“If you have to finance your recreation, it’s not time to play.” – Chris Brady
We call it “The Money Thing”: the elusive, often difficult mystery of acquiring, keeping, and continuing to produce enough money to be able to live the life of our choosing, While prescriptions and advice about one’s money are as available and varied as diet plans for one’s physical health, financial fitness appears to be as rare a thing as 3% body fat and proper cholesterol. But it doesn’t have to be that way.
The principles of Financial Fitness are available for everyone. Just as with diets for physical health and fitness, where fanaticism and extremism are not only suspect but are unsustainable, so too with financial fitness. What works best is knowledge and application of basic principles. Learning and applying these principles, over time, can produce incredible results. The Financial Fitness Program teaches the Offense, Defense, and Playing Field of personal finance. With a basic understanding of these three areas, which are rarely taught together as a whole, anyone can learn to prosper, conserve, and multiply the fruits of his or her labor.
The following is a summary of the 47 principles of Financial Fitness:
- PRINCIPLE 1: It’s not what you make but what you keep that determines financial success. Pay yourself first and save what you pay yourself.
- PRINCIPLE 2: Money is a gift. It has a specific use. This means that you have a stewardship. You are to use your money for something that matters, for your family and beyond.
- PRINCIPLE 3: Live within your means. Always. No exceptions. Period. Follow a good budget. Give each spouse a small allowance so you have a little discretionary money each month, and don’t nitpick each other on the little things.
- PRINCIPLE 4: Stop getting financial advice from broke people; get it only from those whose finances you want to emulate.
- PRINCIPLE 5: Consistently budget and save for unexpected expenses.
- PRINCIPLE 6: Pay 10% of your income to tithing. Give even if you are really broke. Giving puts you in a mindset of abundance and puts any financial worries in their proper perspective, so it should not be limited to just tithing. The Bible categorizes giving as: 1) tithes and 2) offerings.
- PRINCIPLE 7: Using your time, money, and talents to genuinely help others naturally increases your happiness. Seeking money for money’s sake may or may not influence your happiness, but seeking money in order to fulfill your stewardship and serve and bless others automatically increases it.
- PRINCIPLE 8: People with the right money-view discipline themselves to live the principles of financial fitness, make financial decisions based on a long-term vision, adopt the habit of delayed gratification, and use the compounding nature of money to constructively achieve their dreams.
- PRINCIPLE 9: Financially fit people are avid readers and consistently invest in themselves by increasing their financial and leadership education, skills, experience, knowledge, and ability.
- PRINCIPLE 10: Financially fit people excel at the work and projects they are doing now, and at the same time, they invest in themselves in order to achieve their long-term vision.
- PRINCIPLE 11: Never sacrifice principles for money or possessions. Be honest. Keep your integrity. Keep your priorities in the right order.
- PRINCIPLE 12: Do the work to gain mastery in what you do (usually about 10,000 hours).
- PRINCIPLE 13: Financially fit people don’t ask “Can we afford it?” as much as they ask “Do we really want this? Will it help our purpose and dream? How will it help our purpose and dream? In what ways might it be a distraction? Will it cost more money to take care of it or keep it (through things like insurance or annual fees)? Would saving or investing the same amount be a bigger help to our purpose and vision? Is now the best time for this purchase, or would it be less expensive or just better for our family or business at a later date?” They cultivate a habit of saying “No” to purchases even when they can easily afford them and of putting much of their money into savings or investments instead.
- PRINCIPLE 14: Financially fit people analyze their habits—in life as well as finances—and work to break bad habits and cultivate good ones. They think about and choose the habits they want and need to achieve their life dreams.
- PRINCIPLE 15: Own a business, even if you start out working on it part-time. You can apply all the other principles in this book and obtain wealth over time, but those who apply them in their own businesses can become wealthy much more quickly.
- PRINCIPLE 16: Increase your passive income to the point that 1) most of your income is passive and 2) you can live off your passive income.
- PRINCIPLE 17: Retirement should not be an issue of age but rather a function of having enough passive income to live on for life. Retirement means retiring from things that are not part of your purpose so you can focus your productive work on your life mission.
- PRINCIPLE 18: To really attain financial success, focus on these things: 1) Truly excel in your current job and projects and simultaneously start a business, 2) Put in the 10,000 or so hours needed to gain mastery over your business while still excelling at your current job, 3) Make a plan to become financially free by reaching a point where the passive income from your business more than covers your family’s needs, and 4) Once you are financially free, put your full-time focus on building your business to the point that it funds your life purpose. Each of these requires deep focus, one at a time. Once you have accomplished one of them, go to the next and give it the same level of focus.
