Only you can Financially Liberate Yourself

The process of making lasting, positive financial changes can bring about a tremendous amount of personal growth, not only in terms of your wallet but also in terms of how you live your life. It is both liberating and challenging, and takes an emotional investment to achieve. In reality, there are no magic bullets (get rich quick schemes almost never work), and substantial financial changes rarely come without sacrificing time and energy, or making alterations to relationships you may cherish. But with a good plan and the will to act on it, almost anyone can achieve Financial Freedom.

Change is the opposite of “more of the same”. Therefore, financial rewards need to be both meaningful and effective at reinforcing positive behaviours around money. One needs to be committed to the change for the difference to last, and be willing to break old habits – not just with money, but with thought and social habits as well! It means spending more time in environments that are conducive to your financial well-being, and less time in social and physical settings that work against it. Finance is a technology that involves managing your assets and liabilities, and these things are more (far more) than monetary in nature!

While understanding how you think about money lays the foundation for making substantial changes to your financial picture, proper preparation is essential. The good news is that once you have a good understanding of what Financial Freedom really is, and you have completed your due diligence, making financial changes will not only be far easier, they will be far more likely to last. And they are often very enjoyable, though not always pleasant, to make.

Financial Liberation is the Process, Financial Freedom is the Goal

One of the main reasons people seek Financial Freedom is to be liberated socially. They may want better quality things, a secure retirement, more freedom to do what they enjoy, or money to raise a family, for example. It feels great when we have the wealth to achieve our dreams. Yet even when we don’t, it is easy enough to pretend to be socially liberated when it comes to money: Money Monks and Emotional Spenders do it all the time! But authentic liberation involves winning at the Money Game for real, and people can eventually tell if you’re faking it. Financial Freedom also has to be authentic to be robust and socially liberating.

One of the most common, and most effective, activities for achieving social liberation around money is to form (or join) a group where members engage in discussions about investing. Sadly, many people learn at a young age not to discuss their finances with others. The problem with avoiding informed discussions is it severely limits one’s ability to learn the techniques, skills, risks and rewards of managing money. It pays off to avoid exposure the blame, denial, and delusion about money that comes from people who are ill-informed, and spend time communicating with people who are informed.

Fortunately, there are clubs and organizations in nearly every city in the world where people come together to learn about investing. There is even a thoroughly researched, developed, and tested template that you can use to create such a group for yourself, for free, in the Sublimelime Reference Guide. Feel free to have a look. If you decide to start such a group, you are invited to contact us here so we can keep you in the information loop. Our online community also provides support for leaders who start groups based on the template.

To be able to liberate yourself, you need to be aware of your available options. If you followed the instructions in the last article, you already know plenty about yourself when it comes to money. Now you need to list your choices; engage in a learning plan to discover how to make better financial decisions; resist the pressures in your life to keep things the same; and discover new options for increasing your income and eliminating bad debt. This involves doing due diligence on anyone you might invest with or approach for help. It pays to make a list of the people who are supportive of your financial well-being, in addition to people whom you find financially inspiring, as your starting point.

The narrative we carry in our heads, the stories we tell people about ourselves, are very important to us as individuals. They can also be valuable because through knowing how another person’s story unfolds, we can gain insights into the world of finance. When we hear or read financial success stories, we identify with the feelings of liberation and accomplishment experienced by others. By welcoming the influence of people who have achieved authentic Financial Freedom, the experience becomes easier for us to have as well. A good mentor can be priceless. And by reading (or watching) the biographies of successful people, we can gain insights into what can be done to be as successful as them.

Sometimes, questions of morality arise when it comes to money. The question of whose side you are on can be very perplexing. Are you with the good guys or the bad guys? In desperate times, it is natural to consider changing sides. The problem with this way of thinking is that it confines one to a financial power struggle, or even worse: complete paralysis. The only real way to get your money to work for you is to invest it wisely. You will naturally prevent yourself from taking action on your financial plan if you associate wealth with being a bad guy. But by connecting with other people who are also trying to make their money grow, you will see that good guys succeed financially, too. It pays to keep in mind that authentic Financial Freedom is more like farming than hunting because successful investors live off of the fruits of their investments.

Keep Leveraging the Power of Your Emotions

One way people get stuck is by trying to absolutely certain before doing something. This is true when it comes to relationships, health matters, and finances. But the fact is, you can never be absolutely certain about any financial decision. The best you can hope for is a high degree of confidence that you are making the best possible decision you can given the information available to you and the circumstances you are in at the time. Peter Drucker, the famed business professor from NYU, called it “analysis paralysis” when a person fails to make a decision in time because he or she is too busy collecting and sifting through data. Substituting worry for work like this can be a major impediment to achieving Financial Freedom because money cannot grow until it gets invested.

The elusive magic moment is also largely a myth in the financial world. Yes, market timing is important, but you can’t grow wealth by sitting on the sidelines. You have to participate in the market for your money to grow and produce income. Waiting for just the right time make changes to your financial picture is like praying for rain when you could just turn on a sprinkler and water the lawn yourself. The best time to start investing is almost always now. No amount of wishful thinking will make it otherwise. If you keep on handling your money in the same way that you always have, you will continue to produce the same results. And while it inevitably takes effort to change your financial picture, it all depends on how important these financial changes are to you. The only way your financial hopes can be justified is to be active and realistic about growing your money.

This does not mean you should take premature action, however. It simply means that you should not spend too much time contemplating. Unlike in school, in the world of money mistakes are assets if you learn from them. They are only expenses if you don’t take the time to consider the feedback you get from them. A good example of premature action-taking is the typical New Year’s resolution: will it actually last? A good example of Ready, Fire, Aim action-taking is an experimental approach to investing by researching different options and trying out more than one, then comparing to see which produced the more desirable results.

One way I’ve found to get excited enough to move past the pondering and planning stages is to watch movies, television shows, or theatrical productions where people are doing what I’m thinking about doing. There’s something about seeing a story unfold that leads me to want to act sooner rather than later on my plans. I find it easier to stop trying to perfect my plan and start adjusting it as I go along once I’ve had the emotional arousal of watching someone else do it, even if they are only fictional.

Something else that has been very effective for me, personally, is to hang aphorisms and affirmations on my wall. I see them often and they stimulate me to think about what I really want in life. I use them to help me focus on following through and on having the best possible mindset for accomplishing my goals. Admittedly, I sometimes find them distressing to look at. But that’s good because the goal is to raise my emotions enough to kick-start me into action, rather than getting bogged down in analysis paralysis.

Try this: Fast-forward 5 years. In one universe, you made the changes to your financial picture you’ve been planning to make. In another universe, you made your plans but forgot about them. Which outcome would you prefer? Which one feels worse and which one feels better? The more you can imagine the consequences of not changing your financial picture, the more likely you are to make the changes you want. Do this often, because the more you do it the more you will take steps to ensure the better of the two possible futures comes about.

Improve Your Financial Self-Esteem

Is it rational to keep managing your finances in the same way? Can you honestly say that you are a responsible person if you continue to repeat mistakes with your money? What will happen to your self-esteem if you make the changes you have in mind? Can you truly be the person you want to be if you don’t make these changes? As you make changes to your financial picture, you will continue to re-evaluate yourself in relation to money. Your financial goals need to be good for your self-esteem in the long run if you truly want to obtain Financial Freedom.

One’s present situation, and how one responds to it, is where the opportunity lies to re-evaluate oneself financially. The key is to allow the negative aspects of your current financial picture to push you towards creating the positive aspects of the picture you have in mind for your finances in the future. But don’t let this push become extreme! If you find yourself in a deep, negative rut it is best to stop and focus on the positive until you see it balancing out. However, if you become overly optimistic about the future, past-negatives can come back to haunt you with creeping fears and insecurities. As with many other things in life, the middle path (meaning balance) is essential. Focus on the positive until you are moderately optimistic about the future, and leave it at that. Anything more, and you risk pushing yourself backwards. Anything less and you are being unrealistic about your potential by under-estimating it.

The importance of thinking before acting financially should not be understated. Now that you are moving into action, don’t second guess yourself – just check that relevant variables haven’t changed too much before you take each step. This is important because every plan needs adjustments from time to time. Taking a moment to pause before each step gives you a chance to verify you are on track, handle the unexpected, and do what’s best for your well-being.

As you take each step, you will incrementally develop a new image of yourself in relation to money. If you followed the process covered in this series of articles, it will be a more positive and healthy one. It also helps to keep in mind that the images of financially successful people you see on TV and in the movies tend to highly inaccurate. In the Millionaire Next Door, Thomas J. Stanley presents research that shows the typical millionaire looks a lot like everyone else. For example, most self-made millionaires are more likely to drink beer rather than champagne and live in fairly modest homes. It turns out that most of the trappings of wealth offer no reliable indication of financial success whatsoever! His research shows that honesty and quiet self confidence around financial matters will take you much farther down the path to Financial Freedom than being surrounded by expensive toys and wearing nice clothes. In fact, Dr. Stanley’s research shows that conspicuously-displayed trappings of wealth (like expensive jewellery and cars) are better indicators of financial desperation than financial success! Reliability, hard work, and an enterprising mentality are much more reliable indicators.

Your self-esteem ultimately depends on the decisions you make for yourself, and your follow-through when it comes to implementing them. As you learn from your mistakes and go on to make improvements in your decision-making skills, your financial self-esteem will go up. In the long run, your resourcefulness is what gives you self-esteem about anything. This is especially true about money.

Strengthen Your Financial Willpower

Recall from the last article the segment on getting to know yourself better financially. Your answers to the fourth question (comparing Money Mindsets) also reveals something very important about your commitment to making changes to your financial picture: How sensitive are you to acting from a new Money Mindset? To successfully improve your financial situation you must not only be willing to do whatever is necessary, you must also believe in your ability to make lasting changes. Ultimately, your level of commitment depends primarily on how deeply you want your plan to succeed, as well as how strongly you believe in it.

Sometimes, you will have plenty of good information for moving forward and putting your plans into action. There are laws, regulations, and ethics that are meant to help protect consumers and investors but it is very rare to find anyone has all the information. In fact, the ability to gather sufficient accurate and pertinent information is one of the most valuable skills a person can have financially. In practice, there is almost always some ambiguity, some missing bit of data, that would help you to make a better decision. The question is, is it practical or even feasible to acquire the information before a decision needs to be made? The key financial skill when it comes to information-gathering is gathering sufficient data from reliable sources to make reasonably confident decisions.

It is normal to experience some anxiety or discomfort when you set out to do something new with regards to money. You may have seen other people doing the exact same thing, heard stories of people who took it to the next level, and even visualized yourself doing it. Even when you know for a fact it can be done, oftentimes it can feel like you’ve paused just a little too long at the edge of the diving board and now it’s harder to jump. Anxiety seems to provide an endless stream of excuses to help a person avoid financial woes, rather than deal with them. It’s important to overcome anxieties when making financial decisions in order to be sufficiently committed to acting on financial plans.

Ultimately, you must be motivated from within to make lasting financial changes. There are five keys to getting past anxiety and gathering relevant missing information related to money:

Make each step a step you can handle. Big steps can be broken down into small steps, and small steps can be combined into bigger ones. It pays to keep in mind that when it comes to money, there is almost always something you can do to improve your situation. The key is to adjust the size of the steps you take in order to test your courage so that your confidence grows.

Target specific dates so that you know when your financial picture will improve. If you find that you need to change a date, it’s most likely because you haven’t got the information you need. In this case, go and get the information you need and set a new date. Sometimes, there are circumstances beyond your control that will force you to change a date. The key is to make yourself less subject to things beyond your control when it comes to your finances.

Don’t just let supportive people in on your financial plans, promise them something tangible or measurable. Which are you more likely to deliver on, a promise or a goal? When someone who cares about you expects you to deliver something money-related they can touch or measure , there will be a significant difference in your level of motivation.

