of thinking is why the world is screwed into obscene amounts of debt. It’s ok to NOT keep up with the Jones’s, your TV is fine as it is, and you don’t need a new flat screen. Imagine if everyone lived within their means, focused on what was really important and enjoyed the simpler things in life?

The Budget

Before you cringe at the term ‘budget’, it’s your money, no one is making you do this, but you’ll be surprised what you spend. Once you write down what you ‘think’ you spend your money on, you’ll wonder where the rest goes? Start by listing your expenses you’re aware of, such as;

• Mortgage Repayments
• Household Bills (Gas, electricity, water, Telephone, Council Rates etc.)
• Insurance (Car, Home, Boat, Life etc.)
• Grocery Bills
• Gas/Petrol Bills
• School Fees/Tuition
• Birthdays & Christmas Presents

As you can see from the above list, you can include whatever you like; you can go to the extremes of haircuts, toiletries, clothing etc. However much detail you include, it will give us a place to start.

In your weekly budget calculate all of your expenses in the same frequency as when you get paid.

Example:             Car Insurance = $500 per year, if you get paid weekly, $500 / 52 weeks/year = $9.60

In the example above you have to reserve $9.60 per week for your car insurance. We’ll apply this theory to the entire budget.

In my personal weekly budget I have the following categories; Credits (Gross Income), Bills (Automated direct debits), Expenses (Fuel, transport, Food), Spends (My weekly income), Savings, Trust (I put aside a few dollar a week for my younger nieces).

Now the key to all of this to make it work is to align your banking system with your budget. This isn’t hard and anyone can do it, it will however cause some people a bit of temporary pain to have to actually visit their bank! (Check the place out, chat to the tellers and steal some pens; it’s what you pay fees for.)

The Joys of Automated Banking

All banks these days allow you to set up multiple ‘sub-accounts’ within your bank account. You can choose where your ‘gross income’ goes into, and you can set up sub-accounts for your bills, spending, expenses etc. Most banks will even let you rename your accounts, so instead of having account no. 228374 you’ll be able to have your ‘bills’ account. Below is an example of how I have my accounts structured;

Automated Banking Structure

My gross income goes into my ‘credits’ account on a Wednesday afternoon from my employer (hopefully not for much longer!), on a Thursday morning I get to witness the glory of automation, and the money is distributed (you can set up automatic transfers) to my sub-accounts, giving me my weekly pocket money to spend, knowing that I’ve already put all my money aside for bills, expenses and savings. Going even further, to complete the ‘system’, a debit card is linked to the ‘spends account’ so your ATM card is linked to your pocket money account. You know that you have $150 (you define the amount) to spend for that week and once you’ve spent it, you’re done. If you ‘borrow’ from your savings account or bills accounts, you’re going to come up short at some point. This system is 100% better than seeing your ‘gross income’ in your account, going out with your mates on a Friday night, getting drunk and withdrawing $1000 to put on a bar tab and go to the casino!

Once you have your automated system up and running, after a while you’ll see your savings balance swell, be able to pay your bills comfortably and enjoy yourself spending your weekly pocket money. But hopefully at some point you’ll think to yourself, is this it? You’re saving $100 per week, that’s $5,000 per year, which if you work for the next 40 years is $200,000. Congratulations! That’s no mean feat, not many people would have the discipline. But surely this will make you realise that after 40 years you’ll only have saved enough money to by a modest home in the suburbs?

Is working hard and saving your pennies the answer?

Believe it or not you are your own little company, a one man incorporated. You have a cash flow, expenditure, company shares (grand total of one, you own the lot!) and some of you out there even have company assets (your house, savings, car etc.)

Here’s the kicker, your company is probably solely focused on staying afloat, cash flow only, and the vast majority of us aren’t doing a very good job and are cash flow negative. Luckily for us we don’t have to report to a board of directors or give an earnings report and pay dividends to share holders. So what? What I’m getting at here is for you to be a success, the more you look at yourself like your own little business the easier it is to break things down and prosper. How’s your research and development department ticking along? None existent? How’s your balance sheet? Are you always battling to keep your head above water?