- PRINCIPLE 19: Get good mentors and really listen to them.
- PRINCIPLE 20: Use your money productively—by putting it where it will bring you back more than you put in—rather than unproductively. The best investment is in yourself and your own business. Wisely and appropriately use some of your savings to increase your business assets and returns.
- PRINCIPLE 21: Put some money into preparing for a worst-case scenario. Don’t be fanatical about this, but don’t ignore it either.
- PRINCIPLE 22: Build up a regular targeted savings fund for things you want to buy later. Consistently fund this account and buy consumer items with cash (not financing).
- PRINCIPLE 23: Only invest money you can afford to lose entirely in speculations outside your area(s) of mastery. Only invest a little, if any, in such ventures.
- PRINCIPLE 24: Do not ever use your savings to speculate.
- PRINCIPLE 25: Get rid of debt.
- PRINCIPLE 26: If you aren’t financially sound, don’t get caught in the trap of using “business debt.”
- PRINCIPLE 27: Do not use credit cards to build your credit because this almost always leads people to more debt.
- PRINCIPLE 28: Never use title pawning, “ninety-days-same-cash” loans, payday loans, rent-to-own plans, layaway debt, or similar schemes.
- PRINCIPLE 29: See your car(s) as transportation, not status symbols. Save up and always pay cash for them.
- PRINCIPLE 30: Debit cards are better than credit cards for many people, and cash is even better.
- PRINCIPLE 31: Teach your children and youth the principles of financial fitness. Set the example for them. Mentoring them will help you as well as them.
- PRINCIPLE 32: If you are not wealthy, do not get sucked in to using second mortgages.
- PRINCIPLE 33: Use the roll-down method to pay off all credit card debts and then apply it to all other debts.
- PRINCIPLE 34: Learn to be skeptical of advertising, media, and marketing.
- PRINCIPLE 35: Accumulate slowly; build your inventory of resources and wisdom, not stuff.
- PRINCIPLE 36: Get right with God, apply true principles in all areas of life including finances, pursue your stewardship, serve others—and leave impressing others in God’s hands.
- PRINCIPLE 37: Do not use consumer debt. Wise financing for business investment may be okay at times, but consumer debt is like a cancer. Cut it out!
- PRINCIPLE 38: Make memories part of your lifestyle, budget, and life plan. Start simple and add big memories, too.
- PRINCIPLE 39: Be very, very careful as you make decisions about the danger zones: taxes, home ownership, divorce, credit cards, lawsuits, insurance, seeking status, college, addictions, and investments. Get good advice from your financial mentors, and study things in detail before taking action.
- PRINCIPLE 40: If you buy a home, follow the 2X Rule. For example, if your income is $50,000 per year, do not buy a home that costs more than $100,000. If you want a bigger home, earn more money.
- PRINCIPLE 41: If you are not financially fit and you have a bunch of “toys,” it means that you do not really deserve them and you are using your savings or debt on the wrong things. If your debts are all paid off, you are following the savings guidelines listed in earlier principles, and you have the cash, you can buy a few “toys” and still be financially fit.
- PRINCIPLE 42: Studying and understanding free enterprise is an essential part of financial fitness.
- PRINCIPLE 43: Financially fit people who want to maintain an environment that encourages opportunity and prosperity pay attention to the principles of freedom and the ongoing actions of government.
- PRINCIPLE 44: In addition to cash savings, save some of your money in something other than fiat currency.
- PRINCIPLE 45: Study up on investments in metal, and any other investment, before you buy. Do your homework. Take your time.
- PRINCIPLE 46: Invest even more in yourself by learning to be the kind of person who consistently engages in an enterprising, creative, enthusiastic type of life. Fill your days with enterprise, action, and doing things that matter. And teach your children and the people you work with to do the same. Become the kind of person and leader who consistently works on your current enterprise.
- PRINCIPLE 47: Study the strengths and/or weaknesses of your nation and economy (and others where you do business) and wisely consider and prepare for potential economic downturns.
To expand on your knowledge and application of each of these 47 principles, purchase the Financial Fitness Program here.
How has the Financial Fitness Program made a difference in your life? Please share in the comments below.
Financial Fitness: Get out of Debt and Stay out of Debt
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