Throw yourself into it. You want improvements to your money situation to be real, so be willing to adopt new ways of thinking that will help you and to let go of things and people that hold you back. Expect your mood, your relationships, your performance at work, and many other (sometimes unexpected) areas of your life to change as well. Often, seemingly unrelated changes are necessary before you can improve your financial picture. And often they will benefit you in many ways, not just financially.

Spend 20 minutes a day reviewing, adjusting, and tweaking your financial plan. This includes learning more about finance. Because your plan belongs to you, you control it, and you have a choice whether to follow it, this is one of the most empowering practices you can take up. Questions will come up that you want answered, and details will get sorted out that will help you to be more prepared. If you own your plan, and make it specific, a detailed plan regularly reviewed will serve you well. An example of a good plan appears later in this article.

Ironically, one of the best ways a person can strengthen one’s financial willpower is to go backwards before going forwards. By increasing the degree to which one engages in bad habits around money, acts from the Money Mindset one wants to leave behind, and ignores one’s financial self-knowledge on purpose preceding a target date for making a change, one can create a much deeper desire to make the change. In the meantime, it’s important to also prepare for one’s new way of living for after the target date. On the target date, review what happened to see how bad your financial picture was becoming. Knowing this, really feeling it, can make a huge difference when it comes to following through on commitments around improving one’s financial picture.

Replace Poverty-Mindedness with Wealth-Mindedness

Have you ever wondered how you benefit from not improving your financial picture? There is almost always a secondary benefit for maintaining your current Money Mindset, and it tends to be a way of avoiding some form of stress. Of course, if your money habits cause you more stress, it can become a slippery slope akin to getting addicted to drugs. For example, a Present-Oriented Emotional Spender realizes that she won’t have enough to pay her rent, so she goes to the casino in the hopes of winning but loses what little money she has left. Or a Past-Oriented Employee remembers growing up poor, so he gets another job to provide extra money for his family and ends up never seeing his children. The way they sought to remedy their stresses, by trying to escape from them, actually reduced the amount of freedom they had in life!

People often make poor choices like these because they get too focused on their financial problems, rather than looking at their opportunities. The Emotional Spender would likely have been better off using the money she had left for a deposit on a more affordable place to live. The Employee (and his family) would likely have been better off choosing to spend more time doing free things with his kids. By making decisions that are more adept and using their energy to make life better in other ways, it becomes easier to make better financial decisions in the long run.

While it may seem counter-intuitive, the value of regular exercise when it comes to making changes of any sort (including financial) in a person’s life cannot be underestimated. Not only does it help to work out any tensions that one may be carrying, it also helps to speed up the processes of neurological change. When one adopts a new Money Mindset, one is literally reconfiguring the brain to think differently. This happens on a physical level because new connections between brain cells need to be made. Simply by taking 20 minutes a day to increase your heart rate, you will improve your self esteem in numerous ways; feel better about yourself and your choices; reduce the anxiety discussed earlier in this article; and feel less emotional pain. In other words, engaging in daily exercise makes changing your financial picture much, much easier. And you get healthier!

While adding exercise to your daily routine can make it easier to change your financial picture, improving the quality of your relaxation time has a complementary, amplifying effect. There is ample scientific evidence showing how the combination of exercise and healthier relaxation time is even more potent than either alone. “Relaxation” in this sense means “letting go”, “looking within”, and “releasing”. Not only does it increase your energy levels; reduce anxiety; and help you to sleep better, it also measurably increases the rate of alpha brain waves in your cerebral cortex. Alpha brain waves are associated with pleasure, alertness, and an internal locus of control. In other words, relaxing quietly in a comfortable and safe environment improves your brain’s ability to find pleasure in new ways of being and empowers you to heal faster and move forward in life. When you adopt a new Money Mindset, you are taking on a new way of being and thinking. Exercise and relaxation combine to make the change both easier and more powerful.

Everyone talks to themselves, unless they are in a coma. What is your self-talk like? Often, improving your self-talk is fundamental to changing your financial picture. If you are hard on yourself or others, it will make changing your financial picture much more difficult. If you delude yourself, blame others, or deny your circumstances and opportunities, you will inevitably have a difficult time improving your financial situation. This is why conspiracy theorists tend to be broke: they get so busy explaining how responsibility for their problems belongs to other people that no room remains in their heads for thoughts that can bring them legitimate wealth! If your self-talk makes you feel anxious, it’s time for you to change it. Negative (meaning “makes the experience of life worse”) self-talk is a kind of addiction because over time, it has the same affect on the brain as using hard drugs. Eventually, people can become so desensitised to it they simply cannot tell when they are being negative. Most negative self-talkers crossed this line early in life and have no idea that they are hurting themselves on an ongoing basis.

When your self-talk is absolutist, rigid, or closed to questioning, you are hurting yourself financially. It is important to be willing to question your beliefs and values around money and people, seek new and logical alternatives, and to let go of dogmatic or ideological thinking. Self-talk phrases like “I have to…”, “I need..”, or “I must…” are your cue to question the importance of what follows them. Denying your basic needs (air, sleep, food, bathroom breaks, etc.) is symptomatic of not questioning this kind of thinking. If your objective is to improve your financial situation and you keep coming up with things you absolutely have to do first, when will you get around to doing what it takes to make your financial life better? The key is to recognize that these are all desires, and therefore they can be let go. This brings us back to exercise and relaxation – both come in very handy when you’re trying to improve your self-talk. Letting go of desires that distract you from attaining Financial Freedom, and becoming flexible and adaptive in your self-talk, are essential parts of improving your financial well-being in the long run.

Sometimes, people don’t feel they have the right to grow financially. When you approach someone for financial advice, you have the right to be heard. Lousy brokers and advisors will try to tell you what to do without taking the time to get to know you. People learn by making mistakes, and you have every right to make them because financial improvements require learning to take place. The only person who has the right to judge your financial decisions is you, unless your decisions are harmful to others. It pays to be assertive about your financial goals and objectives, and nobody has the right to demand more than your limits. You cannot be expected to know everything; care more than you do; take responsibility for the thoughts and actions of others beyond the limits of your influence over them; or have more time to devote to your financial picture than anyone else can dedicate to theirs. If you accomplish your financial goals at the expense of others, you are not truly growing because you are trampling on people. But you can (and most financially successful people do) become Financially Free by granting everyone the same rights to do with money. The key is to assert your rights to pursue financial success; respect others’ rights to do the same; and be specific about what you want.

Increase Your Knowledge of the Playing Field

To feel truly liberated financially, you must have the power to manage your finances effectively while reaching goals that are suitable to you personally. Social pressures, norms, intentions, and obligations can offer clues to what liberation means to you. Financial Freedom is personally liberating in the most basic sense: It is much better to be a graduate of the Rat Race than to be stuck in the maze. The most reliable path to Financial Freedom can only be found when you are clear on your goals, as well as focused and active in your pursuit of them. Your plans are the roadmap, your actions are the journey.

To have control of your finances and to maintain your enthusiasm for improving your financial picture, it is important to set and achieve realistic goals. Here is an example of realistic goal-setting: I have credit cards. I pay interest on the debt accumulated on those cards. Interest is the rent paid on borrowed money, so I would like to liberate myself from paying that rent.

I am a Canadian, living in Canada. Just like in other countries, there are tax advantages to investing in local companies. I want to take advantage of this fact, so I choose to purchase Canadian Equities and Exchange Traded Funds in order to qualify. Since my credit card bills come monthly, I want monthly income from my investments to pay the rent on what I’ve borrowed. Therefore, having narrowed down what I’m looking for, I set off to research which Canadian Equities pay monthly dividends. My primary research includes looking for a list of the top monthly dividend-yielding stocks on the Toronto Stock Exchange, amongst other things.
Here’s where a lot of people run into trouble because of a basic fact about the nature of the Stock Market: Information arbitrage is the norm in the financial industry. Profits are often made by knowing things that other people don’t because it takes time and expertise to gather useful, relevant information about stocks and bonds. Due diligence is not given away for free. And nor should it be! Somebody had to work hard to put all the relevant information together.

There are two kinds of due diligence: the kind you do on yourself (explored in depth in the last article), and the kind you do on potential investments. The kind you do on yourself is an essential part of preparing to make a realistic plan because you will only complete the plans that motivate you. Fortunately, once you know yourself financially well enough, you’ll know what will feel right for you when it comes to investing your money.

On the other hand, the kind of due diligence you do on potential investments is subject to the availability of information. You may have a pretty good picture of who you are, but how about what’s out there, in the marketplace? What opportunities are available to you? It turns out that research papers and aggregate information are typically sold to people, while information from specific companies is typically provided for free. Aggregate information has value to investors because it is an essential part of due diligence, but takes time and skills to acquire. Company information also has value, but it’s free because it helps the company (or fund) to raise capital. Securities are required by law to provide certain information about themselves, but the free information is only useful relative to the aggregate. To make good investment decisions, you need to look at both.

So I found a source for the information I needed after conducting a few days of research, and paid to get access to some aggregated data. I learned that the top 12 monthly dividend-yielding Canadian Equities and Exchange Traded Funds offer annual yields that range from 15.3% down to 12.0% (at the time). The average yield was around 12.4%, which is far better than most mutual funds on the market and does not include capital gains.

In order to have the interest on my credit card debt paid by dividends rather than by me, my plan is to buy monthly dividend-yielding stocks. Every dollar in dividend yield I use to pay my credit card debt is a dollar I don’t have to pay the credit-card company out of my own pocket. Over time, it is realistic for me to use my investments to make the interest payments, and then every additional penny I pay lowers my overall debt. And because the dividend yield keeps coming and growing (with regular investments), the rate at which I pay off my debts accelerates while my assets cover the interest payments for me.

Now, here is an example of unrealistic goal-setting: I’m going to invest in GICs and Mutual Funds earning gains of between 3% and 10%. The gains I make from them will be enough to pay off my debts. I will continue to service my debts by making only the minimum payments until the GIC’s mature, and the Mutual Funds go up.

The first example is filled with due diligence, careful calculation, and a high degree of self-knowledge. The goal is set only after getting to know a real-world option that clearly increases the amount of Financial Freedom enjoyed by the investor on an ongoing basis. The goal is also realistic, given the returns on investment are in the form of cash flow from dividends.

The second example involves a low level of understanding about the world of investments, poorly made calculations, and very little self-knowledge. Since Information Arbitrage is the norm, this is an opportunity for both salespeople and con artists to make a quick buck at the investor’s expense. For this reason, my personal preference is to avoid the sellers of financial products until I fully understand the products they offer on my own.

There is an old saying in the investment world, “it’s not how much money you have, it’s how much money you move.” In other words, the name of the game is Cash Flow. Financial Freedom is defined in terms of Cash Flow to people with the Investor’s Money Mindset: When your income from passive sources (your investments) exceeds your expenses, you are Financially Free. The question is, how will you leverage your money to produce more income and fewer expenses?

When it comes to Cash Flow, keep in mind that Assets on your balance sheet are Liabilities on someone else’s. Assets put money in your pocket over time, and involve a commitment from somebody else to pay you. This money is called “income”. Liabilities take money out of your pocket over time, and involve a commitment for you to pay somebody. This money is called “expenses”. The size of an Asset is less important than the amount of income it produces. As well, the size of a Liability is less important than the amount of expense it produces. The money that flows to you, flows from someone else. The money that flows away from you, flows to someone else. This is why the Money Game is primarily about cash flow, not net worth (although net worth is still important). And the goal of the Money Game is to have more income from Assets than expenses from Liabilities.

When you examine all realistic financial plans, they are focused on managing and improving cash flow. Unrealistic plans treat money as static, and often take overly simplistic approaches to solving financial problems. To make wise investment decisions and leverage your money, understanding the playing field is essential.

Know the Players

There are a lot of people who work in the Financial Industry, from Investment Advisors to Bank Tellers. But they are not the whole picture. When you purchase any investment vehicle, corporations, governments, stock exchanges, and a myriad of other regulatory bodies are also involved. And while Investment Advisors must by law help walk you through much of the due diligence found in the last article, they are still salespeople. Therefore, the most important question you can ask as you seek out helping relationships when it comes to your money is “how does this person benefit from helping me?”

