Will You Be A Winner?

   Tonight’s the night, the big game. Super Bowl LV (55). Where football fans, and non-football fans alike all crowd around watching two teams smash into each other. Fortunes are made and lost with each touchdown and fumble.

   Kansas City Chiefs star quarterback, Patrick Mahomes has a 450 million dollar, 10-year contract. While Tom Brady has a 25 million dollar payday (plus bonuses) from his Buccaneers contract.

   But these aren’t the first star athletes to be paid such incredible sums. Time and time again, the rich and famous have demonstrated that even the mighty can fall, filing for bankruptcy after they lose it all.

   What mistakes are being made that cause societies top earners cheques to bounce?

   As with most things, education plays a pivotal role in the eventual success or failure. That is why it is so perplexing that basic financial education is lackluster in its delivery, if provided at all. A few simple rules could have averted all of those financial meltdowns.

Up and Down

   Jim Rohn perhaps put it most eloquently when he said: if your outflows exceed your incomes, your upkeep becomes your downfall.

   Or more simply, if you spend more than you make, you’ll soon go broke.

   This is perhaps the cornerstone rule of achieving financial freedom - don’t spend more than you make.

   Of course, that isn’t usually the problem when we’re in our prime. Sports superstars like Mike Tyson can attest to that. Each fight was worth millions to his bottom line, and in his prime those fights were coming fast and furious.

   But all good things eventually come to an end, and when Mike Tyson retired, that income was significantly reduced. As we all witnessed though, Mike’s lifestyle didn’t scale back a few notches. His upkeep became his downfall.

   That is the single biggest reason that most people fail to achieve financial freedom.

   As you become more established in your career, you’ll start earning more. But at the same time, life is likely growing with you. That promotion at work coincides with the birth of another child, and all of a sudden you need a bigger house. And a bigger car. But not just any bigger car, you need something worthy of your new title. Something shiny, with heated leather seats and a brand name that turns heads.

   This cycle continues your entire life. Constantly up-scaling your life every time you move to a higher paying job or position. It’s normal, and it’s natural. But if your lifestyle creep keeps pace with your earnings growth, you’ll soon begin to realize something. Freedom isn’t achievable like this.

   When your outflows grow at the same rate as your income, you can’t ever scale back on your income. That means you won’t ever find the freedom that was promised. You’ll find yourself stuck in the same situation that millions of people in the richest countries in the world are in. You simply cannot afford to retire.

   The solution is to find the elusive state called balance. Balance between the needs of now, and the needs of the future

Balance the Sacrifices

   To find that elusive balance, you need to decide what sacrifices you are willing to pay. Do you sacrifice today’s comfort for freedom tomorrow? Deciding to what extent you are willing to pay that sacrifice will determine how much freedom you have in the future. 

   What percentage of today’s earnings will you put aside for tomorrow? Depending on your own unique situation, those numbers might look very different. But one thing is certain, the more you sacrifice early, the more freedom you will have years from now.

   You want to be a winner. But, what are you willing to sacrifice for that victory?