I (Jim Rohn) have come up with what I think is the major role of grandparents in our country. The major role of grandparents in this country should be to teach their grandchildren how to be wealthy, cultured, and happy. Grandparents should not have to say, “I’ve worked all my life, now I need help.” They should be able to say, “I’ve worked all my life, now I can help.”
If you are not financially independent by the age of fifty, it doesn’t mean you live in the wrong country. It doesn’t mean you live in the wrong community. It doesn’t mean you live at the wrong time. It doesn’t mean you are the wrong person. It simply means you have the wrong plan. I’ve discovered that you can be a nice person with the wrong plan. You can be a sincere person with a poor plan.
And remember, it’s not uncommon. Everything tends to get off course over time. When astronauts make a moon shot, they don’t stay on course throughout the whole trip. They are what are known as mid-course corrections–those fine-tuned changes that set you on a straighter course. And on the way to a destination as far as the moon, these slight changes are so important. If there’s one target you don’t want to miss, it’s the moon.
If you will make wealth and financial freedom that important a need, you will have the best opportunity to arrive. And here is the first step you need to take: put together a financial statement.
When I talked about financial independence with Mr. Shoaff, he asked me if I had a current financial statement. I said, “What is a financial statement?” That’s when I got my primary education in making a financial plan. Mr. Shoaff explained that it is very important to know exactly where you are, without kidding yourself, so you can then come up with a good plan for going form where you are to where you want to be.
It turned out to be fairly easy to put one together. You merely list the value of your assets on one side of a piece of paper and the total of what you owe–your liabilities–on the other side of the paper. Then by subtracting one from the other, you come up with your current net worth. It doesn’t tell you what you are worth as a person, but rather what you are worth financially.
I said to Mr. Shoaff, “My financial statement isn’t going to look that good.” He said, “It is not important how good it looks. What is important is that you do it.”
So I put that first financial statement together. I had plenty of liabilities–money I owed my parents, loan payments to institutions, and all kinds of other debts. On the asset side, I really had to scrape the bottom of the barrel. I even put my shoes on the asset side. They were worth something. How embarrassing that after six years of working, I had to list my shoes as equity!
Of course, you don’t have to put the results on a public bulletin board, but it is vitally important that you know how you’re doing.
Here are some other points. First, keep excellent books, not only for tax purposes, but for yourself, your financial future, and for your own sense of self-worth. Have you ever heard the expression, “I don’t know where it all goes?” Well, from now on, make a new commitment to financial independence and to the value that comes from knowing where it all goes and where it all comes from. It is just one of those important disciplines that can help you prove to yourself that you are on a new road, walking in a new direction, becoming a new person, and arriving at a new destination.
Without that effort, you will keep falling back. I found out that you can make five thousand dollars a month and still go broke. You say, “How could you go broke making five thousand dollars a month?” It’s easy–spend six thousand! And when you make five thousand dollars, spending six thousand is not that difficult. Someone once said, “If your ‘outgo’ exceeds your income, your upkeep becomes your downfall.”
So be the master over whatever you have and whatever you are. That’s where the seeds of greatness are sown–great wealth, great health, great results, great influence, and a great lifestyle. Take interest and even delight in doing all the small things well. It makes you a sophisticated person to know where the source of wealth and happiness is.
Surely life is reluctant to hand a fortune to someone who constantly misuses his paycheck. It’s not the amount that counts. It’s the plan and the faithful application of that plan that counts. It’s those ingenious keys that unlock the door to the kind of person we really want to become. And in becoming that person, you attract all those treasures and values that most people would call “the good life.” An abundant life, a product life, an enterprising life, an influential life, a stylish life… that’s the good life.
* Source: Leading an Inspired Life by Jim Rohn