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DR JOHN DEMARTINI - Updated 1 year ago
I am often amazed at how many people fantasize about being financially independent. Yet less than 1% of the population actually obtains true financial independence.
Many years ago, when speaking at an event in South Africa that comprised around 5,000 people, I asked them to raise their hands if they would love to be financially independent. Every single hand went up. In fact, some people even raised both hands! I then asked them to raise their hand if they had actually achieved their goal of becoming financially independent. In other words, where:
- Their passive income exceeds their active income; and
- They work because they love to and not because they have to in order to pay bills.
Almost every hand in the entire audience immediately went down, other than seven individuals. Now this was an audience made up almost entirely of entrepreneurs so I had anticipated that the percentage would be a little higher, but it wasn’t. It was 7 people out of 5,000 or 0.14% of the audience.
I then moved on to another exercise aimed at helping them understand why the percentage was so low.
I asked them to imagine my giving them 10 million US dollars, and to then write down in 60 seconds the 10 ways they would use or spend that money.
You can do this too so before you read any further, grab a pen and paper and write down your own answers to the instructions above. When you’re done, then carry on reading.
After that minute was up, I had them switch papers with the individual next to them, and had them calculate how much of their neighbor’s hypothetical 10 million dollars was still an appreciable asset that could help them earn a passive income going forwards.
True financial independence is passive income, not active income.
Interestingly, between 20% and 80% of the attendee’s 10 million dollar was “spent” on consumables that depreciated in value.
In other words, the majority of people in that room immediately opted to buy things that went down in value and depreciated, instead of true financial assets that appreciated in value.
It also means that their highest values and priorities, things that are intrinsically most important to them, did not include true financial independence. Instead it reveals that the higher lifestyle of the rich and famous and accumulating consumables is more important than accumulating true financial assets.
If they had a higher value on wealth and financial independence, they would have taken that money and bought appreciating assets to accumulate and further grow their financial wealth.
However, the majority of them chose instead to buy immediately gratifying consumables – things like a new car, new clothes, a trip overseas, a bigger house – items that can be classified as being lifestyle-related instead of asset accumulation.
What did you write down? Does your list reflect similar depreciating items or do you have financial assets that appreciate in value?
This is where it gets really interesting…
The REAL reason why people don't have financial independence has nothing to do with the amount of money they earn and everything to do with how they manage what they make. And, how they manage what they make each month is based on what they truly value.
Let me explain further.
Like every individual, you have a unique hierarchy of values, things that you value most, and your unique hierarchy of values at any one time in your life determines and dictates how you spend your money.
For example, if you have a high value on good food, you will spend a large portion of your paycheck each month on food even it means doing without something else.
If you have a high value on cars, you may spend a significant amount of money on a new car even if you struggle to pay your rent.
Each individual will find money for things that they value and run out of money or choose not to spend money on things that they don’t.
So, everyone’s financial destiny is dictated by their hierarchy of their values because their set of values determine how they spend their money.
If you never buy assets that go up in value, you're likely to be working as a slave for money your whole life.
If you let life pass you by and you never learn the art of building wealth, then when you're in your seventies or eighties, you may not be physically able to work as hard and will likely need to downsize your lifestyle as a result.
However, if you choose long-term deferred gratification over immediate gratification; buy assets instead of depreciating consumables; stop overspending and living beyond your means and instead save, invest and buy appreciating assets; you will have financial stability in your seventies and eighties, because you’ve been patient and allowed your money to work for you.
Compound interest, as Einstein said, is an eighth wonder of the world.
If you never give yourself permission to save and invest where the compound interest can grow, you're likely to be a slave to money all your life.
An interesting question to ask, is why? Why is it that some people are drawn to immediate gratification and while others are drawn to long-term deferred gratification?
This is something that I referred to earlier as your highest values, and something I teach most every week in my signature two-day Breakthrough Experience program.
At its core, your life demonstrates what is already truly important to you, that’s what I refer to as your hierarchy of values. Your life will not consistently demonstrate that which you may perceive you “should”, “ought to”, or “must be” important to you.
Think of a ladder, as an example. Your highest intrinsic values are on the top rungs, and your lower values descend from there to the lowest rungs.
When you perform actions that are congruent with your highest values, blood, glucose and oxygen goes into your forebrain, which is the executive center of your brain.
Anytime you fill your day with your highest priority actions and do what is most important, meaningful and inspiring in your life; you wake up the part of your brain that is involved in inspired vision, strategic planning, objectivity, execution of plans, and self-governance.
You are also more likely to awaken your leadership capacities because you will tend to be more effective and efficient in your actions and have more resilience and stamina in life.
On the other hand, when you fill your day with low priority actions, tasks that you perceive to be lower on your values, your blood glucose and oxygen goes into your amygdala.
So, instead of waking up your executive center for inspired vision, you wake up your subcortical region of your brain which includes your amygdala, which deals with conditioned reflexes, the impulses for immediate gratification, the seeking of pleasure and the instinctive avoiding of pain.
As a result, when you’re driven by your subcortical brain, you are more likely to avoid challenges and seek an easy path, while also taking on the role of follower.
This is the path of unfulfillment.
