Avoiding the Four Blind Spots on Your Road to Financial Independence
It’s happened to us all. There we are driving down the road, about to make a lane change. We check the rear-view mirror; look over our shoulder, signal, and start to move. Suddenly, a loud horn honks, and we quickly swerve back into our lane, narrowly missing an accident. It never dawned on us that there just might be a car in our blind spot.
It is close calls like this when we would be much better off knowing all that we can – knowing what is in our blind spot.
This is true, not only on the road we drive, but also on the road to financial independence. No one is immune to blind spots. They are all around, preventing us from getting where we want to go.
But, just how do you know what’s in your blind spot without help?
Simply put: you don’t. That’s where My Financial Independence Coach comes in. Our financial education, tools, and live coaches can guide you through and around the blind spots, keep you on the right track, and help you avoid the blind spots that creep up along the way.
In our quest to transform the lives of ONE MILLION people, our research has helped us identify four common “blind spots” that everyone falls into on the road to financial independence.
“Blind Spot” #1 – Lack of a Plan
It is said that failing to plan is the equivalent to planning to fail! A plan is like a road map to get you from where you are today to where you want to go. A well-defined plan provides the clarity and direction needed to achieve your goals.
But if having a plan is so important, why do so few people take the time to develop a plan? Without a plan, how will you know if you’ve achieved success?
We live our life at such a fast pace, it is difficult to dedicate the uninterrupted time to develop a clear plan. And when we finally do, many people simply do not know where to start.
What areas of our life need a plan?
The answer: EVERY AREA.
“Blind Spot #2 – Lack of Fiscal Literacy
Did you know that the average person spends $1.22 for every $1.00 earned? That is a negative savings rate!
The average credit card debt is $10,000. The average person close to retirement has only $60,000 in a 401(k). Furthermore, one-third of Americans put off retirement because they don’t think they are in a position to retire. Of those who do retire, 90% of Americans don’t feel financially independent.
And, despite all of this, only 10% of Americans are working with a financial advisor.
These statistics are alarming and lead us to believe that many people just don’t understand how money really works. This lack of fiscal literacy is the second blind spot on the road to financial independence.
In his book, Rich Dad, Poor Dad, Robert Kiyosaki, says the rich don’t work for money...money works for them. The middle class and poor work for money. Many of us don’t understand this. Why?
We don’t understand, because it’s not how we were taught. Often times the reason we manage our money the way we do, is because it’s how we were taught (or not taught) by our parents and grandparents.
Schools do not typically teach us, or our children, how to handle money and make smart financial decisions. Growing up, we do not learn the importance of saving, investing, budgeting, etc. As students head off to college, they are ill-prepared for the dangers of “easy money” with credit cards, and have not thought ahead to living a life saddled with exorbitant student loan debt.
Decades ago, mortgages were something to avoid at all costs, and paid back as quickly as possible, and nobody would have predicted the dramatic increase in paying for a college education.
The rules of money and opportunities have changed. Pensions and social security are no longer as reliable, and today even mortgages, when managed properly, are being used strategically to maximize tax benefits, manage cash-flow, and asset accumulation.
The good news is, the sooner we learn about the “four financial blind spots” and how to avoid them, the more time, and opportunity, we will have to achieve our financial goals. And, we'll do this with fewer “financial accidents” along the way. Understanding money and how to make it work for us is the key.
Blind Spot #3 – Storing Money in Inefficient Places
Because we don’t fully understand how money works, we often end up storing it in the wrong places. As money flows into the household, families are not educated on how to prioritize where their hard-earned money should go. Pre-pay debt or invest? Save for college or pay down the mortgage? Pay off a credit card or create an Emergency Fund?
In most cases, people make enough money to do what they want to do in life. Unfortunately the mistakes happen once it gets into your checking account!
As you spend, pay down debt, and hopefully save some of your money, the first two blind spots – Lack of a Plan and Lack of Fiscal Literacy – become your greatest enemy.
If you haven’t taken the time to develop a plan and set goals, you get to the end of the month and wonder where the money all went!
When deciding whether to save some money or pay down your mortgage, many people have never taken the time to learn how to objectively analyze their investment decision.
Will the money be liquid, or easy to get to if needed? How safe will it be? What is the rate of return by investing or paying down this debt? What tax advantages do I get?
Blind Spot #4 – Lack of a Wealth Team
Who do you have in your life to help you make important money decisions every month or every year?
We need a solid team around us to help recognize our blind spots. Unfortunately only a small percentage of people work with a financial advisor.
Even fewer know how to put a complete Wealth Team as a support network. This lack of fiscal coaches is the fourth blind spot on the road to financial independence.
Why do you need a team? No single individual is able to effectively coach, manage, and teach all of the sophisticated financial, tax, legal and investment strategies.
A financial advisor is not an expert on the mortgage market and products, while a real estate expert cannot guide you on saving for your children’s college education.
Having a team of fiscal coaches, each specializing in an important area of your personal finances, can help recognize and guide us through the blind spots.
Imagine you are driving in a car and you have a helicopter flying above you spotting your route to help you safely navigate the road around sharp curves and away from potholes.
Who’s on your team? When choosing a team, it’s crucial to realize the difference between gifted salespeople and those professionals who are strategists, always putting your interests first. The better, more trustworthy your Wealth Team is, the more successful your financial future will be.
How does My Financial Independence Coach help you?
As a member of My Financial Independence Coach, you will learn in how to avoid the 4 financial blind spots and develop your own personal path to financial independence.
With our tools, resources and coaches, you will:
- Develop a plan for your money and your life
- Increase your fiscal literacy to make smarter decisions with your money
- Prioritize your cash flow to ensure it is stored in the most efficient places
- Learn who should be on your personal Wealth Team, and how to connect with the right professionals when you need them
- Gain access to personal coaches to provide the clarity, direction, and accountability you need to stay on the right path
More than anything, as a valued Member of MFIC you will enjoy a new partner to support you and encourage you as you pursue your financial goals and dreams!
Welcome to My Financial Independence Coach, your online financial education center. Enroll today and invite a friend!