There are 3 big areas that we’d like to improve in.
The big three (not in order of importance) are:
2. Health (including fitness, weight etc)
3. Relationships (partner, family, friends)
The focus of this site may be wealth. But I’ll let you into a secret. The attitudes that help you build wealth also work in health and relationships.
There are great similarities in how to develop the Big 3 areas. You can’t just buy any of them…you have to do the work. All require some knowledge and a lot of effort to achieve great results. Luck certainly helps but you need to start by taking responsibility for your own results in all three areas.
Your success in each of the Big 3 areas can be held back by limiting beliefs. A limiting belief is something that you believe about yourself and the world that is not true. But the fact that you think it is holds you back from trying and succeeding.
The idea that failure is something scary and to be avoided is common. But if you believe that, you’ll avoid trying things that are hard. And most of the good stuff in life comes from doing things that are hard.
Sports stars are interesting here because they have to deal with failing…and in public. For example, what if Muhammed Ali had a limiting belief that he was not good enough or that failure was a terrifying prospect? Would he have ever become a boxer? Would he have kept up his training regime? Would he have kept taking on stronger opponents in bigger fights? Probably not.
Yes, Ali was physically gifted but perhaps no more so than his opponents. What he had was optimism, a mindset that set the bar high and a lack of limiting beliefs. If you doubt that…take a look at the clip below.
At this point, you may be thinking….hhmmm, those limiting belief things sound like bad news…..I’m sure glad I don’t have any of those!
But the thing about limiting beliefs is that we’re too close to see them. In the same way that a fish doesn’t see water: it just forms the prism through which it sees the world. Similarly we don’t see our own limiting beliefs. So we may not be aware of how they skew our view of the world.
Limiting beliefs are absorbed from parents, teachers, friends, TV presenters or newsreaders or whoever we looked up to whilst growing up. Often these people never even told us the limiting belief explicitly, we simply assumed the belief based on their example.
For example, limiting beliefs that we may unwittingly absorb include:
- Financial independence is only for celebrities, CEOs and hedge fund managers
- I can’t expect to be fit after my 30s
- You can’t teach an old dog new tricks
- You need to be an inventor or tech genius to be an entrepreneur
It turns out that these are bullshit. Since I quit work, I’ve unpicked some of the mental blindspots that I’d picked up over the years. These limiting beliefs were reinforced by fear…in particular a fear of failure.
This is ironic as it turns out that there is no such thing as failure when it comes to financial independence. As Yoda might have said:
There is no failure. There is only learning and growing
At this point, some of the more hard-bitten and cynical readers may be feeling queasy. It always amuses me when I meet one of my former colleagues and they say something like:
Love the blog….especially the gags and the investing…but why do you have to include the woo-woo stuff about motivation, positivity and Feng Shui?
Firstly, there’s no Feng Shui on this blog. Secondly, its funny when I hear this from people who earned more than I did…and yet are still riding the cattle trucks into work everyday while their precious time on this planet ebbs away.
Fear of failure is a problem because it stops people from even trying. There are many uncertainties on The Path to getting rich, but here is one certainty. If you do not start, you will not finish. You can’t win if you don’t play.
The ice-hockey star Wayne Gretzky put it this way:
You miss one hundred percent of the shots that you don’t take.
Getting to FI may not be easy, but it is simple. At a 50% savings rate you will achieve it in about 19 years. At 66% it takes 12 years. And the prize is huge…if you are reading this blog, its probably because you are smart and you get that.
Success in financial independence means having enough saved and invested…and enough courage to make the leap and quit a job you don’t love. So success can be defined but what about failure?
You could think of failure as just The Universe telling you to try a little bit harder or experiment with something new. Failure is not a permanent state, its temporary.
And success or failure is not binary. Pursuing FI is not like jumping from one side of a chasm to the other. If you fall a bit short initially, its no big deal…you do not plunge to your death, you can just work a bit more or spend a bit less.
And you get to choose. Imagine you spend 10 years pursuing financial independence and building your stash but you then decide that all that wealth, personal growth and inner peace are not for you. Perhaps you watch an old episode of Miami Vice and are overcome with the urge to pimp up your lifestyle with a Ferrari or speedboat, some linen suits and espadrilles. And a parrot.
No problem. The decision to pursue financial independence is always reversible. The great thing about pursuing FI is that you still have the money and the option to piss it away!
If you did that, what would have happened? Whereas before you were a non financially independent person, now you are a non financially independent person but with a Ferrari, some 1980s clothes and a parrot. This is not failure because you’re no worse off than before.
The truth is that you won’t do that. During the 10 years you’ll have learned that spending does not equal happiness and that saving is not deprivation. As a bonus, you will also have extra skills, resilience and options.
Sadly, due to a powerful and mysterious force called “reality”, the reverse does not apply. So if you spend the 10 years spending like Paris Hilton, at the end of the 10 years there is unfortunately no option to change your mind and get all the money back with interest.
So the pay-offs to a decision to pursue financial independence are:
- Scenario A: Success. Financial independence achieved. Freedom, no money worries. Happy days.
- Scenario B: You decide financial independence is not for you. You have extra money (plus interest) which you are free to spend.
This is an asymmetric pay-off. The potential upside from achieving Scenario A is huge The potential downside from experiencing scenario B is minimal / non-existent. Despite this, I’ve been racking my brains to think of a FI-seeking scenario that could be described as failure.
What about if along the way, we occasionally lapse into ridiculous spending? I’ve done that many times and that is not failure.
What about if someone started investing in shares and then, during a market crash panicked and sold out at the bottom. Couldn’t that be described as failure? Well maybe in the short term, yes. But this was what happened to me in 2003 (see A tale of 2 Bear Markets) and, as it turned out, was that experience that made me a battle hardened equity investor and set me up for the 2008/09 bear market. No failure, only learning and growing.
What if you get to FI but are bored without your old job? Negotiate a 3m period of unpaid leave and see how you enjoy the time off as a FI trial. Quit on good terms with your boss. If you want to go back later, that’s fine…no failure.
But what about that favourite FI bogeyman of the unsafe withdrawal rate? Wouldn’t it count as failure if my portfolio income fell short, I couldn’t reduce my spending enough and so ended up having to get another job?
I don’t think so and here’s why. If I had to get another job, it would be very different from the last one. These days, a good job in my book is either local or can be done (mostly) from home, it is flexible, it involves working with decent people that appreciate what you do for them.
True, it would not be easy for me to reproduce the earnings I used to get from the Prison Camp with a local job or starting a business. But I wouldn’t need those sort of earnings to supplement my existing stash.
Because interest rates are so low, having an income of say £10,000 from a part time job / mini-business would actually allow most early retirees to fill a huge gap in their retirement stash. Remember that with low interest rates, earnings are more valuable than ever. Earned income of £10,000 per year is equivalent to having £1m of cash sat in the bank at an interest rate of 1%.
If push came to shove, I’d back myself to get a job paying £10,000 or more. Last time I looked, Tesco were hiring. I don’t think its going to come to that…but if that’s what it took, then so be it. I would not consider that as failure. I’d still have tasted freedom and had the chance to spend time with my children, get my shit together and achieve things that I previously thought impossible.
Like I said, there is no failure. There is only learning and growing.
p.s. still worried about failure?…I recently did a podcast interview about what we can learn from failure…which you can listen to here: