You cannot look at the great reset without looking at freedom, and what it is. What is personal freedom? Besides basic things like having your human rights respected, and being able to travel and to move around freely, this also involves having your personal finances under control.
So this is an article about the basics of financial freedom. If you already know a lot about this, it might be too basic for you. If not, bear with me. The main aspects of personal financial freedom are first to get out of debt (if that applies to you) and second to work with a structured financial system.
If you are really in debt, you are not free. You can end up in a position where you spend your whole life paying off your debt, without every reaching some level of financial independence. A personal bankruptcy of this type can cause you to become a slave to your debt.
As I mentioned in a previous post, we are now in a situation where 1% of the world population owns as much as the other 99% combined. How do they do that, this rich 1%? One of the reasons is that they used compound interest to their advantage.
Whenever you have earnings, you will earn interest on your savings, and the power of compound interest works in your favor. Whenever you have debts, you will pay interest on your debts, and the power of compound interest works against you.
This is very basic stuff, but it is important to fully grasp this, because then you will understand the absolute necessity to get out of debt. I am not talking about borrowing money to build a house or start a business; I am only talking about debts related to badly managed personal finances.
The first thing you need to do when you want to find financial freedom is to do whatever it takes to get rid of your debts. Find a job, find a second job, sell stuff you don’t need anymore, look for help, find ways to live cheaper. Get above zero, so compound interest is no longer your enemy.
Once you are above zero, every month, I encourage you to adopt the system which is described in an old book, The Richest Man in Babylon, by George S. Clason. You can download a digital copy for free if here you want more background information.
The system described in this book is very simple:
- Learn to live on 80% of your income.
- Save 10% of your income for your pension or unexpected setbacks.
- Give 10% of your income to charity (tithing).
There are many famous people who use this 80 / 10 / 10 system and are very fond of it. When you have the discipline to get out of debt, you will also have the discipline to learn to live on only part of your income, and then you can make this system work for you.
Maybe you can’t start with living on 80% right off the bat, then do this in steps. 96% for living, 2% saving, 2% giving to charity. Why is it so important to give to charity? Well, besides raising your self-esteem, and quite possibly improving your karma, you will bless the world in a positive way.
It tremendously benefits communities if everyone who can afford it spends 10% of his income on charity, on giving to those who are in need. By doing this, you will live in a better community. You will help to create a better world for everyone to live in.
So if this all applies to you, take a look at your financial situation. Get out of debt, and then work towards using a system to manage your personal finances, in a way that benefits you and benefits the world. This is the path to financial freedom and personal freedom.