[This is the transcript of a lecture I am preparing to give around the country. If you are in Las Vegas, contact me and I would be happy to deliver this lecture to your group over the next 60 days.]
The world is changing faster than ever. What used to take decades, is now taking years or months. And indirectly as a result of these changes, we have two looming crises, the elderly retirement crisis and the college-grad employment crisis.
Rumor has it that corporate America is not a safe place to work anymore. We’ve seen our friends get laid off or maybe we’ve been laid off. Some of those who are still working have had their pay cut. So Americans are overworked and underpaid and they seem to have less time and less freedom.
And there’s something wrong with society when we can measure at a national level, a 35% increase in the chance of a heart attack every Monday morning as people rush off to their jobs.
As of April 3, 2015, the Economic Policy Institute reported that,
In a complex economy, conventional measurements fall short. At 14.5 percent, the unemployment rate of workers under age 25 was slightly over twice as high as the overall unemployment rate, 6.7 percent.
But in today’s labor market, the unemployment rate drastically understates the weakness of job opportunities. This is due to the existence of a large pool of “missing workers”(3.3 million-adds at least 3 points)—potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job.
In other words, these are people who would be either working or looking for work if job opportunities were significantly stronger. Because jobless workers are only counted as unemployed if they are actively seeking work, these “missing workers” are not reflected in the unemployment rate. http://www.epi.org/publication/missing-workers/
Technology is accelerating and job security is rapidly declining. It just doesn’t seem like the 20th century models of making a living are as reliable as they used to be. In nearly every aspect of our lives we are adopting newer and better way to do things, but when it comes to earning a living, we are still stuck in the old ways.
We live in the greatest country on the planet but there are a lot of people sitting around being cynical. I say get a clue, there is a huge difference between “3rd world problems” and “1st world problems.” People are complaining and whining about the upsets of the old model when the obvious conclusion is to leave it and embrace the new model, the new economy, and that is what we are here to talk about today.
Since so much of our lives revolve around our work and the way we make our living, many people are thinking, there just has to be a better way.
The biggest challenge facing our world today is not making money, but what to do with all of the displaced unemployed people. With all of this transformation around us, people are being forced to make changes in employment and lifestyle, but they are frozen by indecision, afraid of making the wrong new career choice or afraid they don’t have the right skill set.
It’s time to face the truth: the industrial age is dead.
And as a result, going to school to be educated for employment is fast becoming an obsolete idea. A steady paycheck and the security of a single employer is an anemic industrial age idea.
Watch for Part Two
Most Americans are either ignoring this fact of life hoping it will go away, or facing its eventuality with fear and trembling.
Based on a year’s worth of research, I am certain that 9 out of 10 people reading this blog fit that category.
There is plenty of available data showing the hopelessness of the situation.
Economists speculate on the massive Baby Boomer retirement fall-out they say is sure to come over the next decade.
From numerous reports it appears that the typical bread-winner leaves the workforce at age 65 with around $50,000 in assets —a drop in the retirement bucket especially as many are living longer.
OK fine, we are facing economic challenges, so what?
Our predecessors faced and overcame challenges for centuries. America has a long and illustrious history of standing up to adversity and coming out on top.
For crying out loud—our ancestors carved a civilization out of the wilderness, populated an unknown land, produced most of the world’s food, most of the technology and single-handedly create a new thing called the middle-class while other nations watched in utter amazement.
How did they do this?
Americans are resilient. Americans are resourceful. We dream big and play big. And what of Yankee Ingenuity, the Puritan Work Ethic, common sense, and pulling ourselves up by our bootstraps?
For two centuries, we provided hope for a life with political freedom, economic prosperity, and an increased standard of living for millions around the globe, but now we are being told that we are finished, beyond hope, and helpless to solve our current crisis.
And some are actually falling for it. I refuse to accept that version of reality.
I refuse to acknowledge that the American Dream can no longer become the American Life.
I refuse to give-in, knuckle under, and forfeit my children’s future.
My version of reality is that there is actually more opportunity now for financial success than at any time in the history of America—if we will embrace it!
Please forgive me if what I write here offends you but seriously, how wimpy are we? Humanity has overcome crises and challenges much greater than the American retirement problem.
Don’t get me wrong, at least in terms of impact, this is a pervasive challenge and has serious national implications not unlike the specter of global domination by the Nazis or the challenges of the Great Depression. And if you are in your 50’s or 60’s this is without a doubt scary and imposing.