Your Little Company

Once I’ve managed to convince you that you are the sole share holder in your company we’ll look at how we can improve things within your organisation. Here’s a look at what we’ll talk about;

• Expenditure - Household Bills, Groceries, Insurance, Social Money
• Balance Sheet - Your personal budget
• Company Assets - Your house, car, investment properties, shares etc.
• R & D - Your education, learning, seminars, books
• Business Plan - Personal Goals, where do you want to be in 5 years time?
• Your Balance Sheet

Before we can dive into building up your assets, freeing your time (employing another means of income) and looking ahead to the future, you have to start with your current situation – your weekly balance sheet.

Currently; most people earn their weekly wage, spend away at will and are then struggling to make ends meet when the electricity/phone/gas bill arrives, feel the pinch at Christmas and birthday time and live from pay to pay. You receive your pay, spend away, struggle with bills and expenses and then think about saving what’s left, but hey, you’ve worked hard so you can always save a bit next week?

Your Current Spending Pattern

Now that we’re going to look at things as a company things will be a little bit different. A company forecasts a yearly budget for all of their anticipated expenses. A company knows how much their employees annual salaries are (your spending money) and they know their profit targets for the year (your savings). Throughout the year things fall into place as per the business plan, and adjustments can be made along the way.

The key to this system is setting a realistic budget. I don’t care how much you want to spend on cigarettes, beers and going to restaurants, knock yourself out, but all of these luxuries fall under the ‘spending/income’ category of your company budget. Here we’ll look into a budget and later at an automated transaction system.

Your New Cash-Flow Structure

What? That’s not right, I earn $1000 a week and I’m only allowed to spend $200?! That’s all you can afford to spend or you’ll be broke! In a company structure you’ve allocated some of your money for your bills & expenses, you’ve put some money to the side to grow, you’ve bought a book or two and maybe attended a seminar (education is optional, but recommended) and then finally with the remaining balance, you’ve paid yourself some spending money.

I’ve set this up for several of my friends and colleagues, it’s not rocket science. I recently read a ‘get-rich-quick’ style book that was listed as a best seller on Amazon.com. I couldn’t believe my eyes when the focus of his book was budgeting and saving a bit of money! Are you serious? Surely the general population isn’t that thick. Ridiculous, how big can that book be? “Don’t spend more than you earn, also save a bit of money, THE END.”

What else are you working for? So you can keep working? Forever? Wake-up! Sure, you might only be able to put aside $20, $50, $100 per week, but you can build on that. To get ahead financially, here’s a crazy idea; don’t spend more than your earn?! Once you see where your money is going, realise how much you waste on fast food, junk and getting drunk, you’ll soon tighten up the budget and pour more into your savings. Once your savings account looks impressive, then you move onto investments, alternative income streams and making your savings work for you.

Yeah, and?…

Once you’ve devoured this article and possibly followed onto read about budgeting in the water cycle you can then start looking at your ‘company’ assets (investments, real estate) and Research and Development. Some of you might be a bit confused by R & D, but don’t you think it’s a bit odd how you were never taught about managing your finances, setting up tax structures and trading stock options? There’s never a better time to invest in yourself and learn something new.

So now we’ve got our company structure, hopefully you’ve seen the light and realise that you’ll no longer be surprised by a gas bill or mortgage repayment.

Successful?

Have you ever seen a slim, fit, athletic manager, executive or director? Me neither. Have a good look around – news articles in the paper, online, always with a photo of ‘some’ CEO who just closed a big deal, no need to ask who ate all the pies.

And there it is, you’re that much of a success that you don’t have time to eat properly, exercise or get a ray of sunshine during the day? I think someone should evaluate how loosely we use the term ‘success’.

The corporate ladder is a funny one, its own little world. You’re a team player, a company man.

In my previous job, my next step up in a few years would have been a project manager; making the tough calls, running the job, reporting to my bosses about the project cash-flow, and ultimately being the first in line to be shot. Inspirational stuff.

