Author Robert Kiyosaki often urges people to make a distinction between their profession and their business. Your profession is whatever you do for a living. But that shouldn’t be your business. Your business should be to divert as much income from your profession as you can toward building personal assets so that the income from those assets will eventually make you financially free. And he defines financial freedom as having enough passive income (income that you don’t have to work for) from your investments to pay your expenses. Once that glorious day comes, if you work it’s because you want to work — not because you have to work. That’s a much more pleasant way to work. Defined that way, you could achieve financial freedom in a few years if you put your mind to it.
As I travel the country conducting financial seminars, I’ve been thinking a lot lately about Kiyosaki’s profession vs. business concept. Most of the people who come to my seminars work for a living. Many are sent there by their employers to learn certain financial skills. I’m with them all day so I have a chance to talk to a lot of people on a regular basis. When people learn of my background, the subject of their personal finances often comes up. People tell me that they would like to invest, but they just don’t have the time to become financially literate enough to invest on their own.
One of the Charles Schwab commercials that has been running on CNBC features a woman — actually it’s a very realistic animated caricature of a woman — who is frustrated because she has so much going on at work that she just doesn’t have time to manage her own financial affairs.
My question to people who say they don’t have the time is why do you work for a living? Is it just to pay the bills or would you like to become financially free? If it’s the latter then evidentially many people are confusing their profession with their business. It’s a matter of deciding what’s important.
Another well known author, Steven Covey, says that we spend far too much time focusing on what’s urgent and not nearly enough time focusing on what’s important. It’s easy too put off truly important things because they’re not urgent.
The telephone rings and someone wants you to do something for them. That’s urgent, but often unimportant. Someone walks into your office and wants a “few minutes” of your time — urgent, but not necessarily important. You’re pulled this way and that way doing all kinds of urgent things — but never get around to doing what is truly important.
On the other hand, spending time with your kids is so easy to put off because it’s not urgent, but very important. Your marriage, your health, improving your diet, exercising more — all those things can be put on the back burner because they’re not urgent. But they’re some of the most important things in life.
And I think planning for your financial future is extremely important as well. But it never becomes urgent until it’s too late. Don’t let that happen to you. Make up your mind that you’re going to focus on becoming financially free.
Start by with the basics. Get out of debt. Debt is the magical power of compounding working against you instead of for you. Stop spending money on things that are urgent but not very important. Maximize your savings and investments by diverting more income from your profession to your business of building personal assets. And then invest like your financial life depends on it, because it does.
Larry Holmes