There is no nurturing matriarchy, no benevolent paternalism in the world of Finance. The referees – Securities and Exchange Commissions – do their best to protect citizens from dishonesty, but the likelihood of conviction for white-collar crime is very low. It is extremely difficult to catch and prosecute people who offer lousy financial advice, or sell you bogus products. Whereas in a family, a school, or a workplace there are usually people whose role encompasses the responsibility to help you make good decisions, when it comes to finance you are expected to use your own mind to make them for yourself. Ultimately, the responsibility for the outcomes of your choices around money are yours, even if you have someone you trust looking after things for you.

And while the advice of experts and insiders can be hugely valuable, the ethics of what they can and cannot tell you are largely situational. Some of these ethics are codified into law, such as insider trading legislation or the customer intake requirements that every Financial Planner must obey. But even codified standards regarding the sharing of financial information are fuzzy because there are so many variables to consider. Especially for people with the Money Monk, Hoarder, Emotional Spender, and Employee Money Mindsets, this can be very difficult to grasp: The world of finance is a game that’s played for money using incomplete information. There is no central controlling authority manipulating everything from the background because nobody has enough information to be able to do that with total authority.

When it comes to selecting people to rely on for information and services in the financial industry, it pays to know the following four categories: Commensalists, Mutualists, Trolls, and Parasites. Keep in mind these are categories for potential advisors, not corporations or governments:

Commensalists are people who benefit from relationships while the other people remain unaffected. In the world of finance, Commensalists are extremely uncommon. Since practically anyone who will provide you with useful information or offer valuable advice will benefit in some way, there are almost no situations where truly commensal relationships can be established. Eventually, all relationships with Commensalists evolve into something else, or fade away. So even if you do get to know one or two, be prepared for them to change.

Mutualists are people who consciously make win/win deals. Their preference is to offer information (rather than advice) that can benefit both you and them, making relationships with ethical Mutualists Assets. They are interested in developing long-term mutually beneficial relationships, and take an interest in actively sharing complete information. However, before you can have a relationship with a Mutualist, you must both have complementary ways of generating income. Otherwise, your relationship will fall into one of the other three categories.

Trolls are almost the exact opposite of Mutualists. They are often unconscious of their preference for deal-making where everyone involved loses, making relationships with them Liabilities. Typically, Trolls deplete their own resources to the point where they are unable to invest anything but time and opinions. And their opinions typically lead them to believe there are few options available because they focus on limitations rather than possibilities. Trolls are typically the first to blame corporations or governments for their personal financial problems, rather than taking responsibility for their choices and seeking ways to improve them.

Parasites benefit at the expense of others. Relationships with them are also Liabilities. Their preference is to control the information available to you while offering advice that will largely benefit them. They are more interested in getting money, status, or power than in helping others when they make deals. Parasites share information as a way of directing your decisions, rather than as a way of nurturing a relationship or helping you win.

Trolls are very common and Parasites are found in almost every community. Both will do anything to look like Commensalists or Mutualists, and will go to extreme lengths to look legitimate. Thousands of people every year get taken in by scam and shady Financial Planners because of this camouflaged approach. (It pays to be aware of the many different types of scams.) Many professional advisors walk a very fine line in this regard.

If you get offered an investment opportunity that has outrageous returns, is by invite only, or makes you suspicious in any way, a phone call to your Provincial Securities and Exchange Commission can be very worthwhile. They can usually tell you if a company has been properly registered and is allowed to sell investment opportunities, or if they’ve received any complaints about a company. They can also direct you to sources of useful information about almost any general topic in the world of finance. In the Money Game, it is worth your time to keep abreast of the information offered by the referees.

Reward Yourself Intelligently

One of the biggest and most common mistakes people make as they attempt to improve their financial situations is failing to reward themselves after taking each step towards Financial Freedom. Rewards help make a person’s vision of a freer future feel more tangible, more realistic, and more achievable. Ask yourself this: If you aren’t willing to reward yourself for taking action to improve your financial picture, then will you ever really be able to feel Financially Free? If resisting the temptation to adhere to your old Money Mindset was its own reward, there would be no point in celebrating your successes. Success is meant to be celebrated, and celebrating it appropriately will help you to create even greater successes in the future.

Rewards can be as simple as a little self-talk. “I did that well!” and “Way to go!” are examples of how you can pat yourself on the back. Doing this is a way of managing your emotional state when it comes to money. Even if you slip up and indulge your old Money Mindset by making a poor decision, it’s very important not to berate yourself. Rather, find a positive step consistent with your new Money Mindset and take it each time you find yourself lapsing back into your old ways. If the overall balance leans towards your new Money Mindset, then your overall progress towards Financial Freedom will also be positive. In the field of addictions counselling, there is a saying: “A lapse is not a relapse.” Little positive rewards through self-talk help to tip the financial scale in your favour over time.

The opposite of reward is punishment. When it comes to money, punishing yourself for mistakes or bad habits is extremely counterproductive. The most common way people punish themselves is through self-talk, but there are plenty of destructive ways people condition themselves to have bad feelings about money. If you punish yourself each time you make a financial mistake, you are training yourself to avoid taking steps to improve your financial situation and failing to learn from your mistakes. The practice of self-punishment for financial matters increases feelings of distress around money and lowers your financial self-esteem, which in turn can prevent you from acting on good ideas as well as bad ones. The key is to use positive reinforcement, rather than negative, to increase your self-esteem and confidence in dealing with financial matters.

There is a threshold at which your confidence becomes strong enough for you to act on your financial plans. Below this threshold, people often find themselves in a holding pattern until they are fully prepared to move forward. But even when they have the confidence, old habits and distractions can keep people going in circles. If you are close to the threshold, or feel that you have crossed it, you can force yourself to take action by making a contract with someone else. For example, wagering with friend that you will act before a certain date can be very effective if you agree to present evidence that you acted to him or her.

Contracts can work even if they are with yourself, and better still if you write them down. But they must achieve two very important objectives to be effective:

A contract must reinforce not acting from the Money Mindset that you want to leave behind. For example, if you want to let go of the Emotional Spender Mindset, you could reward yourself for turning down chances to spend frivolously by putting some of the money you would have spent towards something personally meaningful that will last for a long time. (When I was getting over this mindset, at first I put my money towards building a cherished collection of music. Later, I saved up for trips to California to visit a girlfriend.)

A contract must also reward you for acting from the new Money Mindset you want to adopt. For example, if you want to adopt the Investor’s Mindset, you could take yourself out for lunch each time to purchase a security. (I still do this, but now I often find someone special to take with me because it’s even more meaningful to me.)

Some people were given a lot of negative reinforcement growing up. This can be a real barrier to acting on a good financial plan, and can even prevent a person from making a plan in the first place. Contracts can be effective for these people, too, but they must be extra-diligent in honouring the contracts they make. Everyone can benefit from focusing on how money has made their lives better in the past, discovering how it can be rewarding in the present, and looking forward to positive financial outcomes in the future. Anyone can break a contract, but by focusing on the positive and sticking to it, anyone can benefit from honouring a contract as well.

The process of changing to a new Money Mindset and accruing the benefits is not instantaneous. It is gradual, and it is shaped by you. The journey is touched by moments of doubt and panic, and sometimes there are discouraging setbacks. But it is possible to make lasting positive changes to your financial picture if you take the time to celebrate your little successes along the way. Each step, whether successful or not, deserves to be rewarded if it comes from your new mindset. These little rewards can add up over time and help your to overcome fears and insecurities. Eventually, your enthusiasm will outweigh any feelings that hold you back, and it will feel natural to act from your new way of thinking about money. The key is to keep in mind that you are worthy of the rewards and never withhold them from yourself; to make your contracts effective; and to make your celebrations meaningful.

It’s worth taking on the challenge in the end

Achieving Financial Freedom will liberate you not only in terms of your pocketbook, but socially as well. It is a challenge that we all face, yet surprisingly few people take the steps necessary to make it happen. By rewarding yourself intelligently for each step; getting to know the playing field and the players; countering your bad habits and self-talk; and committing yourself, you can make worthwhile changes to your financial picture.

Bibliography

The following materials can help you to enjoy the benefits of a healthier Money Mindset, as well as understand the impact your mindset has on your family and community.

Articles
- The 8 Steps to Wealth from Sources of Insight

Books
- The Millionaire Next Door by Dr. Thomas J. Stanley
- Stop Acting Rich: …And Start Living Like A Real Millionaire by Dr. Thomas J. Stanley
- Think and Grow Rich: The Landmark Bestseller–Now Revised and Updated for the 21st Century
- The Richest Man in Babylon: Now Revised and Updated for the 21st Century
- Rich Dad’s Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!
- Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom
- Canadian Securities Course Volume 1
- Canadian Securities Course: Volume II
- Get Smarter: Life and Business Lessons
- Ready, Fire, Aim: Zero to $100 Million in No Time Flat (Agora Series)

Please refer to the bibliographies found in the previous two articles in this 3-part series for further reading, audiobooks, and videos:

1. What is Financial Freedom?
2. Making Financial Changes

There is a classic story about Alexander the Great. It turns out he encountered a yogi on the day he came to the Indus river, following his conquest of Persia and the Middle East.

The yogi was meditating when Alexander walked up to him and asked, “what are you doing?”

“Contemplating nothingness,” said the Yogi. “What are you doing?”

“Conquering the world!” replied Alexander.

Then they both laughed (presumably at each other). But why?

Coming from the Greek philosophical tradition, Alexander believed we only have one life to live. Coming from the Vedic tradition, the yogi believed we are reborn many times. To Alexander, conquering the world before his life came to an end was the best way he could spend his limited time alive. To the yogi, stilling the inner fluctuations of his mind was the best way to reach nirvana.

Each had a mindset that shaped his goals and guided his actions, illustrating the power mindsets have over the choices people make in life. When it comes to finances, your Money Mindset determines the strategies, goals, and choices you make. In the last article (this is the second in a 3-part series), 9 Money Mindsets were explained. Each one has a different interpretation of what it means to be Financially Free, and one of them meets more of the definitions of freedom than any other: the Investor’s Mindset.

There is a definite advantage to being aware of your personal definition of Financial Freedom, and how it compares to others. Often, people have different definitions in different circumstances. This can be advantageous when you want to meet with the approval of your friends and family, but is often detrimental when you want to implement and maintain a long-term strategy. Plus, different Money Mindsets have different notions of the long-term and what makes a good strategy.

Financial Success Requires Preparation.

Financial Freedom is rarely (if ever) achieved overnight. Before one begins moving towards it, it helps to identify the effects of one’s Money Mindsets in different situations. There is an old saying in the business world; “your income is the average of the six people closest to you.” This is because social situations typically determine the Money Mindsets you hold, unless you consciously choose to hold one in particular. This is true for everyone from Wall Street executives who manage trillions of dollars to bums who beg for change. Your Money Mindset determines what you do when it comes to money.

No matter who you are, Financial Freedom is the product of a consistent and productive Money Mindset. However, changing it may distance you from some of your friends and family while moving you closer to new people and social settings. Along the way, you will most likely win some false friends and some true enemies in spite of being honest and fair in your dealings. Without a wise and consistent approach, Financial Freedom is next to impossible. Nonetheless, financial success is a worthy objective because it means you will have more freedom to make life more enjoyable, to do more good in the world, and to leave behind something positive when you go.

Focus on the liberating nature of Financial Freedom.

The journey to Financial Freedom starts with raising your awareness regarding your own thoughts about money. Part of this awareness includes seeing how different Money Mindsets produce different outcomes in your life and the lives of people close to you. While an Emotional Spender is likely to throw great parties and then have trouble paying the rent, an Employee is likely to be able to plan for upcoming expenses and then retire poor. While a Business Owner is likely to work harder than Employees for several years and then be able to take almost unlimited time off, an Independently Self-Employed person is likely to have more time and money than Employees but keep working well past retirement age. The point is, what one person finds liberating may seem like a high price to pay to someone else. It pays to be aware of what your Money Mindset is getting you into.

Once you become aware of the various Money Mindsets, it becomes a lot easier to pick the one that will serve you best in the long run. In an immediate sense, you may only be able to see how your current (or past) Money Mindset got you into the situation you are in at the moment. But what if you had made different decisions and taken different steps leading up to this moment in time? Which Money Mindset would have benefited you the most? Which one would benefit you the most in the long run? Who do you know has that particular Money Mindset?

Oftentimes looking at the past, present, and future like this helps a person to realize missed choices and alternatives. By examining things from a different Money Mindset, one can see possibilities that seemed hidden but were there all along. One is able to see where one made mistakes, who is actually supportive of one’s financial success, and different ways to act in the future. This is important because typically, there are people whose influence made a big difference to one’s decisions in the past. As one moves forward in time, one is far better off discussing finances with people who have Money Mindsets that result in real Financial Freedom than with people who are struggling.

You will find that you become more liberated, both socially and financially, when you choose to discuss financial matters with people you select carefully based on their Money Mindsets. But sometimes people have huge internal barriers to doing this, often because they fear losing friends or having differences with relatives. The key is to let yourself experience the forces of social liberation positively, rather than becoming bogged down trying to hold onto impoverishing relationships and ways of thinking. Financially unsuccessful people often mistake supportive suggestions and constructive criticisms about their Money Mindsets for coercive acts. Yet while it is natural to defend one’s boundaries, it is foolish not to try looking at things differently when one needs a change.

Attaining Financial Freedom is fundamentally liberating. The nature of this liberation is definitely pro-social, not just because the exchange of money is a social activity – there are always at least two people involved in any transaction – but because it often changes people’s situations (or lives) for the better. It feels great to be in a position where you can engage in the exchange of goods or services freely, knowing that money is just part of the transaction. In the final analysis, the difference you are making in the lives of everyone involved is what matters.

Leverage the Power of your Emotions.

Consider for a moment that every financial decision is made at some point in time. When we make decisions, how we look at time is very important. Many people are present-oriented, and so they are heavily influenced by the people and things in their environment when they make their decisions. Some people are past-oriented, and how they recall the past strongly influences their decisions. Finally, some people are future-oriented, and their goals and objectives (or their fears and pessimisms) help mould their decisions. Your time-orientation has an enormous impact on your level of Financial Freedom because it determines what is relevant to you when you make a decision.

Every financial decision you make is shaped by the intersection of your time-orientation with your Money Mindset. Your time-orientation determines the relative importance of the information available, while your Money Mindset determines the value you place on it. If Sally is a present-oriented Emotional Spender, she will tend to spend money gratuitously on goods and services (or gifts) she thinks might help to satisfy her emotional needs. If Harry is a future-oriented Employee, he will tend to be a very loyal worker who pays his bills on time and buys into the company pension plan. Of course, from time to time we all act out of character. Nobody is 100% in any intersection all the time for this reason. And as it turns out, there are three time-orientations that are characteristic of people who enjoy greater financial success in life than the others. They tend to enjoy better health and more fulfilling relationships as well!

It would be nice to say we all make decisions rationally (classical economics assumes this to be the case), but there is a strong body of evidence that shows people are not really all that rational in their financial decisions at all. This may seem obvious, but many people do not recognize how their own irrational behaviour affects them. For example, a past-oriented person who has negative feelings about money will tend to make decisions that push money away. If she has a Hoarder’s mindset, she will tend to store money where it cannot affect her daily life and then refuse to let it grow beyond a certain amount. Another example could be a future-oriented person who can see opportunities to create streams of income. If he has a Business Owner’s mindset, he will go about setting up a business system specifically for generating cash flow from that opportunity. The decisions they make are not necessarily rational, but their time-orientations and Money Mindsets affect them emotionally when they make decisions.

Research has shown that people who are successful financially, socially, and in terms of self-actualization, all have a similar pattern of time-orientations. In a nutshell, these are people who enjoy recalling positive memories and experiences almost to the exclusion of negative ones; choose that which offers a moderate level of pleasure in any given moment; and have interesting or exciting plans for the future. The ones with the highest levels of financial success have the Investor’s Money Mindset, and are followed (from greatest to least) by Business-Owners; Team-Oriented Self-Employed; Independently Self-Employed; Employees; Emotional Spenders, Avoiders, and Hoarders; and finally the Money Monks.

If you want to know how to leverage the power of your emotions to benefit you financially, try this simple thought experiment: Imagine formulating a plan to make some money grow, with a future time-orientation. What would the plan include if it was written by someone with an Employee’s mindset? What would it include if it was written by someone with a Business-Owner’s mindset? What if both plans were rewritten with a past time-orientation? It’s easy to see that very different decisions would be made – because Financial Freedom means different things to different mindsets, and the ability to see the possibility of achieving it depends on time-orientation.

As you imagined each plan, you considered how the Money Mindset and the time-orientation shaped the decisions that went into making it. Whereas the Employee’s plan included getting a job, the Business Owner’s plan included starting or growing a business. Whereas the past-oriented plan placed greater emphasis on things that worked previously, the future-oriented plan placed greater emphasis on what might work in upcoming circumstances. As a bi-product, the amount of money considered in each case also changed.

By applying the three time-orientations of successful people you condition yourself to be emotionally stimulated in ways that help you to succeed. All that remains is to adopt, consistently, the Money Mindset that will deliver the greatest amount of Financial Freedom in the long run. Of course, it helps a lot if you avoid “dream-stompers” and socialize with people who use these time-orientations in conjunction with the Money Mindset that will benefit you the most.

Get to Know Yourself Better, Financially.

By now you’ve probably noticed that if you want to achieve Financial Freedom, certain principles need to be applied consistently. It is more than an introspective process because none of the evidence for success – assets, net worth, cash flow, etc. – is found in the body. Problems crop up most when you are either inconsistent, or choose dysfunctional combinations of time-orientations and Money Mindsets. It can be frustrating because it may mean reconsidering your social life or training yourself to look at life differently. But when you find out what to do, it can also leave you feeling, thinking, and believing that life can be substantially better.

By answering the following four questions, you can evaluate which Money Mindset would be the most financially beneficial and meaningful to you, given your desire to improve your current situation. Compare the 9 Money Mindsets:

1. How much value do you perceive in getting the benefits of each one?
2. If you were to adopt one consistently, how strong are your expectations of being able to achieve its definition of Financial Freedom?
3. How long will it take to satisfy you that a new Money Mindset is actually paying off enough to be worthwhile?
4. And finally, how sensitive are you to acting from a different mindset?

Your answers to these questions will change as you gain greater competence with money, as you get older, and with the amount of urgency you feel around changing your life circumstances. By answering them consciously, you are able to observe your progress and see how the pros and cons you perceive in the different Money Mindsets change over time.

Asking these questions as part of your financial decision-making process also leverages your ability to think before you act. Over time, almost every habit you have can become so unconscious that you don’t even know you’re doing it. This is especially true when it comes to the Intersections between time-orientations and Money Mindsets. Often, people set themselves up to take action using one Intersection and when the time comes to do what it takes to achieve their objectives, they switch to a different Intersection and things fall apart. By asking these questions, you can prevent your habitual Intersections from interfering while you choose the Intersections that are most appropriate given your new financial goals and objectives. Changing mindsets can be a bit frightening when you are really stuck in your ways, yet highly liberating when it turns out to make your life better.

Asking these questions also helps you to create and maintain a self-image that includes being Financially Free. Consider that if you never imagined yourself having Financial Freedom, you could only create it by accident. On the other hand, if you picture it as part of who you are (or will be), it will help you adopt the Money Mindset and necessary time-orientations to make it so. Your subconscious mind will automatically go to work reconciling any differences between your current situation and what you imagine it should be. You will be able to consider more solutions, and different sorts of options will become apparent to you. The difference will show up first when it comes to the decisions and opinions you hold about money. Later, it will show up in the form of a change in your level of Financial Freedom.

In school, a mistake is something that costs you on a test. It is like an expense. Outside of school, a mistake can be made into an asset – but only if you learn from it. It pays not to repeat poor financial decisions, and the good ones bring you closer to Financial Freedom. Before one finally makes the changes one envisions for one’s financial life, one consciously or unconsciously creates a weighted list of pros and cons about making the change. By examining how it will affect yourself and others, and the reactions that everyone (including you) may have to it, you can bring about changes in your own perspective. Once you see money differently, it feels natural to make different financial decisions. And if you want to learn from your mistakes, you need to give yourself the freedom to experiment with making decisions so you sense where they may lead.

Commit to making and sticking to a well thought-out Plan.

If you’ve read this far, odds are that you are already committed to making a lasting change to your financial situation. You most likely sense the social liberation that is possible, experience emotions that motivate you to go further than just talk about it, and you are willing to re-evaluate yourself in the light of new information and options. This will take you right up to the point of acting on your intentions, and may even nudge you into taking some small and constructive steps. All of this bodes well because changing your financial picture requires commitment.

Often, people get to the point where they are ready (psychologically) to act but get stopped in their tracks because of some internal or external pressure. Most often, this pressure feels confusing and stalls the momentum a person has built up. But there is another way: the key is to realize that what you commit to determines what holds you back, as well as what moves you forward.

Making difficult decisions can test how deeply you are committed to your financial goals. Choices between short- and long-term goals, such as spending to maintain your lifestyle now or investing to have a better lifestyle in the future, are where this test occurs. In a world of instant gratification, this can be especially hard for younger people. Only once you no longer feel ambivalent about making long-term life plans will it feel natural for you to make a financial plan and stick to it.

How much information do you have? Is the information you have pertinent? Here is a collection of items you will want to gather. Keep in mind that most people feel anxiety to one degree or another when they look into these. Often, their commitment is challenged because they expect too much of themselves. The art of gathering this information is to focus on serenity during the process, and to expect incremental changes to be the norm:

1. Your current financial and personal status.

For a lot of people, this is usually the one that causes the most anxiety. It helps to keep in mind the reason you are gathering this information is so that you can make your life better. A very small amount of courage – just enough to help you get a clear picture of your actual situation – can have long-lasting benefits for your overall financial self-esteem. The trick is to look for ways to turn your financial mistakes into lessons, while focusing on the little things at first.

2. Your financial goals

The fact that goals are in the future is often a source of discomfort for people. While it is important to be moderately optimistic that you can achieve your goals, it is also important to be somewhat realistic. Goals that are exceeded tend to build confidence. People who have a poor track record of setting and achieving goals often prefer not to gather this information because they don’t believe in their own abilities. (If this happens to be you, refer to the previous item.) The key is to use small, manageable goals at first to build up your confidence and give you the experience that you need to set and attain larger goals.

3. Your tolerance for risk.

There is a balancing point between sleeping well at night and benefiting from financial decisions. How you handle risk has a direct bearing on what you are willing to do to reach your financial goals and have the lifestyle you desire. This is closely related to your ability to delay gratification, since a carefully made plan will likely have long-term rewards that take self-discipline to obtain. The key is to maintain the balance.

4. How you normally make important decisions.

Earlier in this article, there was a model of four questions that can help you to make important financial decisions. Other decision-making models exist, and most people already have a way they prefer. The key is to look at the results your decision-making process generates. If you are not doing very well financially, you probably need to re-examine yours. It always pays off to find a way it can be improved. In the long-run, how you make financial decisions is more important than financial mistakes you make in the short-run.

5. Who you communicate with about money, and why you’ve chosen them.

This one can really bring up some tough decisions for people. You may find that you’ve been choosing to listen to people who have absolutely no idea what they’re talking about. You may find that you’ve chosen advisors for reasons that are totally unrelated to their financial acumen. The bottom line is you need to decide who you talk with about money based on how qualified they are to speak about it. The only people who are truly qualified have been in a situation similar to your own, and have taken steps that have created a significantly better situation in real life. Everyone has opinions about what to do when it comes to money, but the only ones worth listening to have made decisions that caused their money to grow. The key is to spend time with people who have Financial Freedom, or are working towards attaining it with an open mind and a desire for evidence.

6. What your own psychological needs are in relation to money.

Did you know that not investing or investing too conservatively can be more risky than investing aggressively? Many people constrain their money from growing (like the past-negative Hoarder) or limit their financial opportunities out of a need for security. Others take foolish risks out of their need for freedom and self-sufficiency. Before you begin trying to make your money grow, it’s very worthwhile to reflect on why you need money and what you really want to do with it. The list may surprise you. The odds are your psychological needs around money also show up in your relationships because money is very often used to facilitate satisfying love-needs.

7. The risk of not diversifying.

One of the risks inherent in the Employee and Independently Self-Employed Money Mindsets is the tendency to put all of one’s eggs in a single basket. The Employee can get in serious trouble if he/she loses a job, and they both can get taken out of the game at any time if they lose their health. A Business Owner diversifies his/her product line in order to reduce the risk of losing a stream of income and sets up systems to run without him there. The Investor builds a diversified portfolio for the same reason. In the long run, it is important to concentrate your efforts but foolish to rely on a single stream of income to pay your bills. Once again, the key is balance.

8. The risks involved with changing your purchasing power, losing your money, and using money internationally.

It’s important to know the lay of the land when it comes to investing. If you pay off a debt, it may free up money to use for other things. If you lose everything in a bad investment, it may make you eligible for tax breaks. Foreign currency is useful while travelling but mostly useless at home. The financial decisions you make need to take into consideration how they may affect your overall lifestyle.

9. Your net worth.

Net worth is the measure of the total value of all your money and possessions less all your debts. It is like your score in the money game. However, there is a large subjective component to it that involves estimating things according to market value. eBay can be amazingly handy for calculating the value of such items because you can see how much you can expect them to fetch, and it can be a rather disappointing reality check for people when they find out a beloved family heirloom is worth basically nothing. (Sadly, this is much more common than finding a rare gem worth millions.) Net worth can never be more than a vigorously-calculated estimate but it does give you a pretty good idea of how well you’re actually doing, and how easily you can cover the bills if you get into trouble. The key is to keep informed on how big a financial hit you can take.

10. How to keep and organize your financial records.

Organized people are usually more financially successful than people who keep their records in a hodgepodge. But even well-organized people can experience confusion and frustration when it comes to sorting out their financial information. The key is to model the tools used by financially successful people. See the bibliographies from this and the previous article for books, videos, and audio programs that contain salient advice in this regard. The key is to progressively increase your level of financial literacy on an ongoing basis.

11. The financial problems and constraints you currently face or may face in the future.

Children create the need to save for their education, aging produces the need to save for old age, and social commitments can interfere with maintaining multiple streams of income. Knowing what holds you back from achieving Financial Freedom can serve to focus your efforts and help you to make the difficult decisions discussed earlier. The key is to be honest with yourself about how much freedom you have to act, given your situation, without getting bogged down in cycles of blame, denial, or delusion. “To thine own self, be true.”

12. Where you are in the life cycle.

People under 35 are generally able to tolerate more risk and willing to take more chances. People under 55 are often focused on reducing expenses and increasing savings. And people in their peak earning years will often be focused on saving for retirement. Although these stages are not distinct, considering what you want your financial situation to be like at different points in the life cycle can be an excellent starting point for making a plan you can stick to.

This list is not the whole picture. Examining each item can help you discover a large number of small steps that you can make. Done in bite-sized pieces, the incremental benefits of taking small steps can build momentum and help you set realistic and increasing financial goals that you actually accomplish. The point is that the small steps are essential, and need to be taken in order to reach the point where you are ready to make take the really big steps. There is an old saying; “Pennies become dimes, and dimes become dollars.” Little financial steps can add up to big financial accomplishments.

Make Promises and Use Deadlines to Move Yourself Along.

Another way people can make lasting financial change is to set dates for changes to take place. This can help you to overcome procrastination, especially if you tell someone your intentions. It can also stop you from acting too soon, when you are not fully prepared. Dates give you a focal point in time that should correspond with a place and an action in your mind. When you put all three together regularly, you are far more likely to make improvements to your financial situation than otherwise.

Which are you more likely to deliver on, goals or promises? Studies have shown that people are over 80% more likely to deliver on a promise than a goal. A good way to ensure that you’ll take the steps you need to take is to promise someone that you will take them. A supportive friend, spouse, or parent will take in such promises and have faith in you. The more meaningful it is for you to keep your word with a person, the more valuable that person is for helping you take the financial steps you want to take.

For some people, preparing for even a small financial change is like preparing for major surgery. As the date approaches, it’s important to surround yourself with people who are supportive. It’s up to you to put everything else second. This can be especially hard if you are dependent on other people, financially. It often requires taking risks you are unfamiliar with taking. And other areas of your life may suffer while you take the necessary steps. All I can do is assure you that if it is done well, the change will be worth it. Financial Freedom often comes with growing pains.

The above list can help you to gather most of the information you need to make an informed and reasonable plan. Looking into it will likely produce helpful tidbits from people you know, articles and books you looked at or read, and observations you make on your own. Along the way, you will likely learn some false information, try out tools and techniques that don’t work, and take on attitudes that are counterproductive. The key is to be eminently pragmatic: Focus on what works, experiment where you can to be certain, and verify the information you get before you act on it. Money is a very emotional topic, and people want other people to believe their delusions. Be specific about what you want, seek to discover and overcome your misunderstandings about the world of money, include a variety of techniques for dealing with your obstacles, and pay attention to what’s going on in the world. A plan like this, one that is truly your own, will carry you farther faster than anything someone else can create for you.

Doing Due Diligence means Preparing Properly, not just Gathering Information.

The story of Alexander and the Yogi illustrates the power a Mindset can have over a person. The work of Phillip Zimbardo reveals the impact time-orientations have on a person’s long-term well-being. The Intersection of a person’s time-orientation and Money Mindset determines which choices a person will perceives in any situation. In the long run, selecting the best Intersection to use is the key to achieving true Financial Freedom.

Financial Freedom liberates you, not just financially, but socially and emotionally. By considering the personal utility of each Intersection, you can leverage the power of your emotions to attain it. Taking small steps can build your confidence and raise your level of commitment to changing your financial picture. The best strategy is to do your due diligence while making a well thought-out plan to become Financially Free.

* This is the second in a three-part series on achieving financial freedom. The first article can be found here, and the third article can be found here.

Bibliography

The following materials can help you to become aware of the effects of your Money Mindset and time-orientation, as well as get a thorough understanding of how to make a solid financial plan that you are motivated to follow.

Books
- The Time Paradox
- Canadian Securities Course Volume 1
- Canadian Securities Course: Volume II
- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not!
- Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom
- Rich Dad’s Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!
- The Richest Man in Babylon
- The Millionaire Mind
- Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth
- The Millionaire Next Door
- Who Moved My Cheese?: An Amazing Way to Deal with Change in Your Work and in Your Life
- Changing for Good: A Revolutionary Six-Stage Program for Overcoming Bad Habits and Moving Your Life Positively Forward

Video
- Time-Orientations Explained

What do the words, “Financial Freedom” mean to you? Your answer to this question depends on your money mindset, and your money mindset has an enormous impact on how much money you have. This article identifies nine money mindsets, and one in particular that satisfies more definitions of freedom than any other.

The 9 mindsets in this article are very general, but they ring true for many people. They are presented in the order that most people adopt them growing up. We all have remnants of many of them in our outlooks, and so it is rarely correct to simply say you have one or the other mindset. Rather, think of yourself as having more than one of these, with some guiding your attitude towards money more strongly than others.

The first step in becoming financially free is to choose and adopt a perspective on money that will bring you closer to it. This is not taking action, but rather the willingness to consider new (possibly more complex) ways of thinking about money. When your current situation is not working out, a new perspective may very well produce more desirable results. By becoming familiar with the following 9 money mindsets, you can choose to focus on the one that will benefit you the most.

Money Monks

When we’re young, money seems to have magical properties. As small children we often expect that our parents can magically produce it whenever necessary. Sometimes, they may tell us not to touch it because it might be (or is!) dirty. Together, such notions can lead to a sense that although it can help us satisfy our needs, we need to be protected from it. Rather than touch it, a Money Monk will try to remain spiritually pure by getting someone else, usually a caregiver, to handle it.

People become Money Monks innocently, though not everyone experiences this mindset as strongly as others. It seems to depend on when a person started having experiences with money; what one heard about it growing up; and what one thinks can be done with it. Ultimately, the money attitudes of peers and family members tend to determine how much we believe it affects our spiritual purity. Sometimes people hold religious convictions that reinforce this mindset.

To the Money Monk, financial freedom means not being tainted by it. Sadly, this can only last for short periods of time because money is everywhere. Eventually, perhaps at a coffee shop or the grocery store, the Money Monk will have to use money. When that happens, efforts to remain pure get frustrated. Money Monks often come to associate dark and negative emotions with money for this reason. In some people, this mindset lingers for life because they allow the fear of poverty to reinforce it over and over again in their daily lives. Fortunately, a lot of people grow out of it.

Emotional Spenders, Avoiders, and Hoarders

Money serves us when we have it to spend. With the power of credit, money also serves us when we can borrow and pay it later (for a cost). Yet if we owe it, it can also have power over us because then we have to get more to pay it back. Money can be a double-edged sword, yet it is clearly empowering for those who use it wisely. Because it can be used to acquire sustenance, there is a nourishing aspect to it as well. And because it can be fun to use, money can also be motivating.

To an Emotional Spender, financial freedom means having an endless supply of money to spend whenever the urge presents itself. These people tend to throw the best parties because they go all out. They tend to have large wardrobes, nifty gadgets, give generous tips, and have trouble paying the rent. Paycheques arrive just in time to buy a round for their friends, but not in time to prevent the new cell phone from being cut off. They often try to focus on earning more money so they won’t have to cut down on spending, and then go out and spend even more. But hey, these people are fun.

To an Avoider, financial freedom means never having to look at bills. So they never open them. Until the cable gets cut off. Then they pull out their checkbooks and pay all the bills at once. And are they ever relieved when they finish! They can now avoid the bills until they get caught driving with an expired insurance policy. When tipping, they might hide the money under a cup or a plate. Their mantra is, “out of sight; out of mind” which is why they hide their bills in drawers and shoeboxes rather than dealing with them promptly. They would rather let the bills pay themselves. But hey, at least they won’t pressure you to pay them back that $5 they loaned you.

To a Hoarder, financial freedom means having enough money tomorrow. The cost of something is money that could still be in his or her pocket if only it doesn’t get spent. Often, thrift will be more important than quality or emotional sentiment to a Hoarder. Even though they are diligent about paying their bills and covering their expenses, they are more likely to focus on cutting costs and dodging risks than enjoying the money they have. Somehow, there is never enough money even though their bank accounts are generally healthy and credit rating is good. When Hoarders visit restaurants, they feel a need to divide up the bill right down to the penny. Sometimes they will carry a calculator specifically for this purpose. They tend to question leaving even a minimal tip, the size of which may take longer to debate that it did to eat the meal. But hey, at least you know they can afford their share of the bill.

All three of these money mindsets tend to lead to overwhelming situations. The Emotional Spender eventually gets overwhelmed by how much effort it takes to keep up with eviction notices and ever-expanding debt. The Avoider is eventually overwhelmed by the consequences of pretending the bills don’t exist. And the Hoarder is eventually overwhelmed by his or her own lack of security and diminished sense of self-worth.

People with these mindsets often get stuck in a cycle of innocence and pain. When one (e.g. Emotional Spending) doesn’t work, they try switching to another one (e.g. Avoiding) with disastrous consequences. Although it may seem natural to resent money out of frustration from not having a lasting or workable solution to financial problems, it is just as natural to realize that money can be liberating if you manage it well. Still, it can be very difficult for someone with one of these mindsets to admit (or even recognize) their skills need improvement. They may simply be unable to perceive other mindsets, or they may find that other mindsets don’t serve their egos as effectively.

The Hoarder needs to learn the benefits of buying for quality, and how to find enjoyment in being generous; the Emotional Spender needs to learn how to get emotional well-being from preserving wealth, and find enjoyment in using it towards achieving long-term goals; and the Avoider needs to learn to deal with money matters as they come up. In other words, the key to having power over money is having the self-discipline to use it to your benefit over time. The Avoider, the Hoarder, and the Emotional Spender are all focused on satisfying immediate needs when they choose to avoid, hoard, or spend.

The inability or unwillingness to plan for the long-term use of money towards personal well-being; caring for others; or the enjoyment of life can cause people to become stuck in any of these three mindsets. When a person learns that money can be used to nurture without perverting; empower without punishing; and motivate without enslaving, that person gains a new level of insight and these three mindsets can be outgrown.

Employees

One nice thing about being an employee is getting a steady paycheck. It is so much easier to plan for the future when you know how much money is coming in. It is much safer to put something on a credit card when you have enough Cash Flow to cover the interest payments. And it helps provide a rhythm to life where one can pay the bills on a regular basis, and (hopefully) leave time to enjoy a few things money can’t buy.

For people with employee mindsets, financial freedom means having the security of a regular paycheck. It means having money to pay the bills, and perks that pay for luxuries. That’s why they like to get benefits such as medical or dental insurance, access to company cars, and employee discounts. Unions can sound like a good idea to employees when they feel like they have little or no power in the workplace, and pensions are popular because they are meant to reward years of loyalty and service. Employees are happiest when they believe their jobs serve a higher purpose, know the right way to do things, and can make sacrifices for their honor. They like to know their place, play by the rules, and hope to be rewarded with recognition, promotions, and bonuses when they do good work.

Unfortunately, the kinds of rewards that employees opt for are often red herrings. For example, pension plans tend have appeal for employees due to their incentives for staying with the company. Pension fund managers have discovered that retired workers live 2 less years for every year they work after age 55. By age 65 and depending on where they live employees who retire are only expected to live to age 67 (male) and age 69 (female). If they retire at 55, men tend to live to be 77 and women 82. But because employees expect to be rewarded for loyalty and service, pension funds offer graduated incentive plans to keep working after age 55. Not every pension is like this, but it is a real-life example (from Boeing) of what employees are willing to sacrifice: It seems they are often willing (in effect) to cut their lives short in order to get financial security for a little while at the end, and respect for keeping their jobs.

The typical entry level employee gets few (or no) benefits, low paychecks, and a sense of being disposable. This leads to an employment arrangement wherein the employee does just enough not to get fired, and the employer pays just enough so the employee doesn’t quit. Obviously, employees in this situation are not going to be very happy about going to work. But at least they have jobs.

At the other end of the spectrum, there are employees who have high-paying jobs with plenty of perks and benefits. They are typically willing to sacrifice their families, their health, or even their self-respect to make that bonus or get the coveted title of “rainmaker”. They are loyal, committed, and demonstrably competent. They take orders well, understand the rules, and occasionally have constructive suggestions. These employees usually get put in charge of the employees mentioned in the previous paragraph, and are often expected to train them. They usually like being ranked higher than others, and are willing to enforce social hierarchies. People below them may or may not like them, but at least they get to keep their jobs as long as they please their bosses.

These days, job security is mostly a myth. Employees sometimes get downsized or shuffled out. They may lose a job because there are fewer positions to fill and the least competent employees are being let go. This happens quite regularly as a result of business and economic cycles. Those employees who were just holding onto jobs in order to pay the bills are often the first to go because they are less willing to work as hard or as well as other employees. Social assistance and employment insurance programs are intended to help people already committed to the employee mindset.

Independently Self-Employed

There are times when having a job can make a person feel like an automaton. And while the stability and security of a regular paycheck can make life a little easier, a growing number of people would rather not have to look to employers for work. These people are quick to point out that the word job is an acronym that stands for ‘Just Over Broke’. They are eminently practical, and refuse to buy into the myth of job security. Being masters of their own destiny is far more important to them than perks and benefits. Besides (they point out) those perks and benefits are coming off your paycheck anyway. Why not be the one who controls that money, instead of your boss?

Financial freedom means not having a boss to these people. It means making your own decisions and serving your customers in the way you think best. It also means taking responsibility for one’s final output. In order to get repeat customers, the Independently Self-Employed person must cater to their needs and deliver on his or her promises. So while the boss is out of the picture in a hierarchical sense, the customer takes the boss’s place. The connection to the customer is often much more direct than for Employees.

Often, people who are tired of looking for work or have recently lost a job will attempt to go this route. In fact, since 1972 the number of Independently Self-Employed people in Canada and the United States has grown from an all-time historical low to being surprisingly common. This has corresponded with the rise in the number of specialized knowledge workers; increased numbers of women in the workforce; corporate downsizing; and governmental reorganization. A person who has been put out of work; who craves independence over stability; or simply can no longer buy into the employee mindset, is likely to entertain the idea of becoming self-employed.

Independent Self-Employment is a strategy that is shunned by the school system because it means stepping out of the hierarchically structured world of academics. It is not favored by churches and religious organizations because it means being willing to question authority and make decisions for oneself. At times it can fly in the face of traditions, and create a sense of insecurity when it comes to child-rearing. It is not an easy social path to take, and yet people who take it commonly report that they are happier and more fulfilled by their work than employees.

Less people succeed at Independent Self-Employment than at being an employee. Many find that it is much harder to succeed financially without the benefits of a regular paycheck. But others find that they have more time and money than they did while working at a job. They also find that personal habits, especially regarding health, have a magnified effect on their financial situations. Without the structure a job provides, they go through periods of floundering mixed with periods of clarity and focus. The successful ones spend more time focused than floundering, whereas the rest tend to flounder until they have no choice but to go back to having a job. Independent Self-Employment requires a clear vision of what you want to do, persistence, and knowledge of who will pay you to do it.

Team-Oriented Self-Employed

These days, specialized knowledge is often needed to complete projects. But once a project is done, the person with the specialized knowledge is no longer needed. Ad-hoc teams are often formed to complete projects, and the people who get selected for the teams must be able to collaborate effectively. There is rising demand for people who can fill roles on such temporary teams in today’s global economy, and they do not fit the profile of employees in the traditional sense. They move on to other projects, with other teammates and customers, when projects are complete. They are simultaneously team-oriented and self-employed.

To the Team-Oriented Self-Employed person, financial freedom means having options available to work on new projects that pay. They want to work with other talented, specialized people. It is often (but not always) a prerequisite for these people to be independently Self-Employed first, and have proven abilities in there chosen field. They also need to be able to work well with others; participate constructively in group decision-making processes; respect the value of what others contribute; and be willing to share the in the spoils of a team effort.

People with this mindset tend to be highly adaptive and enjoy creating connections. To them, independence is a prerequisite for interdependence. Alone, they are subject to the same challenges as the Independently Self-Employed. But as part of a network, they are more robust and can respond to opportunities more effectively and profitably. As a result, they tend to make more money; take longer vacations; and spend more time with their children than either Employees or the Independently Self-Employed. They also tend to be more interesting conversationalists.

Business Owners

The main drawback that employment and self-employment have in common is what happens when you get sick? When employees and self-employed people are unable to work, they stop making money. For a Business Owner, that sounds like insanity. Money should keep coming in whether one is working or not, especially when one gets old! Business Owners set out to establish cash flow that is independent of their presence.

To the Business Owner, financial freedom is the ability to take time off and still have money coming in. So they set up self-running systems for that earn money for them. Those systems are called businesses, and usually take the form of corporations. It has been said that you are not truly a Business Owner until you can go away on vacation for several weeks, and when you come back your business is running better than if you had stayed home. Sanity, to a Business Owner, is working towards this goal.

Business owners don’t work in businesses, they work on them. Yes, they are very likely to be able to perform every task in a small business. But they do not see performing those tasks as an effective use of their time. They would rather work out how to perform those tasks and then get a person or a machine to carry them out. Once the system is up and running, they find incremental ways to keep making it better.

Some business owners set out to leave a legacy. They are interested in taking the profits from their businesses and putting them towards worthy causes. Examples include Paul Newman’s line of salad dressings; the line of fine cheeses and wines called “Monks Own” started by Sir Murray McCans; and the Bill and Linda Gates foundation.

The Holy Grail for the Business Owner is to develop a business to the point where it can be sold. Some businesses are sold on the stock market; some are sold to other businesspeople. What they all have in common is that they are systems that not only serve customers’ needs, but also produce money whether the owner is there or not.

Investors

Investors are interested in owning pieces of businesses. Owning a business can be profitable, but Investors are not usually interested in starting, running, or working on a business. They are more interested in finding ways to get their money to grow. In this sense, Investors are more like farmers than Business Owners. The money they put into a business is like a seed that they hope will grow and produce fruits.

To an investor, financial freedom is a technical term. It is a state of being where your income from investments exceeds your expenses. In other words, your money needs to be planted where it will grow and produce enough fruits for you to live comfortably. Of all the meanings people ascribe to financial freedom, this is the one that is actually based on something that gives you freedom. It meets more of the various definitions of freedom than any other mindset, and provides a person with a clear goal.

The Investor’s definition of financial freedom is easy for many people to understand in principle, but terrifying in practice. Lack of knowledge, moral shackles, fear of poverty, and low self-esteem can all play roles in the mistakes people make while learning to invest. Nonetheless, investing is a skill and finance is a technology, so most people can learn to apply them effectively. It’s just a matter of putting your mind to it, and letting go of the mindsets that have held you back.

Choosing Your Money Mindset Wisely

Money Monks find it exceedingly difficult to achieve financial freedom because they must maintain the illusion that money is somehow beneath them, all the while having to use it. Emotional Spenders are constantly destroying their financial freedom because they spend everything they’ve got, and more. Avoiders miss the ball on financial freedom because they refuse to learn how to get their money to work for them. Hoarders are trapped by the fear of poverty, and so never risk losing what they’ve squirreled away.

Employees cannot stay employees and achieve financial freedom because they have to go to work in order to get paid. Self-Employed people, whether Team-Oriented or Independent, are always looking for the next contract and so they find financial freedom to be fleeting. Business Owners are in a similar situation until their businesses can run themselves.

But when a business runs itself and pays the owner enough to live comfortably without working, the Business Owner attains financial freedom. Investors develop skills and expertise in making money grow and bear fruit, which makes achieving financial freedom more likely for them in the long run than any of the other mindsets.

Not every mindset will result in a long, healthy life of freedom. The mindsets you adopt and apply in your own life are your choice. How your financial situation changes over time tells you how well your money mindset is serving you.

* This is the first in a three-part series on achieving financial freedom. The second article can be found here.

Bibliography

The following materials can help you to enjoy the benefits of a healthier Money Mindset, as well as understand the impact your mindset has on your family and community.

Books
- Rich Dad, Poor Dad
- Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom
- Get Smarter: Life and Business Lessons
- Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth
- The Millionaire Mind
- The Millionaire Next Door
- The Richest Man in Babylon
- Who Moved My Cheese?: An Amazing Way to Deal with Change in Your Work and in Your Life

Documentary and Other Video
- Richard St John – Success is a continuous journey (video, free online)
- Buffett and Gates Go Back to School (DVD for purchase)
- Dan Ariely asks, Are we in control of our own decisions? (video, free online)
- Nobelist Daniel Kahneman on Behavioral Economics (video, free online)
- Philip Zimbardo prescribes a healthy take on time (video, free online)
- Philip Zimbardo: The Time Paradox (video, free online)
- Robert Shiller’s Full Lecture On Behavioral Finance (video, free online)
- Dan Ariely on our buggy moral code (video, free online)
- The Drunkard’s Walk: Leonard Mlodinow (video, free online)
- Stuart Wilde – Mastery Of Money (video, free online)

Audio
- The Science Of Gullibility: Why We Get Duped (free online)
- Using Psychology To Save You From Yourself (free online)

There is a lot of misinformation out there, and a lot of differing views as to what works when it comes to food choices and eating. So I did a survey of the literature and picked out several books, audio programs, and videos to identify the most sensible choices. I then compiled 12 rules of thumb (some borrowed, some derived) that have made an enormous difference to my overall health, energy level, clarity of mind, and self-confidence.

Here are 12 (functional) rules of thumb for navigating the grocery store:

1. Get the majority of your calories from organic veggies and fruits. Food grown industrially (in chemically fertilized soils) is very low in nutrition and can take as much as 5 times the volume to satisfy your body’s needs for trace minerals and essential nutrient combinations. Buy food specifically for the nutrient density, with the fewest number of environmental toxins.
2. Eat only free range meats grown on organic farms. Essential fatty acids found in animal fats are critical to avoiding diseases such as Cancer, Alzheimer’s, Parkinson’s, and so on. But the fats of animals who eat grains grown in chemically-fertilized soils lack these beneficial properties. Plus, the hormones used in beef and chicken production have been causally linked to a myriad of epigenetic diseases.
3. Don’t eat any refined sugars, especially high-fructose corn syrup. If you get more than 10% of your calories from any combination of sugar molecules, you are actively feeding the cancer cells that already exist in your body and putting a huge undue strain on your immune system to cope with them. High-fructose corn syrup can be more addictive than cocaine or heroine (especially in children), and is a leading cause of behavioral problems in both children and inmates. In adults, alcohol and refined sugars are the leading causes of adult onset (type-II) diabetes and have been linked to child abuse.
4. Never buy anything that has more than 5 ingredients. This includes foods bought in the deli. Statistically, this simple rule will help you to steer clear of pretty much everything harmful in the grocery store.
5. If a food product makes a health claim, don’t buy it. Healthy food does not need to make claims.
6. Never purchase anything fortified. Fortified foods are fortified because the nutrients have been taken out of them. This includes baby formula (see Failure to Thrive). For example, white flour is typically fortified with iron. That means all the natural, biologically available iron was taken out of it during processing. Fortified foods are not really food.
7. Treat processed foods like condiments, not foods. Two great examples of processed foods are bread and pasteurized milk. Bread was the first processed food, technically speaking. It was a good way to get the essential fatty acids that we used to get from animal fats, but then bakers started to chemically alter it by bleaching the flour. Bleaching removes color and nutrients. When you pasteurize milk, you destroy the molecules that help your body to fight off disease and replace them with molecules that are not digestible by humans. Plus, if the MCM6 gene is expressed in you like it is in most of the world’s population, you will have trouble digesting the lactose and other molecules found in milk anyway.
8. Do not make your food purchases based on nutritionist bias. While having all the right nutrients in your diet is important, if you do not consume them in the combinations found in nature your body is not equipped to deal with them. Nutrients in food work synergistically, and nutritionism (as a philosophy) overlooks this fact. A diet of corn and beans works well, covering the fats, carbohydrates, and proteins needed by humans to thrive. But if you replace the corn with fortified flour products, the same nutrients are found in the diet but the health of the eater is significantly poorer.
9. Really old recipes are usually the best. Traditional recipes from before 1900 are generally the healthiest, and hardest to find. Nonetheless, they are worth looking into. Aside from being interesting to cook, they usually taste really good.
10. If you can’t buy an ingredient on its own from the same store, don’t buy products that contain it. If you can’t pronounce something on an ingredient list, the same rule applies. Chemicals are not food.
11. Only heat oils that can be heated. Olive oil is good for cooking, but flax oil is not. Heated flax oil becomes linseed oil, the same stuff used to make your furniture shiny. Linseed oil is toxic to humans.
12. Don’t eat trans-fatty acids to lose weight. Even though trans-fats are produced in the body and can be found in some foods naturally, it is actually a poison. The human body can only process a microscopic amount of trans-fat safely, and produces a myriad of toxins from excesses of it. Plus, your body may try to store it as fat like it does with other toxins.

The Basics of Weight Management

It’s hard to talk about food these days without the subject of weight-loss coming up. Keep in mind that extra calories are stored as fat, and the way to reduce your fat reserves is to burn more calories in a day than you take in. But it doesn’t take that much exercise to stay healthy (just 20 minutes a day) if you are making wise food choices. Plus, being too thin is just as bad as being overweight.

Most North Americans try to avoid eating fat and end up satisfying their cravings for nutrients missing from their diets by eating fortified foods stuffed with sugar. Typically, they get 25% of their calories from refined sugars. Therein lays the cause of overweight: Your body will continue to feel hungry until you have topped up sufficiently on the nutrients your diet is short on. Therefore, the key to staying at your healthiest weight is to only ever eat until you are 80% full, stick to nutrient-dense foods, and keep sugars to just10% of your total calories.

Utilizing Sources of Food Information

Below is a list of my sources. You’ll note that there are a couple of fad diets on the list. After looking at the science of how the body processes food and utilizes it, my opinion is that none of the popular diet programs I looked at were worthwhile on their own. There were a few good ideas in them, but for the most part they tended to dwell on limited subsets of information. I chose to include them on my list because they do offer some useful information, but I would only recommend them in conjunction with at least three others.

In fact, if I was to offer one more rule of thumb it’s this: Avoid Following Fad Diets. Just listen to what they have to say, and compare it to the 12 rules of thumb. If the diet encourages you to break the rules listed above, or pushes you to use supplements of any kind, you know it’s a dud.

Here they are:

1. Nancy Clark’s Sports Nutrition Guidebook – 4th Edition
2. The Zone: A Dietary Road Map to Lose Weight Permanently : Reset Your Genetic Code : Prevent Disease : Achieve Maximum Physical Performance
3. Andrew Weil, M.D. – Eating Well for Optimum Health
4. The Fast Track One-Day Detox Diet: Boost metabolism, get rid of fattening toxins, safely lose up to 8 pounds overnight and keep them off for good
5. In Defense of Food: An Eater’s Manifesto
6. Free Videos: Jerry Brunetti – Food as Medicine Part 1, Part 2.
7. The Metabolic Typing Diet: Customize Your Diet to Your Own Unique Body Chemistry
8. Nutrition & Behavior by Dr. Russell Blaylock
9. Free Videos: Supermarket Secrets Part 1, Part 2.

Three More Gems

In many cultures, people buy food not for appearance but for flavor. This is a really good policy to take with you to the grocery store. Flavor is nature’s way of telling you that something is good (or not good) for you. If a food lacks flavor, it probably lacks nutrients as well.

One current fad is centered on Omega-3 fatty acids. These molecules are important because they are used to by the body to build brains, and are not produced in the body. This doesn’t mean you should eat brains (organ meats are generally not a good idea), but it does mean you need to include them in your diet. The typical North American consumes a ratio of 1:20 Omega 3 to Omega 6.That’s not good – 50% of them will get Alzheimer’s! To maintain healthy cognitive abilities, humans need a ratio closer to 1:3. The easiest way to to achieve this is to read the food label. The higher the Omega 3 content in relation to the Omega 6, the better. Just don’t overdo it.

An excellent resource for looking into the nutritional value of foods is: NutritionData.com. I personally like it because it goes far beyond what any government or government-sponsored organization will tell you about food, and it has several features that help users make smart food choices.

Happy eating!

In Turning the Mind Into an Ally, Tibetan-Buddhist Monk Sakyong Mipham describes the Meditative Journey through the levels of consciousness. From resting your mind upon life, to arriving at a state of “peacefully abiding”, he describes each level in such a way as to provide the reader with a roadmap. As my own experience has born out, it is an accurate one.

My friend recently fell in love with someone 30 years younger than her. She was 51 when she found herself so driven by her passions that she confessed them to the young woman she had fallen for. Touched (no doubt), and very intoxicated, the young woman responded with “I love you, too?” At this point my friend started planning the wedding.

When you sit down to meditate, there are some simple instructions to follow. The most important one is to rest your mind on your breathing. If, at any time, you forget to follow the instructions, you simply return to following them. As you begin to master it, you find that your mind is distracted quite easily! Then you start to notice that thoughts distract you from your focus. As you get better at focusing, your mind gets stronger.

It lasted for two weeks, and there was definitely no wedding. At first my friend was utterly confident that her beloved younger woman would come back and talk. And they did talk a few times. But then my friend was upset when she couldn’t bring herself to see the younger woman’s indifference towards her. All the pondering and imagining she had done about wonderful loving things to do together were all for naught.

As you meditate, you gain the ability to let go of thoughts more easily. This seems rather strange because most people hold onto their thoughts. We create our identities from them: “Doctor Reginald Smith, M.D.”; we create our world with them: “Architect-Inspired Home Design”; and we perceive others through them: “Doesn’t everyone like ice cream?” First, you let go of thoughts about life. Once your thoughts become about creating or changing things that are outside of your influence, you are at the “Fantasy” level of consciousness. Below that are emotions, discursive thoughts, subtle thoughts, and finally peaceful abiding.

“I just can’t understand why she doesn’t think about me as often as I think of her,” bemoaned my friend. “I think about her all the time!”

In my meditation practice, I looked for evidence that I had interpreted the level of consciousness that Sakyong Mipham calls “Fantasy” correctly. I watched for the landmarks he mentions, remembering to follow the instructions as well as I could. Having experienced the journey, I believe I do understand what he means: By fearlessly letting go of your fantasies, you gain greater clarity regarding your life and therefore a more powerful ability to manifest.

Fortunately, my friend seems to have moved on with the help and encouragement offered by her circle of friends.

The health of the body is also the health of the mind. The inverse is also true: the health of the mind is the health of the body. The one to one relationship of psyche and soma is explained further in the Body-Mind Equation. Athletics gives us a window in which to examine this further. In this entry I will use meditation, massage, and long-distance running to explore the nature of that connection.

Long-distance running is a kind of meditation that strengthens both the body and the mind. The energy it takes for the mind to hold a thought tightly is energy wasted when you’re running. It is wonderful to combine a running program with massage. When you let go of tightness held in your muscles, you also let go of thoughts. Winning the mental game of running helps you to with the physical game. Adding massage can make a major difference to both.

After running for a while, your body just knows what to do. You no longer have to concentrate on every step, every turn, every dodge. You can leave the worries of your life behind, get outside, and enjoy your run. Once you’re on your way, your mind becomes free to look at the other runners, the scenery, or the way that an elderly couple holds hands. Your mind looks for a place to land. This is the first new level of consciousness that comes with running.

The instructions for meditation are really quite simple, and always come back to placing the mind upon the breath. As you run past the old couple holding hands, you may begin to imagine that they are in love. You suspect that they were probably high-school sweethearts, judging by how natural it seems for them to be together. It is not an unreasonable assumption, but is completely your own fantasy. You remember to focus on how you’re moving. Running has brought you to a second level of consciousness.

When a muscle becomes too tight, it hurts. Muscular tension can be held in the body for years, and eventually the body hardens and changes to accommodate it. Massage is often used to help muscles release tension. When muscular tension is released, emotional issues can surface. For example, after releasing tension from your lower back, you might find that financial challenges seem less like burdens and more like reflections of your inner strength.

Having passed the elderly couple, your mind looks for a new place to land. Once again, you focus on how you’re moving. You bring your mind back into your body, where you find that you are enjoying running. You feel good about yourself, and love the sensation of being healthy. You are motivated to continue. You have arrived at a third level of consciousness.

Searching the body, a massage therapist can find where tension is stored in the muscles as knots. When you apply enough pressure to a knot, a kind of “overload” signal is sent to the brain. As the brain attempts to release the muscle, the muscle cells start to twitch rapidly without moving the muscle as a whole. Simultaneously, the mind becomes focused on releasing the muscle. And when the muscle is released, often so is a negative emotion or resistance to something important.

As you continue running, you begin to feel random pains in your body. It might start with your shoulders because that’s where you carry tension. It takes a lot of energy to carry that tension, but it won’t go away until you can focus and let it go. The only way to get past it is to focus on releasing the muscle. Eventually, you can get the pain to flicker away and enable the muscle can move freely again. Running has brought you to a fourth level of consciousness.

As the massage therapist moves a thumb along the length of the muscle, tissue that makes the muscle stiff and brittle gets broken up. With the right combination of nutrients, rest, etc., the muscle will become “buttery”. Then when the massage therapist moves a thumb along the muscle, it seems to part like water. The muscle is still there but it is suppler, can repair itself more easily, and functions better.

Once the kinks have all been released, your run becomes much easier. Still, some of the elusive ones try to come back. Now you focus on the ease with which your body moves. When they arise, you let them come and go but you continue to rest your mind on the fluidity of your movement. When you need to, you focus on belaying their detrimental effects. You have arrived at a fifth level of consciousness.

Almost every bone in a supple, healthy body can be felt with the fingers. There is no pain in experiencing touch. The muscles and other tissues easily move aside like water, and allow the fingers to pass. Your muscles are only tense when it is necessary, rather than clasping onto feelings from the past. You body has become clear, and so has your mind.

On a good run, your body also becomes clear. Thoughts no longer slow you down by taking up energy, and you move with natural grace and rhythm. Your shoulders carry joy, and every cell in your body is energized with life. The mind abides the basic goodness in you as well as in the world. Here then, is a sixth level of consciousness.

These six levels of consciousness are also found in texts on meditation. For those who have experienced both, there is absolutely no mistaking them. Running and massage can be used not only to strengthen the body, but also the mind.

The relationship between mind and body, although seemingly very fundamental in nature, has been an important question for centuries.  But what is that relationship? And why is it so important to understand it?

One of the most notable thinkers on this question lived in France during the colonial period of European history. His name was Rene Descartes, and he is famous for his assertion, “Cogito ergo sum,” or “I think, therefore I exist”. His argument was that the senses can deceive the mind, and that you can only be sure of your own existence so long as you are thinking.

But if senses are of the body and they can play tricks on the mind, then where is the mind? The separation of psyche and soma has been a question that has influenced science and medicine ever since Descartes wrote his first meditation in the mid-17^th century. It was an idea which came out when science was still in its infancy, and human anatomy was first being documented (often illegally, from corpses) by physicians.

Now fast forward to the 1970s. By then, medicine had reached a point where heart transplants had become routine operations. Literally, the heart of one person could be removed and placed into another person’s body, and continue to live. This is not a simple procedure, but it was one that scientists and physicians understood well enough to perform successfully.

It was during the 1970s that patients who had received new hearts began reporting changes in their tastes, personality, and their memories. There is some neural circuitry (brain cells, essentially) found in the heart that gets transferred with the rest of the organ. They have been shown to have memory. And it seems that between 5 and 10 percent of people who receive heart transplants report memories that are attributable to their donors.

To learn more about the real-life experiences of heart transplant patients and their families, watch this 50-minute documentary: Mindshock: Transplanting Memories. It explains that neural circuitry gets passed to the recipient from the donor, and that the recipient then has a piece of the donors mind in them afterwards. Along with the soma comes the psyche, and what gets transferred along with the organ are called memes.

Memes are essentially patterns of electromagnetic energy that light up in your body under different circumstances. They appear to us as thoughts. A meme could be the little voice that tells you not to have another chocolate bar because you’re trying to lose weight. So long as you are thinking, you are lighting up memes. And because they are lit up, they affect how you see the world. What you think affects what you sense, and what you sense affects what you think. And what you think guides your behavior.

In the early part of the 20^th century, another philosopher named Bertrand Russell stated what I like to call the Law of Reciprocal Causality: “A man’s philosophy is greatly influenced by his circumstances. However, conversely, a man’s circumstances are also greatly influenced by his philosophy.” In other words, how you think shapes your life as much as your life shapes you. It turns out that this is also true on the physical level – the level of your memes.

In different circumstances, some memes will get lit up while others will remain dormant. Whether it is another meme or something in the environment, the energy pattern that appears in the body makes changes to the body. They may be at the level of the cell, such as when a mood or an emotion sweeps over you. They may also be at the mechanical level, such as when you lift your arm. No matter the level, memes are responses and you have the ability to choose your own responses.

Particular circumstances light up particular memes. Since you cannot have patterns stored in your body for every specific circumstance, memes are more complex than the things that trigger them. This allows for a kind of generalization in which people apply responses to analogous and similar situations. Unfortunately, most patterns are dysfunctional in most circumstances other than the ones in which they worked. It is the contrast between the memes held in the recipient’s body and the memes carried in the donor’s heart that recipients (and people close to the recipients) notice.

So is a heart-transplant patient the same person afterwards? No. But pieces of two people survive, and therefore have the potential to pass on parts of their own memes to other human beings. Memory cannot be localized to just one neuron, or even a set of neurons. Memories are distributed throughout the neural system, and hence throughout the body. What the donor gives is an organ which contains pieces of many patterns.

Mental clarity is the result clarity in the body. Have you ever had a massage that left your muscles feeling like butter? One of the most effective treatments for anxiety is progressive relaxation, where you systematically go over each area of the body and let go of muscular tension. Where do you carry stress in your body?

And what happens to stress when you release the muscles that were carrying it?

The body-mind equation is simply that your body is your mind. When you cut a person up and look inside, it is impossible to find the seat of consciousness. The further into the brain we go with a scalpel, the less likely we are to find anybody home. When the meme that asserts the mind is somehow separate from the body is lit up, when it excludes competing memes from consciousness, it is impossible not to imagine that the mind is like a body part… and not the result of an entire body. Transplant patients teach us otherwise.

Self Esteem is the Measure of the Resourcefulness of one’s beliefs.

My father was a noteworthy engineer in Canadian history.  He was intelligent enough to design hydro-electric dams.  Several of them, in fact.  I was a very fortunate child to have a father like him because when I was very young, he taught me about the scientific method for gaining knowledge.  And I can’t even begin to tell you how often I’ve benefited from it in my life.  He taught me a resourceful belief – one that has led me to generate desirable results.

To my constant surprise and amazement, there are people who believe that the scientific method is not a resourceful belief.  Often, it is simply not something that they’ve ever considered or had presented to them.  When demonstrated, it pretty much makes sense to almost everyone.  And yet, there are still some people who reject it on theological grounds which, to me, appears to be an unresourceful belief.

Beliefs Set Your Path In Life.

Since I am disinclined to look at spirituality in the same way as the church, you are unlikely to find me attending one.  By the same token, there are people who wouldn’t miss a day of church.  They don’t just go to worship, they also go to be part of a community.  To gain acceptance in that community, I might need to change my beliefs to be more in line with theirs.  The same might be true if one of them chose to attend an academy of science.

Because my beliefs led me to finish University, they produced at least one desirable result that I wouldn’t trade for anything.  They set me on that path, rather than a path that would have had me studying bibles instead of lecture notes.  And they have led me here, writing these thoughts in the hopes of sharing them with you.

Change Your Beliefs to Change Your Results.

As I was developing the Mastermind Course web site, a good friend of mine made a suggestion that certainly garnered support from other things that I had learned.  I was inclined to believe in his suggestion.  What he was advocating would have lengthened the landing page dramatically, and I was interested to know what length would lead to the highest number of sign-ups.  I decided to look for an example where someone had actually tested to see what works best.  I found a study that used the scientific method, and got my answer: Shorter is better.

I built the first landing page short, then tried my friend’s suggestion and built the second one long.  Sure enough, the shorter one resulted in slightly more sign-ups.  So I changed my mind.  I chose to believe in something different than my friend’s suggestion, and generated more desirable results because of it.

The key to power is to choose your beliefs wisely.

All your beliefs are true to you, because you believe them.  So it’s a kind of trap to evaluate beliefs on their truthfulness, because you will always be right and everyone else will only be right insofar as they agree with you.  The rest of the time, everyone else is wrong.  But you are never wrong.  And they don’t agree with you because their beliefs are always true to them, too.  The trap comes when your beliefs lead you to disaster and you can’t change them because you require them to be true, rather than resourceful.

Since our beliefs lead to results that we can identify in our lives, it is resourceful to be able to change them so that they produce better results.  If a person’s ego gets bruised, their self-esteem gets lowered.  The ego holds in it a set of beliefs about the world and about the self, and when those beliefs are dis-proven the ego feels hurt.  One of the results of holding those beliefs was pain, and another was lower self-esteem.  Therefor, self-esteem reflects the resourcefulness of your beliefs in creating desirable results in your life.

…more to come.

With over 30 years of scientific research to back him, Paul Ekman has identified the “normal” rate at which people accurately read other people’s emotions.  You guessed it.  Around 60% of the time, normal people are projecting what they think the other person is feeling.  Fortunately, they’re getting it right about 40% of the time and that seems to be enough to get by.  Personally, I want to do better than just “get by”.  Check out his web site, there’s a way to improve your accuracy.

But so what?  If 40% is enough to get by, and I’m doing just fine, then why bother?  Good point.  Let’s look at the results you’re getting.  First, 40% is the average.  Are you routinely in the top 50% of the class when it comes to the health of your relationships with other people?  With a little digging, it becomes extremely hard to tell.

Plus, one tends to become emotionally involved with social evaluations.  Upon the receipt of a message, the first area of the brain to respond is not the centre for reason, but the centre for emotion.  In Social Intelligence, Daniel Goleman identifies that people’s true emotions show on their faces for about 1/10th of a second before their rational brains kick in and make adjustments.

He also explains the way in which mirroring cells function to connect us socially, through empathy with each other on an emotional level.  Generally, the rational brain can detect what other people are feeling by feeling how the face reflects their emotions back to them.  In a nutshell, the social is fundamentally emotional because it is felt.

To transform your social life, transform your emotional life.

Today, I learned that something was obstinately getting in the way of my accomplishing a certain, important goal.  This angered me, and I realized it quickly.  To put it to rest, I began to look for ways to re-frame what had just come up.  After mulling it over and finding myself frustrated, I realized that I was trying to view the problem very subjectively.  It was in the midst of mulling that I happened to glance into a mirror and see the look on my face.  I wasn’t angry, I was sad.  I just didn’t recognize it until the mirror provided me with the opportunity to see it objectively.

It leads one to question how often one gets it wrong when one is trying to identify one’s own emotions, and it speaks volumes about the value of feedback.  Frankly, I was relieved to learn why I had (up until that point) been unable to solve the problem: All of my attempts were futile because I was trying to deal with sadness using tools that are meant for dealing with anger.  Although I have tried using a crescent wrench to drive in a nail in the past, I’ve always had much better luck with a hammer.  When I switched tools, the issue transformed in my mind.  I was no longer dealing with a limiting belief and as a result, workable options opened up almost immediately.

I had to see myself in the mirror to get it right, and since a reflection appears as another person, it leads me to suspect that the proportions are probably about the same: 40% accurate, 60% inaccurate.  The habit of projecting our thoughts and feelings, stories and values onto other people must be extremely rampant if that were the case.  And by acting on those beliefs, we continue to produce the same results in our lives.  But by improving the accuracy with which one can read other people’semotions, one can simultaneously increase the accuracy with which one can read ones own emotions.

To accurately know your emotional life, learn to read emotions accurately.

A transformation took place in my life because I was willing to step outside of my subjective reality.  I let go of the belief that I was feeling anger, and realized that I was feeling sadness instead.  The first belief was true to me because I believed it, but not after I learned to see past my inner turmoil to what I was actually feeling.  Upon seeing the way I was holding my face, the truth was revealed to me.  Upon changing my belief, I was able to produce different results.

To transform your emotional life, transform your beliefs.

By gaining awareness of my (subjectively) poor ability to read the emotions of others, I also gained awareness of how poorly I was reading my own emotions.  By developing skills to read emotions more accurately, I was able to identify my own emotions more accurately.  By reading my own face in the mirror, I was able to take action by changing my approach.  Looking back, I clearly generated much more desirable results than I would have otherwise.

The best part is: Now that I’ve done it, I believe I can do it again.  So I can!