John Soforic

Wealth is a River

By John Soforic on 01/14/2020

“You can drink of a freedom that few ever taste.” – the Wealthy Gardener

Lesson 5-10 Reminder: Passive Income

Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.” It’s hard to argue that one.

The ultimate rewards of wealth are peace of mind and personal liberty.

“You become financially free,” said T. Harv Eker, “when your passive income exceeds your expenses.” Passive income is a river of gold.

I once listened to a real estate investor speak on a podcast. In his late forties, after his kids left the house, his wife demanded a divorce. They had an acrimonious settlement over their assets. Finally, they agreed that she would get his entire life savings and he would keep the rental units, which she never liked anyway—they were just headaches and hassles to her.

When later asked about this deal, which seemed to favor her side, the man chuckled knowingly, “Well, she may have gotten the golden eggs. But I got the geese.” With passive income, we have a perpetual flow of money.

“Residual income is passive income that comes in every month whether you show up or not,” said Steve Fischer. “It’s when you no longer get paid on your personal efforts alone . . . It’s one of the keys to financial freedom.”

Robert Kiyosaki said, “To obtain financial freedom, one must be either a business owner, an investor, or both, generating passive income, particularly on a monthly basis.”

When your investments pay you more than you can earn at your day job, and passive income exceeds your living expenses, you will then drink of a freedom that few ever taste.

Just know that every river starts by saving small amounts of money, and then making an investment. And then another. And then another. . .

. . .

Can we win if we don’t keep score?

By John Soforic on 01/11/2020

“We all want to win, but winners know the score.”

LESSON 5-6 REMINDER: KEEP SCORE

Life is not a soccer field with a participation trophy. In adult life, there is always a scoreboard. And if we want to win, we must know the score.

Are you aware of your net worth? Do you avoid this number? The median of our society, the masses who live comfortable lives of financial insecurity, don’t know their net worth. Everybody wants to win, but winners know the score.

By tracking your net worth, you can weigh the impact of your choices. If you save $500 this month, or pay down $500 of your debt, your net worth will increase by that amount. If you work in your free hours to earn more, you will see the value of sacrifice when you see your net worth improve as a result.

If you buy a $30,000 indoor swimming pool that adds $20,000 to the value of your house, your net worth will shrink by $10,000. If you use $3,000 from your savings for a vacation, your net worth will decrease by $3,000. A net worth statement is like an x-ray of the moving parts of your financial condition.

The reason to keep score is to gain insight and discipline over the daily choices that impact your wealth. And when you’re moving in a direction, seeing the score improving with each passing month, you’ll feel deep satisfaction.

You’re in it to win it. You want more out of life, and you know this deep longing is not wrong––it’s an inner wisdom compelling you to be all you can be.

Peter Drucker said, “What gets measured gets managed.” If you want financial accumulation, measure it. Keep a running tally. The thrill is the score—there is joy and wonder in watching little seeds grow.

. . .

Save Money and Money will Save You!

By John Soforic on 01/09/2020

“Preparation is a pile of cash when opportunity knocks.” -the Wealthy Gardener

LESSON 5-5 REMINDER: SAVE URGENTLY!

If luck is when opportunity meets preparation, then preparation is a pile of cash when opportunity knocks. And a pile of cash is the result of saving urgently in the passing days.

Saving money urgently means saving money NOW. Saving now is the way to wealth, while saving someday is the way to scarcity.

Why save money with a sense of urgency?

Without urgency to save, you risk spending money arbitrarily and then wondering where the money goes. Urgency is vital because an empty bank account causes hopelessness, vulnerability, and dependence. Worse, a lack of savings will cause smart people to fear losing thankless jobs.

Money in the bank changes life quite a bit. Saving money provides a cushion against catastrophe. It is the power to absorb hard punches. It requires a discipline that, when mastered, qualifies one for richer opportunities.

“If you wish to get rich, save what you get,” advised Brigham Young. “A fool can earn money; but it takes a wise man to save and dispose of it to his own advantage.”

If we don’t save, we’ll stay broke no matter how much we earn. And if saving money is not urgent, it just won’t get done.

“Save money and money will save you,” reads a Jamaican proverb. Saving now is the way to wealth, while saving someday is the way to scarcity.

. . .

Get out of debt!

By John Soforic on 01/07/2020

“To free yourself from worries, free yourself from debt.” – the Wealthy Gardener

https://www.youtube.com/watch?v=hM7bN7R90Lk&t=83s

LESSON 5-4 REMINDER: DEBT

Video transcript: It has been said that the only reason a great many American families don’t own an elephant is because they’ve never been offered an elephant for a dollar down and a number of low monthly payments.

Earl Wilson observed, “Today, there are three kinds of people: the haves, the have-nots, and the have-not-paid-for-what-they-haves.”

These are funny quotes, but the subject of debt is not funny to anyone who is shackled by it. In fact, debt is a master that chains the workers to the wages.

Too many people take on personal debt based solely on monthly payments. It is an especially dangerous practice in the purchase of an education, home, vehicle, and even furniture. The payment system is the devil in disguise.

Debt robs the future of time and money. It chains the worker to the wages. But you can wage a war––a five-year crusade––to regain your freedom.

Imagine being debt free in five years. Now see yourself paying an extreme sacrifice of time during these years. You work like a maniac. Imagine yourself cutting your expenses, living below your means––living to gain freedom.

At the end of these five years, you’re debt-free. How would you feel? Would you feel like the sacrifice was worth it? Or do you think you’d look back, debt-free, and regret all the television, golfing, and relaxing you missed?

The way to gain freedom is to temporarily give up all freedom. Use each day’s waking hours to pay the price for debt reduction.

Debtors suffer the pain of sacrifice or the pain of slavery. To free yourself from worries, free yourself from debt.

. . .