“If you don’t have control over the flow of your money, money has control over you.” – Ann Wilson
Most of us are what Ann Wilson, author of The Wealth Chef, describes as “TV-dinner money cooks”. A small amount of our income trickles into investments – such an underfunded retirement fund – but most of it pours out into expenses and debts.
“These are the same people who get up every day, work hard for their money to get it to flow into their lives and then let it all pour out of their expenses drawer, pumped out by liabilities. They work for everyone except themselves. They work for the owner of the company where they work, for the bank to pay off their mortgage and loans and they work for the government, giving the taxman the first four to five months of their earnings. Then they work for the retailers, giving them whatever money is left over, for a whole bunch of stuff they don’t need,” writes Wilson whose book provides strategies on how to turn from a TV-dinner money cook into a “wealth chef”.
Unlike a TV-dinner money cook, a wealth chef understands the power of money to create freedom. Wilson describes wealth chefs as people who “eliminate all consumer debt from their lives and at the same time invest in things they understand, such as straight-forward stock market trackers, which provide the opportunity for realistic returns over the long-term, as well as in solid investment properties which return a positive cash flow from day one. Wealth chefs make financial freedom their priority and pay themselves first, by ensuring money flows into their asset drawer first. They understand the power of money invested over time.”
As Wilson discovered in her journey of becoming a financially-free multimillionaire in just 8 years, financial success is 80% about the person and only 20% about the technical skills. Getting your finances in order takes time, effort and energy, but not doing so will “suck energy, enjoyment and pleasure out of your life, as well as prevent you from living the life which you are born to live”.
BOX: A wealth chef’s 5 key wealth cooking tools:
Wealth scales: your income statement. To measure how much you are earning and how much you are spending. To become a wealth chef the income statement needs to be bigger than the expenses.
Wealth scales: your balance sheet. To measure your net worth – are your liabilities (debts) greater than your assets (investments)?
Wealth sieve: your big “why”. Have a clear idea of why you are starting this financial journey and use this to filter your money decisions. It will also provide you with a mission statement to help you stay on track.
Wealth obsession magnet: your financial freedom vision. Imagine what your life will look like when you reach true financial freedom and write it down. A study of Harvard students between 1953-1973 found that 97% of people who had written down their goals had achieved them compared to only 34% of those who hadn’t.
The wealth health certificate: your credit score: Understand and clean up your credit record.
Wealth chef money tip:
Write the following questions on a little card and keep it in your wallet or purse. Each time you are about to spend money have a quick run-through of the questions. You’ll be amazed at the results:
- Is this supporting my financial freedom or not?
- If I choose to buy this, will it fill my wealth pots or empty them?
- Does this support my big why or take me further away from my dreams?
- Will this money choice help me fly higher?