You’re more likely to seek immediate gratification when you're unfulfilled – filling your life with food or filling your house with stuff, because you're subconsciously compensating for the unfulfillment that most likely results when you’re spending time on lower value actions or priorities.
Your fulfillment level is proportionate to how high up on your hierarchy of values you go.
- If you’re living congruently with your highest values and living by your highest priority, you’re most likely to be more fulfilled.
- If your day is filled with lower values and lower priority tasks, you’ll tend to feel unfulfilled, frustrated and look for immediate gratification.
Just know this, that immediate gratification costs you long-term vision and long-term gratified financial wealth building.
As a result, your self-worth likely goes down and you self-depreciate.
When you self-depreciate, you’re also more likely to experience brain offloading, which is when you rely on others to make decisions because you lack confidence in those areas.
You then tend to subordinate to other people that you may perceive to be ‘greater’ or more empowered than you.
You’ll then try to inject some of their values into your own life, which will then result in clouding the clarity of what’s truly and uniquely important to you.
You may even spend your life being a second-rate version of someone else instead of a first-rate version of your authentic self.
This also has a potential impact on your financial wellbeing. If you're not living by the highest priority in your own life, and your self-worth goes down and you self-depreciate, you're also more likely to sacrifice altruistically.
I see this many times when people sacrifice altruistically and give away their potential for earning and creating financial wealth.
In many cases, these people simply haven’t given themselves permission to be fortunate, and that’s unlikely to happen unless they begin to live by priority actions, increase their self-worth, and perceive that they are in fair exchange.
When living congruently with your highest values, you're likely to be more objective and have more sustainable fair exchange.
When you're more objective, you're less likely to subjectively bias your interpretations and try to get something for nothing, or give something for nothing.
Instead, you’ll tend to be interested in sustainable fair exchange, which increases the probability of people continually wanting to do business with you, the probability of you valuing yourself enough to save, invest and buy assets.
If you don't have a value on financial wealth building, it's not likely to occur.
Also remember that money circulates through the economy from those who value it least to those who value it most.
If you have a value on wealth building, serving people, and saving and investing and buying assets that go up in value, then you'll most likely put aside a portion of whatever you earn into appreciating assets and work at trying to serve people to earn more.
You’ll also be more likely to patiently defer gratification for the objective of having your money work for you as a master and not having you work for money as a slave.
Embracing wealth includes embracing the accountabilities that comes with it.
At the age of 27, I learned to automate my financial investments.
I started taking a portion of whatever I earned and putting it into an asset accumulation.
It really wasn't rocket science – I simply automated the purchase of assets on a weekly basis and my assets grew.
Then my passive income grew.
Then eventually, my passive income exceeded my active income.
It pays to value both yourself and financial wealth enough to become its master instead of its slave.
People who say they're either infatuated with money and want to get rich quick, or people who resent money and say, “Oh, I'm not into the money,” are highly unlikely to manage their money wisely and instead be run by money their whole life.
As I so often say, anything you infatuate with or resent is going to run you.
That's why, in the Breakthrough Experience, I teach you the Demartini Method on how to dissolve infatuations and resentments, because those are the two primary impulsive and instinctual distraction mechanisms that stop you from doing extraordinary things.
When you use the Demartini Method to dissolve your distracting polarized emotions, you tend to have less brain noise and feel that your mind is clear.
As such, you are able to navigate towards what you are intrinsically and spontaneously inspired to do, instead of being distracted by trying to please other people, avoid angering them, and worrying what they think.
I’ve worked for 50 years on systems on how to dissolve each of the many obstacles that may distract you from doing something extraordinary with your life.
If you're not seeing everything in your life as being ON the way and are instead seeing things as being IN the way while running stories in your head about being a victim, then you are allowing yourself to be distracted from your mission.
Being fortunate is a state of gratitude for what you have and for the opportunity to create what you love.
When you have gratitude for what you have, you get more to be grateful for, and that opens up the doorway for a more fortunate and wealthy life that is filled with wellbeing.
Wellbeing means whole, and perceiving that there is nothing missing in your life. Everything you think is missing is in a form you haven't yet acknowledged and honored.
To sum up:
If you haven’t yet determined your highest values, then it is wise to invest your time in going through the Demartini Value Determination Process on my website.
Once you have identified your unique hierarchy of values that are fingerprint-specific to you, you can align your daily actions steps in life so that they are congruent with those highest values.
You can also begin to fill your day with more high priority actions that inspire you, instead of low priority distractions that don’t.
Living by priority is key to building your fortune and valuing yourself, instead of lowering your self-worth and seeking instant gratification in the form of depreciating consumables. That’s not the wisest way to embrace wealth and master your life.
Warren Buffet once said, “If you cannot manage your emotions, you will not masterfully manage your money.” Money is made through following objective strategies more than through impulsive emotions.
Your emotions can destroy your financial wealth. Anything that you are infatuated with, runs you and anything that you resent, runs you. If you get elated and depressed about events, they run you.
It’s wisest to have your objective financial strategies override your impulsive emotions.
Are you ready for the NEXT STEP?
If you’re seriously committed to your own growth, if you’re ready to make a change now and you’d love some help doing so, then book a FREE Discovery call with a member of the Demartini Team so we can take you through your mini power assessment session.
You’ll come away with a 3-step action plan and the foundation to empower your life.
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