Ask Steve Now!
There’s a story—and I’m modifying this a bit for this radio show—but do you consider yourself a leader in your family?
Probably do. In fact, you are probably a necessary leader. It’s necessary for somebody to be the leader in every family. The question is: Are you a leader or are you a follower? Let’s look at the scenario.
The Seven Habits of Highly Effective People
This is a story and what it is is we’ve got—we are trying to get through this forest. I borrowed this from Dr. Stephen Covey. You can read and should read his book The Seven Habits of Highly Effective People. Buy every CD that you can possibly get about The Seven Habits of Highly Effective People, eventually get to the 8th habit, but you have got to master the seven otherwise the 8th just sounds like hype, but it’s not. Master the seven habits of highly effective people.
And he tells the story about okay, here’s an organization and they are trying to get through the jungle, from one side of the jungle to the other. And they put on machete-wielding classes, they put on exercise classes, they study the type of trees, they study the type of—they invest massive amounts of money getting the best tools they can possibly get to actually get the wood chopped down as quickly and effectively as possible. But one person—and they’re all working.
They are—man, their productivity is unbelievable. They are cutting down trees like you wouldn’t believe—like mad men and women. And they end up with just massive amounts of reserves of lumber. It is incredible how much work they’re doing and how productive they are at cutting through that jungle.
But then a lone person, you, decides to climb the tallest tree. Gets to the top of the tree and yells down, “Wrong jungle.” You see the point? They’re down there screaming back at you, “Shut up. We are making progress.” But you have to look down at your family and go, “Guys, wrong jungle.”
Is Your Ladder on the Wrong Wall?
Covey again, have you ever climbed the corporate ladder and realized it was leaned up against the wrong wall? Most of us have. So when I tweeted this morning talking about freedom, freedom, freedom—financial, personal, and spiritual freedom—and how important that is even though this happens to be the week of Fourth of July, it really came up as a coincidence or subliminal thing that I’m doing it this week. Freedom, freedom, freedom.
See, what happened with Del, myself, with Natalie, with any of us who are financially independent with our real estate, it’s because we had this high, high value for freedom. We also had a better map and a clearer definition of freedom. We’ll call it independence.
Are You Independent?
The reason people use the term “independence” and I am going to use it here, is because that’s what we’re told—you want to be independent. You want to move out of your house and get a job and become independent. Well, let’s see if that definition is true or not. If you get an allowance at home, you’re living with your mom and pop, and each week they say please do these certain chores, please keep your grades high, do well at your education, and I will give you an allowance at the end of every week.
You are in a dependent stage, agreed? And then the goal is to get out of the home, have your own place and become independent. So again, if your parents are giving you an allowance to get you to do chores, to get you to keep your grades up and so on, that’s a dependent stage.
So now let’s go to quote unquote “independent.” You move out of the house, you have your own home, you have your own car, you pay your own bills, and you have a job. Have you moved from dependent to independent yet? See the lie, misunderstanding, whatever you want to call it? It’s right there, isn’t it?
You are still dependent whether you get an allowance from your parents or you get an allowance from a corporation you are still dependent. You are like a little kid, “Ma-ma, dada, need more money.” How about you go to your boss right now, “Boss-boss, I need more money.” You’re a little kid. You haven’t even reached the state of independence yet.
Dependent to Independent to Interdependent
What I’m talking to you and your family about here today and every day on the Real Estate Investor Radio Show is that step from dependent to independent, to freedom. But so few of you even knew that definition. You didn’t even know there was another phase, and you ready for this? When you get to independent, there’s actually a third phase ‘cause remember, living at home or having a job is still dependent. Those are both one phase. The second phase is independent where you own businesses, in our case real estate.
Then there’s a third one. So not only do most of you not know about the second one, there’s a third one called interdependence. Interdependence. And that’s what the truly wealthy have and what every one of you can and should have. And if you think that’s idealistic, let me take it one step further—it’s what every American should have, every doggone American and eventually every citizen of the world. Now, you have got to do something for it. I am not talking about socialism. I am talking about getting off your butt and doing something to help and serve other people that deserve them sharing with you their money.
Financial Independence
Financial independence is this—it is not saving up a big nest egg, it’s not saving up a huge amount of money and then living off that money by hacking away at it when you retire. It’s about simply this—here’s the true definition of how wealthy you are: How long could you go without working and still pay all your bills? That’s your wealth. If you say well, I couldn’t even go six months, all my savings would be gone—then you’ve got six months of wealth.
And remember for most of you what that would be is you have got a little egg over there, say it’s $50,000 you’ve saved up either 401(k) or IRA or something, if you lost your job, you would have to sell that, you would have to pay all the taxes. Then you would have to pay your bills, car note, house note, everything all the way to groceries, and you could last about six months. But before that six months ended, you have to go back to work.
And you will take whatever you can get because you have still got a dependent mindset. And you’ve been told it’s an independent mindset. There’s the danger. See the wrong map? What if I was your mom or dad and I had told you every day, “No, no, no, no. Having a job is dependent. Building passive income makes you independent. We have X amount of hundreds of thousands of dollars each year of passive income, and I am going to teach you how to do this same thing.”
Can you see how your life map would have been different? You would have still gotten a job. You would have still gone to college. But on the side and at the exact same time you would have been building passive income streams so that they always paid your bills. Then with the passive income, you have freedom, independence.
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