The concept of “financial confidence” is very different from “financial freedom”. The second one
is widely known in the world of business, and most people seem to pursue that as a goal in life.
Financial freedom, in basic terms, is having a surplus amount of money.
It means to have enough income to be able to live your desired lifestyle
and live free from a set monthly salary that could limit you from doing what you enjoy in life.
Financial freedom makes sense; it’s great to have it as a goal.
But something that is just as important and isn’t talked about is financial confidence.
The difference between the two is fairly simple, and we briefly talked about it in a previous
video, without going into details. Financial freedom is based on the amount of money you have
available or the amount of money that you receive periodically. For example, if you have 5 million
dollars in your bank account, you’re very probably financially free. But you’re also free
if you don’t have that money and you have instead a predictable source of income,
like a 5, 6 or 7 figure income monthly. Financial confidence is different because it
isn’t based on what you necessarily have right now but on your skills. To be specific, the
“confidence” stands for your personal confidence in being able to generate money from nothing.
If you really think about it, this might be even more important than financial freedom. Here’s why.
Financial Freedom VS Financial Confidence
To illustrate this point, I'm going to make a comparison between two people, William and Sarah.
So, here’s the story of William. He’s a university graduate,
and after he got his degree, he started working in a very busy office in a very big corporation.
He was just a small piece in a huge machine, and his job was repetitive and boring. He
wanted to get out of the rat race, so he started looking for ways to become wealthy,
after just two years of working for that company. He researched the internet very well,
and he came across an investment guru type of guy. He was teaching people how to invest and all that,
but his main thing was taking money from his followers, investing for them, and then giving
back a decent percentage of the profits. William decided that it was a good idea to
invest with that guy. In the end, all he needed to do was give him his money and then waited for
the profit to come back in a few weeks. And he actually got lucky. In less than a month,
the guy invested in some real estate things that William doesn’t even understand, and he returned
the percentage to William, which went from 10 thousand dollars in the bank to half a million.
So he quits his job, he moves to a new state, and he starts a new life.
He actually lost control over his spending, and just eight months later, at the mall,
his card was declined for the first time. He was broke, he ran out of money completely.
He was obviously desperate. He was living in a rental apartment, he was supposed to pay $3,000
on rent every month, plus the payment on his Ferrari wasn’t yet completed, and many other
expenses started to pile up. William got into so much debt until he had to declare bankruptcy.
Then we've got Sarah. Sarah was also a graduate, and she initially had a similar job to what
William had. She wants to move on and make more money, so she starts looking for online courses
on investing. In the course of six months, she learns everything that she needs to know about
investing in the stock market, and she starts a diversified investment with all of her savings.
After five years, Sarah has a decent 7 figure income. But, she gets distracted,
and some stocks underperform. After a bunch of bad decisions, she loses almost all of her money.
However, since she has the knowledge, she makes it all back in the following years.
So, financial confidence might take longer to develop (and you’ll make mistakes along the way),
but that’s the only way to go if you don’t want to constantly risk it all. Now, what’s your choice?
Do you want to be a William, and constantly worry that you’ll lose your money, or do you want to be
a Sarah, and be confident that no matter what happens, you know how to make that money back.
Good, then here’s how you can start working towards being financially confident.
How To Become Financially Confident
Step Number 1: Get Clarity and Set Some Goals If you’re trying to become financially confident,
I’m pretty sure you aren’t trying to do that just to make a couple of thousand dollars per month.
Odds are you already have a regular job, and you’re looking for an upgrade, that will be, first
of all, more rewarding, and then more fulfilling. If you’ve been following us for a while,
you already know the importance of clarity. Having the outcome well defined and being 100% sure of
what is to be accomplished is fundamental in order to ensure success. You can’t achieve
success if you don’t even know what you want. So, for clarity, you first need to define what
your financial confidence looks like when paired to your ideal realistic lifestyle.
So, here’s what I want you to do. I want you to create a long list of exactly what
you want in your life, five years from now. You can be audacious, but still, try to be realistic.
First of all, choose if you want to rent a home or to buy one. Then, do some research, and choose
an ideal home in an ideal town and calculate the initial downpayment and monthly costs.
Then calculate all other monthly expenses, starting with basic needs and necessities
(like electricity bill, phone bill, etc). Add all that up, and you’ll obtain
your yearly expenses. This number belongs entirely to you, and if you’ve been realistic,
it won’t even be that big. It might be 6 figures, maybe 7, and sometimes 8.