But when you remove the emotion and analyze it scientifically, it is simply a matter of understanding the causes of the problem and devising solutions. Ok, so maybe we will have to voluntarily reduce our standard of living for a while or stop going into debt for vacations or the latest fashions. Gasp…we might even have to live within our means…are these things really that hard to understand and implement?
Maybe Forrest Gump was right, “stupid is as stupid does.” Sorry but our choices over the past 3 decades have put us in this position.
The American retirement problem is nothing more than an issue of perspective.
Look at the Cashflow Quadrants chart—American economic philosophy was founded on the Business and Investor side of the chart or the concept of entrepreneurship.
Americans from the very beginning lived from the perspective and belief that they had to take care of themselves.
They knew their standard of living and financial security rested on their personal ability to plan for the future and to take full responsibility for that future.
But since the Industrial Revolution, our general economic philosophy has shifted to the employee side of the chart. Entrepreneurship is actually shunned by most, or at the very least, misunderstood. We traded common citizen business savvy and investor acumen for the accumulation or “nest egg” mentality, which has morphed over the last 30 years into an existence of life-long debt and dependence on government.
It doesn’t take a rocket scientist to see that being an employee alone leads to economic slavery and dependence. Without the basic tenets of business and investing as part of our personal financial strategy, we have no hope of true prosperity and financial security.
So the solution is simple—return to our former philosophy of owning businesses and investing. I know that this might be simple in concept but difficult in application however, this is where our ingenuity, tenacity and hard work come in.
Thousands of Americans have figured this out and you can too if you only have the will and desire to make the necessary changes. If you are serious about changing your situation and are willing to focus and even sacrifice for five to ten years, you can solve the American retirement crisis for yourself and perhaps even share your solutions with friends and family.
While there are undoubtedly dozens of potential fixes to choose from, I have 2 that I recommend as solutions to the American Retirement Crisis.
But they will only serve as solutions if you actually act on them, so click on these links and investigate the options they provide. If these are not the right actions for you to take fine, BUT TAKE ACTION some how to change your current situation. You are your best chance at a secure financial future.
In April of this year, John Stossel wrote a thought provoking article about the ability of never quitting as being the reason America has been successful.
I quote him here:
In the USA, it’s OK to fail and fail and try again. In most of Europe and much of the world, the attitude is: You had your shot, you failed, and now you should just go work for someone else.
But this limits the possibilities. And some of America’s biggest successes came from people who failed often.
We know that Thomas Edison invented the light bulb, but few people know that Edison filed 1,000 patents for ideas that went nowhere. He was fired by the telegraph office. He lost money investing in a cement company and an iron business.
Henry Ford’s first company failed completely.
Dr. Seuss’s first book was rejected by 27 publishers.
Oprah was fired from her first job as a reporter. A TV station called her “unfit for TV.”
But they all kept striving — and succeeded. They were lucky to live in America, where investors and your neighbors encourage you to try and try again. We are lucky to benefit from their persistence.
But those happy experiments are less likely to happen today. Now there are many more rules, and regulators add hundreds of pages of new ones every week.
Dallas Mavericks owner Mark Cuban left school with no money and no job prospects. He managed to become a billionaire by creating several businesses from scratch. I asked him if he could do it again today, and he said, “No … now there’s so much paperwork and regulation, so many things that you have to sign up for that you have a better chance of getting in trouble than you do of being successful.”
It’s not just big corporations that get hassled by regulators, the way progressives might like to imagine.
Kids’ lemonade stands — and one I tried to open in New York City — are sometimes shut down for not having proper business licenses.
When Chloe Stirling was 11-years-old, health officials shut down her home cupcake-making business.
The more government “protects” us, the more it puts obstacles in the way of trying new things. It does that every time it taxes, regulates and standardizes the way things are done. Simultaneously, government offers “compassion” — welfare and unemployment benefits.
Faced with the choice of collecting unemployment or putting your own money at risk and hiring an army of lawyers to deal with business regulations, I understand why people don’t bother trying. When that attitude is pervasive, the American dream dies.
On my TV show this week, economist David Goldman says, “The U.S. government has done everything possible to make it hard for people to take a new idea from inception to startup to expansion.” He says that when he told a former CEO that he was going to be on my show, the ex-CEO said: “Just tell them to shut Washington down. That’s all they need to do!”