Before I entered the working world, I decided I’d like to be a project manager – all that control, looking after the job, the smooth operation of things. I was quick to discover that it meant excessive responsibility, living the job, no time off and in the end devoting your life to the company and project.

I’ll harp on about this, because I am so perplexed that someone who’s supposedly been educated can become so brainwashed and removed from reality. To be honest, I’m also so passionate about this work/life conundrum because I used to be so hell bent on a career path.

You’re special!

Working within a company structure, you’d be surprised to find that you’re just another name in an organisational chart, replaceable and interchangeable. The further you travel up the company ladder, the harder it will be to climb back down.

Now a lot of the guys I used to work with out on the construction sites were a good bunch of guys, but picture your typical construction workers. Not the healthiest brood around, it was the norm, work 11 hours, shovel in a couple of pies during the day and then head to the pub at night time, repeat. It was a social norm that most of the older hands were on heart medication, blood pressure tablets, and cholesterol medication. Not once was the thought to exercise, eat well and have a break from work. People (management, workers, anyone) are willing to put their own health and safety before stepping back and taking the pedal off the gas?

If you remember way back when you first enrolled in the joys of the working world, you worked to live, not the other way around. It will all become a grey mash-up of job/career/life/work. You stupid JERLK.

The ‘career’ might be fit for some of us, if you enjoy the job then why not. But if you want to climb the corporate ladder then don’t worry about the MBA or extra-curricular study, here’s an easy how-to;

• Carry several documents under one arm when walking through the office,
• Look slightly angry around the office, people will think you’re busy,
• If you work in front of a computer, shake your head a lot, the odd fist slamming against your desk won’t hurt,
• Casually greeting your bosses doesn’t hurt, a bit of bravado and confidence will get you everywhere,
• Most superiors/managers/executives are hot air factories, say yes a lot and stroke their ego’s,
• Don’t get caught playing solitaire too much,
• Learn a few ‘office buzzwords’ Refer to Corporate Fluff for the game ‘Wank-word Bingo’.

So there you have it, you could be a manager in no time at all. One thing that I won’t be forgetting too soon is the conversation I had with one of my managers when I resigned. A human resources ‘manager’ was also present. After explaining how I wanted to take a brief sabbatical from the working world, explore my options, maybe travel a bit etc. the HR manager present offered me counselling sessions! So the concept of taking an extended break from work is that far removed from the corporate world psych that I probably have a screw loose?

God help us all.

Millionaire Lifestyle

If only I could win lotto. The catch cry of millions, the catch cry of everyone really? I know I wouldn’t scoff at someone giving me a few million dollars. What would you do with a few millions bucks? Big house, car, holidays and maybe a new plasma TV? You’re chasing the ‘life’ of a millionaire, not to be a millionaire. Most of you would get bored not working, which disgusts me and motivates me to try and change your mind.

Here’s an exercise you can do right now; what’s your ideal lifestyle? You might be stuck in a rut at work, bills mounting, living in a dive, but just for a minute take some time to think about what you want. Not a million dollars, quantifiable things, real things.

I’ll give you a few of mine, for me to be ridiculously happy and even more smug than I am now; I want to be living in an apartment in continental Europe, put more time into photography, zooming from city to city on a nice old motorbike and enjoying the delights of Belgian beer with my girlfriend.

The Facts

Now here’s the next part, put some dollar figures to the running costs of your lifestyle; let’s have a look at mine. There’s the odd ‘purchases’ (like the motorbike) but the rest is a general cost of living. I worked out that my ideal lifestyle would cost around $250 per day. So now I’ve got a target and a goal to strive for. If I can generate $250 per day without being employed then as far as I’m concerned, I can live my dream lifestyle.

So let’s cut to the chase, what is financial abundance? I’ll spare you a fair bit of money and time in attending ‘wealth building’ seminars, motivational speaker conferences and trawling the internet for hours on end.

I’m the guy that’s spent thousands of dollars listening to ‘share trading’ gurus tell me that it’s never been a better time to get into the market! It only took me one seminar to realize the good money is in selling tickets to a seminar! (On a sidenote, educate yourself as much as you can)

Having a financially abundant mentality is believing that you’re not working for money, you’re there because you enjoy your job. If you want money you’ve got other resources & income streams up your sleeve. Multiple sources of income include; property, stock market, online marketing, businesses etc.