However, do your best to actually estimate every single thing, in order to get a decent
perspective on how much you need to make in order to live your desired lifestyle.
Step Number 2: Fix Your Mindset
Before we talk business, I want you to know that you won’t achieve financial confidence,
and maybe not even financial freedom, if you don’t have the right mindset. I cannot stress enough
how important this is for you to succeed. We made countless videos on the topic,
but here are the main things you should fix if you need a mentality check.
1. Fix Your Discipline The road to success is full of obstacles,
and if you want to overcome them, you need discipline, and the reason is very simple.
Discipline is defined as; to train oneself to do something in a controlled and habitual way. In
this case, let’s define it in a more specific way. Discipline, when it comes to success, means doing
what is necessary to succeed in the long term, even if it means sacrificing short-term pleasure.
In other words, you have to work and get important tasks done even when you don’t feel like it. In
order to become more disciplined, I suggest you should start by waking up at the same time every
single day and having a morning ritual. The morning ritual will help you wake up in the
first place, and if you do it for more than two weeks, it will become a habit, and you won’t
even think about it. The clarity, energy, and motivation that this will give you are priceless.
2. Exercise Your Willpower Willpower is what stops
most people from doing what they should. There is a scarcity of it,
and most people procrastinate because of the lack of this very important ingredient.
Fortunately, you can exercise it. It’s like a muscle: if you train it, it will become stronger.
To train it, you have to start small. So, first of all, fight that tendency
of yours of checking social media as soon as you wake up. For 2 hours every morning,
you can’t touch your phone, unless it’s an emergency. Then, another good exercise is
taking cold showers. It takes decent willpower to go under the ice-cold water, but it’s worth
it. It has countless physical and psychological benefits, and you will train your willpower.
3. Get Rid Of Your Scarcity Mindset The “poor mindset”, as it is often referred to,
is the one that most parents teach to their kids. For example, people might say “money isn’t
important”: that’s a scarcity mindset. All the traits of poor people that are linked to money,
finance, politics, and economy are part of the mindset that you should avoid.
Most of us have that mindset installed in our brain,
the goal is to slowly get rid of it and install a new one. Watch our videos for help with this.
And finally.
4. Kill Unhealthy Habits & Install New Ones I know that your vegetarian friend always
says this in an annoying way, but it is true: a healthy body is a healthy mind.
Has this ever happened to you? You’re doing something productive,
and you decide to take a break, so you go eat a slice or two of pizza, drink some beer,
and expect to get back to work. But well, you never did, because you felt lethargic and tired.
These negative habits must be eliminated, like smoking, over-using social media,
drinking often, and the many other vices. In order to install new habits (for example,
working out every single day), there’s a rule that is true for most people.
You have to do that thing that you’re trying to turn into a habit for 14 days,
and then it’s installed. After that, it will take 90 days of exercising the same habit
to make it into a lifestyle. This is actually backed up by science.
Step Number 3: Pick Your Industry Now you’re ready to get into the
business stuff. You need to decide how you want to get financially confident,
and what business you want to be in. Developing a very generic skill won’t make you financially
confident because it won’t make you a money maker. Being a moneymaker means generating money out of
nowhere whenever you want to. The more specific you are in choosing your industry and your niche,
the better the results. The industry is totally up to you, but you do have to do some research. First
of all, you need to decide if you want to provide B2B or B2C services. The difference is simple:
B2B stands for business-to-business, so you’re basically providing products or services to other
businesses. B2C stands for business-to-consumer, so you’re selling to regular people. An example of
some B2C business models is selling groceries, big box stores, health & beauty products, and more.
Then you want to focus on the specific product or service that you want to provide. Here’s a rule
that you should always remember: “price is never an issue when you’re providing a lot of value”.
In other words, if people will tell you that your price is too high for what you’re trying to sell,
that product probably isn’t valuable enough. My suggestion is to get in the B2B niche
and provide services, not products. This is the best way to become financially confident.
Ideally, you want to pick a valuable skill that is and will be in high demand,
and that you can’t see being replaced by an AI.
We made a video on one of these skills, the link is in the description.
And that’s it. From there, your goal is to develop that skill and to offer it to the market.
Choosing an industry, especially during the COVID19, and then also choosing a specific
service or product to work on might be difficult. Let us know in the comments if you’d like a video
on how to choose an industry and a niche. Also, remember to hit that subscribe button
right now in order to stay up to date on our valuable uploads. We always provide
value in our videos, you don’t wanna miss out. And that’s it for today. Thank you for watching,
have a great day, and I'll see you in the next one.