Washington won’t shut down. But couldn’t regulators just chill out for a while?
Big government doesn’t send us the message that we can make it on our own and that great things may happen if we dare to try. Government mostly hinders us, and then brags that it is waiting to take charge when we fail.
I believe that the American Dream can still become the American REALITY!
But it requires a singular mindset. We have to be willing to work hard and do things that we are not used to. It demands personal responsibility for our own outcomes and doing some double duty (working at more than one thing at a time). And we will have to spend less time watching “American Idol” and more time developing our ideas and taking educated risks.
170 years ago, Alexis de Tocqueville stated that, “[Americans] are constantly excited by two conflicting passions: they want to be led, and they wish to remain free. . . “
Tocqueville was very clear, it is impossible to reach our potential without taking complete responsibility for our actions and owning our current conditions.
I have spent the entirety of 2014 to this point, speaking anywhere people would listen regarding this very issue and then offering solutions that the average American could engage to turn the situation around.
My main message has been that there is no political liberty without financial liberty and to engage in financial liberty or FREE ENTERPRISE, there must exist a certain level of political liberty.
One of my mentors, Cleon Skousen, always taught that the magic of America was that the citizens, free from government intervention, had the right to try, buy, sell and fail. And if you tried enough times, you would most likely succeed.
Today that philosophy has been replaced with that of avoiding risk at all cost and being safe and working for the government or a big multi-national corporation.
This sounds more like a personal wealth death sentence.
To have the kind of financial health that will allow a citizen to engage in liberty of all kinds requires enough residual income to meet all day-to-day living expenses plus 30% to provide citizenship activity flexibility (donations to or promotion of liberty causes or time spent at the state or federal legislature or local political service or speaking and writing, etc).
[Residual income, is income that continues to be generated after the initial effort or cost has been expended. Royalties or rent income for example, are types of residual income.]
For example, if your living expenses are $4,000 per month, you will need a minimum of $6,300 of monthly residual income or $76,000 per year (approximately 20% for taxation and $1,200 for liberty flexibility) to be economically independent and able to engage in liberty.
There is no longer any question, America faces a multiple front crisis; a serious retirement crisis along with a potentially disastrous national and personal debt crisis.
Most Americans recall the devastation caused by the 2004 Indian Ocean Tsunami. We sat in utter horror and even screamed at our computer screens as we helplessly watched people being swept away by the unrelenting waters.
The financial crisis we face today is no less menacing. The current financial tsunami is acting very much like the event of 2004. As the economic tide recedes, we watch not in horror but in curiosity or even total oblivion. The entire nation appears to be suffering from Normalcy Bias,* denying or ignoring that a crisis exists at all. All the while, the water has reversed and is now up around our ankles.
What needs to happen is that real men and women need to face their fears, be responsible and be willing to determinedly taking control of their own destinies.
If we yearn for our children and grandchildren to enjoy the freedoms that we do today, developing this level of Financial Freedom Health is a moral and familial imperative.
Take the Financial Freedom Health/Education Assessment and see how prepared you are to perpetuate financial and political freedom.
Financial Freedom Health/Education Assessment
- Do you have an adequate retirement plan? (Based on the $76,000 residual annual income discussed above, this means a $1,750,000 nest egg with a 4% annual dividend. Using the accumulation method at 7.9% earned interest annually, this will require retirement plan installment payments of $1,215 each month for 30 years. A business or a properly acquired real estate portfolio can accomplish the same residual income in a much shorter time and in a safer manner).
- If your current retirement plan is not adequate, do you have the skills and resources to correct it?
- Have you done sufficient research to really know if your retirement plan is crisis proof?
- Do you review your retirement plan semi-annually? Are staying up-to-date on all law and policy changes that could impact your retirement plan and investments?
- Do you have enough knowledge to trust your retirement providers or are you “blindly”trusting them?
- Do you have a will or living will or a revocable trust in place? Why? Have you explored all options?
- Do you have your investments protected as much as law will allow? Are you sure?
If any of these questions are troubling to you, click here to begin a free course on financial freedom.
In the USA, it used to be OK to fail and fail and try again.
Before Harland Sanders became world-famous Colonel Sanders, he was a sixth-grade dropout, a farmhand, an army mule-tender, a locomotive fireman, a railroad worker, an aspiring lawyer, an insurance salesman, a ferryboat entrepreneur, a tire salesman, an amateur obstetrician, an (unsuccessful) political candidate, a gas station operator, a motel operator and finally, a restaurateur.