Too often I’ve had the following conversation with a co-worker;

Me –                                     *usually ranting on about money/life/work etc…*

Co-worker -                        “Nah I’m pretty comfortable with where I’m at financially”

Me –                                     “So what’d you get out of bed this morning for? Wouldn’t rather a sleep in?”

Co-worker -                        “Well yeah but there’s bills to pay, you know”

Sometimes, more often than not, the light bulb goes off at this point and they realise what I’m on about. If not then I’m usually wasting my time. People become either complacent or conditioned to what they are used to, don’t forget to dream and look at the bigger picture.

Getting Ahead of the Pack

Once you dive into the rabbit hole, good luck coming out and returning to the working world. As a bit of a background; I thought I was years ahead of the game – I saved all of my pennies from my first job and brought a rental apartment at age 18, went to university, brought my second house at 23 and now I’m ‘stuck’ (if you believe the masses) with half a million dollars of property debt and a 25 year mortgage hanging over my head. And all this by trying to ‘get ahead’ of the pack!

The attempted solution – Over the past couple of years I’ve tried the lot; Google adwords, affiliate marketing, online clickbank sales, selling an online eBook, share trading etc.  And I’m sad to say everything failed. I can honestly say that each of these schemes failed, not because I didn’t know what I was doing or flew blindly into a new ‘scheme’, the number one reason was that I just didn’t have the time. I was too busy with ‘work’ (for someone else) and I didn’t have the time to develop these other sources of income. Now that I’ve made the jump and landed in the free world I’m going to be focusing all of my efforts on trying something new and putting a lot more time into my own ‘research and development’ department.

The solution – I’m currently involved in month 7 of a lengthy project. A friend and I who were both working in the backward industry I mentioned in ‘The work life balance’ realised our industry was run by the old school and that the implementation of a bit of software would increase efficiency and simplify the whole operation. Not to bore you with the details, but we’ve invested some money and over the past year have been involved in; designing a new software product from the ground up, drafting a patent specification, dealing with overseas subcontractors, graphic design, company branding, business plans and website design. In the near future we’ll become heavily involved in importing, packaging, logistics and sales. It makes you laugh just a bit when the bank manager looks across the table at two scruffy guys and says “And sorry what are your current positions within the company?” to which we both look at each other a bit bewildered and answer “Uhh.. Company Directors?” Our friends look at us both a bit strangely, usually asking ….’how’. Sure we didn’t know how to set up a company, but I knew how to pick up a phone book and book an appointment with an accountant to ask him?

So there you have it, a director of a company. Once you know what’s involved and how easy it is to setup, you’ll be less impressed the next time you meet a ‘company director’.

Your Next Move

I can’t recommend this highly enough, in your next lunch break head to Steve Pavlina’s website and trawl through some of his articles. It’s from Steve that I’m going to ‘borrow’ his advice; with all of the get-rich-quick schemes and investments you can make, your best bet is yourself. Invest some money in yourself. If you’re confused by this read on.

“Pay” yourself $500 per week (possibly out of your savings) and now you’ve got 8 hours a day to delve heavily into research and development. Buy up on eBooks, there’s also plenty of free resources online & in libraries. If you can’t make the big jump, as some of us will have financial commitments we won’t be able to avoid, have a look at what you’re currently doing. Look around, look above you, who are you paying for; your boss, his boss, the admin girl, the payroll lady, the tax man, your superannuation (401k) fund? Everyone is taking a cut out of what you’re earning as a ‘total’ figure. Once everyone has been paid by your potential earnings, then they’ll pay you your $26 per hour. Feeling ripped off yet? Try and apply your skills and the value you add directly to your customer.

If you try and fail, what’s the worst that can happen? You’ll be back at work in another few months, doing the same job, reading my next article?

You’ve got nothing to lose and everything to gain! You have plenty of options; no one is going do this for you!