Host Gator

Tuesday, December 20, 2011

The Money Monk Method

      It didn’t take me long to decide that the standard way everybody thinks you should work make, spend and invest your money was NOT what I wanted to do. What did take me a while was figuring out how I should do it. Luckily there are a lot of smart and creative people out there and I borrow heavily from a lot of their concepts. The one thing I noticed though, was that they each only address one aspect of working and financial life, and ignore the rest. They are rarely a complete system. They usually emphasize one of three Financial Lifestyles: Frugality, Income Creation, or Investing. They rarely offer a comprehensive system or lifestyle philosophy that encompasses all 3.

Robert Kyosaki’s  advice to stop working for money and make your money work for you is great. But it’s hard to implement when you are working at McDonald’s and don’t have any money.

Dave Ramsey has some of the best advice about getting out of debt, but then what? It is all predicated on the standard 9-5 job, work 30 years and then retire scheme. NO THANK YOU.

Jacob Fisker and his Early Retirement Extreme method is the exact mindset I was looking for when it comes to breaking free from the 30 year job grind, but what if you don’t want to live on $7,000 a year for the rest of your life?

It is possible to have it all? To get financial independence and a substantial amount of wealth without having to be a wage slave for 30-40 years first?

I think it is possible, and while I haven’t done it yet myself, I have seen plenty of people do it, and applying the right principles has already given me results the confirm the validity of the concept.

The three ideals I am interested in cultivating are Freedom, Financial Independence, and Wealth. This will differ from person to person, and will control what you do to reach those goals.

The basic Money Monk concept is a mixture of the works of all the people I listed above, as well as other, and some of my own personal brand of mad-genius.
It is more of a financial and life philosophy than it is a system, but there are several key principles at the root of it all:

The Money Monk Commandments -An ever-expanding List:

- The 3 main goals are Freedom, Financial Independence, and Wealth.

- The 3 main Financial Lifestyle choices designed to reach these goals are Frugality, Income Creation, and Investing.

-How much you care about each goal will guide how much of each lifestyle choice you implement.

- At some point, you do have to work to earn money. (However, this does NOT necessarily have to be a standard job as most today would describe it)

- Financial Independence is reached when savings reach about 15-25 times your yearly budget.

- Financial Independence can be reached by increasing savings, reducing budget needs, or both.

- The consumer culture is poisonous to freedom and wealth building, and must be discarded.

- Frugality is necessary, but must be targeted and (preferably) temporary.

- You must learn to recognize the real monetary value of items and actions

- Successful investing is situational, not absolute

No comments:

Post a Comment