At the age of 65, a new interstate highway snatched the traffic away from his Corbin, Ky., restaurant and Sanders was left with nothing but a Social Security check and a secret recipe for fried chicken.
As it turned out, that was all he needed.
If you, like Colonel Sanders, refuse to give up on the American Dream, click here to start your American Dream education.
* Normalcy bias refers to a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and its possible effects. This may result in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of governments to include the populace in its disaster preparations.
Historically, most American institutions of higher education struggled to fund themselves. Non-profit institutions did not generally have mechanisms for generating revenue. Thus they relied on tuition, donations, and an endowment.
Harvard, America’s first school, suffered this same fate. In 1636, without any endowment (the gift from John Harvard, the school’s name sake was quickly squandered) the college opened it doors but due to lack of finances, it wasn’t long before they closed those doors, reopening later and repeating the process several times in its early history.
In 1642 Harvard’s president, thirty year-old Henry Dunster, went on a fund raising tour and secured enough “in-kind” subscriptions called “colledge corne,” from local county residents to stabilize the finances.
But those subscriptions petered out in less than a decade.
Citizen subscriptions, sparce local taxes, donations, tuition, and endowments are how higher education was funded from 1636 until the early 1900’s.
By the end of WWII, the G.I. Bill became the popular means of funding higher education.
In 1965, the Johnson administration implemented the HEA (Higher Education Act), which served to help the poor and significantly increased the college population, but it also started the trend that we all now face– sky-rocketing tuition rates. By 1972 Pell Grants and ever popular student loans were added to the funding options provided to low and middle income students.
Since federal funded tuition was swelling the ranks of higher education, the government determined that it now had to regulate that which it was funding.
Accreditation morphed from a system of academic equivalence to the gate keeper of all higher academia, whether your students were receiving federal funds or not. (See the Monticello College white paper to determine if all of this money has improved the quality of higher education today.)
At Monticello College, we take a firm stand in not accepting a single dollar of federal money. We neither desire federal assistance nor do we ask for its oversight. But after 5 decades of Americans on the educational dole, the average family does not have the funds to pay for tuition out of pocket. We have lost the concept of pay-our-own-way.
As a result, Monticello College must find creative ways to fund our operations and build our endowment.
Strongbrook is a real estate investment company with a unique 21st century approach to building client investment portfolio’s.
Probably the best explanation I have every heard comes from a 22-year-old college student video.
In an effort to funding the school, Monticello College has entered into a loose association with Strongbrook introducing the benefits offered by this exceptional company to our friends and supporters.
Not only can Strongbrook assist families in securing a strong and vibrant economic future, it helps to create the means to provide funds for student tuition. Monticello College is also investing into a Strongbrook financial Game Plan with the intention of securing enough investment property to fully fund our endowment.
Click Here to watch a short video to learn more.
Click Here for a Free PDF book or audio book. (Passcode is….FREE)
Since launching in 2007, Strongbrook has helped more than 2,500 investors across 47 states invest profitably in real estate — during the worst recession we’ll see in our lifetimes.
In fact, their investors averaged a 19.8 percent return last year, despite the continued recession.
Meet real Strongbrook investors and hear their stories by watching this video:
P.S. I appreciate that this funding approach may seem unusual or even uncomfortable to some of you. All change is uncomfortable. And higher education is changing before our very eyes. Technology is having as much impact on higher education as it has had on everything else.
In a Fourth Turning world nothing remains the same.
Give us a fair chance to show you some things you may not know. Take the time to watch the videos or read the MC white paper or free books offered or click here to get an awesome education in financial freedom called Financial Freedom 2.0. At the very least, you will learn some things you didn’t know. In the best case scenario, this could change your entire financial future.
Before we talk about how to increase personal financial autonomy, let’s be very clear on the current state of financial autonomy for the vast majority of Americans today.
A few Google searches produce a frightening collection of articles, books, newscasts, editorials, and government statistics all pointing to a condition never before experienced by the United States of America–WE ARE BROKE. WORSE, WE ARE IN UNRECOVERABLE DEBT.
The United States government has put the nation in debt several times before over the past 200 years.
But it was always recoverable. Today not only are we swimming in a bottomless pit of national debt, the middle class has adopted the policy for their personal affairs.
Over the past year, I have interviewed every couple in my classes and in other environments (over 150 couples now) to assess their financial health. These couples range from low to high middle-class income levels, which means anywhere from $40,000 to $500,000 gross annual income.
Virtually every family I have interviewed has admitted to living at or above their income.
This translates to having no discretionary income and almost universally spending all income on consumer debt maintenance.
Few of these couples have any kind of retirement plan beyond a nominally preforming 401k and more than 75% of these couples have no will or revocable trust in place.
This phenomenon was the focus of a Forbes Magazine article in early 2013. I quote, “we are on the precipice of the greatest retirement crisis in the history of the world. In the decades to come, we will witness millions of elderly Americans, the Baby Boomers and others, slipping into poverty. Too frail to work, too poor to retire will become the ‘new normal’ for many elderly Americans. ”
The author goes on to say:
Corporate America and the financial wizards behind the past three decades of so called retirement innovations, most notably titans of the pension benefits consulting and mutual fund 401(k) industries, are downplaying just how bad things are already and how much worse they are going to get.
Americans today are aware that corporate pensions have been virtually eliminated and that the few remaining private, as well as the nation’s public pensions, are in jeopardy. Even if you are among the lucky few that have a pension, you cannot rest assured that it will be there for all the years you’ll need it. Whether you know it or not, someone is busy trying to figure how to screw you out of your pension.
Americans also know the great 401k experiment of the past 30 years has been a disaster. It is now apparent that 401ks will not provide the retirement security promised to workers.
As a former mutual fund legal counsel, when I recall some of the outrageous sales materials the industry came up with to peddle funds to workers, particularly in the 1980s, it’s almost laughable—if the results weren’t so tragic.
The National Institute on Retirement Security published a report in June of last year entitled: The Retirement Savings Crisis: Is It Worse Than We Think?
Here are a few highlights:
1. Account ownership rates are closely correlated with income and wealth. More than 38 million working-age households (over 45%) do not own any retirement account assets, whether in a employer sponsored 401k type plan or an IRA.
2. The average working household has virtually no retirement savings external to employer sponsored programs.
3. The collective retirement savings gap among working households age 25-64 ranges from $6.8 to $14 trillion, depending on the financial measure. Based on recommended retirement account assets (retiring by age 67), 92 percent of working households do not meet targets.
What Do We Do About It?
First we have to change our thinking. The definition of insanity is to do the same thing over and over again–expecting different results. We are going to have to take charge of our own financial futures and begin thinking for ourselves. This is much harder than it reads on this page.
It was Adler who said that, “Anyone who has done any thinking, even a little bit, knows that it is painful. It is hard work, in fact the very hardest that human beings are ever called upon to do. It is fatiguing, not refreshing. If allowed to follow the path of least resistance, no one would ever think.”
Herein lies a primal cause of much of our financial dilemma.
Too many of us have voluntarily allowed others to do our financial thinking for us.
Our first step then in taking control of our financial thinking is to acknowledge that the retirement schemes that we have been taught in school and that permeate our culture and workplaces are misrepresentations as best — fraudulent and criminal at worst.
We find ourselves in this dilemma because we have forgotten our heritage and the principles that America was founded on.
The founders understood that financial standing impacts political standing.
To be free politically you have to be free financially.
To change our thinking we need a different kind of financial education. This is were my friend and fellow freedom fighter Stephen Palmer enters the picture.
Stephen Palmer is a New York Times, Wall Street Journal, USA Today, Business Week, and Amazon bestselling author of several books and hundreds of articles.
An avid entrepreneur and investor, Stephen has stunning insight into the laws of wealth and how to apply them at any level.
Because of his background and passion for freedom, Stephen has created a free online financial freedom education course entitled Financial Freedom 2.0: The Fastest & Safest Way to Escape the Rat Race.
If you want to change your financial thinking and establish your own family financial legacy, CLICK HERE.
Stephen’s free educational course consists of four thought-provoking and enlightening videos:
Video 1: What is Financial Freedom?
Can we make sound decisions if we do not have all the facts or our understanding is limited? Some people define financial freedom as, “being out of debt”, or “having all the money you need.” But those are not accurate definitions of financial freedom. Learn the technical definition of financial freedom that changes EVERYTHING about how you look at money.
Video 2: The Only 4 Ways To Become Financially Free
Learn the only four ways to escape the rat race (earned income or linear income), and the magic word of wealth creation. This concept alone will transform your thinking.
Video 3: The Traditional Plan That Stifles Financial Freedom
Learn why you can NEVER become financially free following the traditional “Nest Egg” accumulation plan. Learn the latest government statistics regarding retirement and why America is in retirement crisis.
Video 4: The Best Vehicle to Achieve Financial Freedom
Learn the fastest and safest ways to achieve financial freedom within 15 years. Even if you think this can’t help you, what about your children and grand children.
For every retiree who is doing well and is financially secure—three are not—that’s a 75% failure rate. This has direct to you and your children. But there are solutions.
This course will change the way you look at money, personal finances, and retirement forever. I strongly encourage you to take a few minutes and watch a couple of these free videos.
I mentioned in Part One that there can be no political autonomy without financial autonomy. I think the collapsing of American political autonomy is clear to the most casual observer, but what exactly is financial autonomy?
If I have a job and can pay my rent and have enough money for food until my next pay check – isn’t that being responsible? Aren’t I free to do as I please?
What Is Financial Autonomy?
Let’s take a minute and really drill down on this definition.
Financial refers to the monetary resources of a government, a company, an organization, or an individual; revenue.
Autonomy is of Greek origin and literally means “having one’s own laws;” self -governing or not being subject to outside control. It refers to a kind of independence or freedom known to few in America today.
The word “free” has Saxon and Hebraic roots.
In Webster’s 1828 Dictionary of the English Language, free is defined as, “being at liberty; not being under necessity or restraint; not enslaved; not in a state of vassalage or dependence.”
Since our language has the capacity to describe a certain state of being – that of financial Autonomy, I ask the question – Why are so few Americans financially free?
Why are so many of us, a pay check or two away financial disaster? America is the freest nation on earth…or is it?
We certainly have the freest system of government, the freest system of protection of rights, and a culture more free of a class system than any in the world –but if we voluntarily place ourselves under the control of another power, the freedom guaranteed by our system of government is meaningless.
If we structure our lives in such a way as to be constantly dependent or at the biding of institutions, what does it matter that our politically rights are intact–if we never use them.
One of the first indications of a dependent people is that they stop asking questions and challenging norms. To question and challenge (which was a virtue 100 years ago) established money and government systems was at the very heart of the American Revolution–just read the Declaration of Independence–it is right there in print. But today it is almost unpatriotic to not have your money in the bank or to insist on paying-off debt or being debt free.
Misery really does love company.
When debt is a normal part of daily life, when governments have debts that are impossible to pay-off, when businesses cannot survive without debt, when it is normal to carry an on-going (usually maxed out) credit card balance even for things such as clothes and food, that society is dependent on and indeed in vassalage to whomever is providing the money.
Speaking of government or other powers, Alexis de Tocqueville said:
Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild.
It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing.
For their happiness such a government [or bank] willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?
Financial Autonomy then can be defined as the ability to fund your life by-way of private business or investment, without dependence on governmental subsidy or corporate salary. This does not mean being rich, but it does mean living within one’s means, or having achieved enough monthly residual income from private sources to meet monthly expenses independent of any outside influence.
Financial Autonomy means avoiding the trap of Clason’s Law – always living right at or above your income. By the way, if you have little or no savings (60% of Americans have less that $25,000 saved for retirement) or lack a solid retirement plan (minimum of $1.5 M) or if you have a long-standing credit card balance–you are living Clason’s Law.
Technically, if you hold a balance on a mortgage or are making payments on a car or a boat, you are in the clutches of Clason’s Law.
Being independent means just that—being dependent on no one or institution.
So if I have a job, am I independent or not?
I have heard this question a hundred times, “Well if I don’t have a job, how will I get money?” Therein lies the problem.
Remember, we fought a war over this very issue 239 years ago, renewed the concept during the American Civil War, and again we revitalized the idea during WWII and the subsequent Cold War. (By, the 1990’s our wars were not being fought for independence but rather, they were wars fought to maintain the very institutions predicted by Tocqueville above).
In fact, the pre-American and American civilization and culture of the 1700’s and the 1800’s and into the first quarter of the 20th century were in complete abhorrence to Clason’s Law. The first credit card was not available until 1952 and consumer credit was seen as a very bad idea until the 1980’s. Americans lived a comparatively lower standard of living during this time, but American 18th, 19th, and early 20th century quality of life and psyche of liberty were much higher than today and very much in tune with our definition of Financial Autonomy.
Part three coming soon….