Financial freedom comes from systemic understanding
Financial freedom can be defined at three levels:
- system
- pattern or habitual behavior
- event
The system is a superior method, the pattern or behavior is the second best, and the event level is the most inferior.
People hoping to achieve financial freedom from an "event" usually buy lottery tickets. Or they "hope" that a rich uncle will soon reach Heaven!
Sometimes, you'll also see a gorgeous young woman marrying a wealthy old man in order to strike rich. I'm not passing any judgment at all. Just a fact.
Warren Buffett is a person who gets rich by thoroughly understanding systems. You see, the more you understand, the less you have to do. This is so because you can leverage powerful forces out there, and use them to your advantage.
People who strive to get rich via patterns or their own behaviors, are hard workers. This seems better than buying lottery tickets or marrying rich, since there is effort and self-discipline involved.
However, in my opinion, a systematic or systemic approach to getting rich is the best. It's about maximizing one's leverage. And it's all about continuously learning about the system, so as to gain incremental benefits from every leverage point.
This has been the success secret of Jay Abraham, the marketing guru's guru. If you read his books, you'll understand what I mean.
Most people are working hard at the pattern level, or the behavioral level. And usually, they work WITHIN a system created by others. They cannot win against the system unless they thoroughly understand HOW the system works.
Indeed, the technical definition of a "winner" (or alpha male, or whatever you want to call it) is someone who understands the social, economic, political, commercial and technological rules of society and, in a premeditated manner, plays by those rules to leverage them.
This is why lawyers make so much money. Society is like a game of Monopoly, and lawyers are the only people who read and understand the game rules!
Investors who understand the investment game, also make a lot of money because, to borrow the Monopoly metaphor, they know what to buy and where to park their assets.
My point is that wealth and financial freedom come from systemic understanding. Yes, you still have to "do things" in the right order at the right time. But understanding HOW things work, and how systems work, is probably 80% of wealth.
In other words, there is an inverse relationship between understanding and action required. The more you understand, the less you have to do or work.
Here's a stark example: The U.S President understands the most, the McDonald's worker understands the least. One uses maximum economic, social, technological and political leverage. The other is being leveraged.
This is why it is said that "effort defeats itself." In other words, "hard work" will not make you rich.
Jim Rohn put it this way: "Work hard at your job and you'll make a living. Work hard on yourself and you'll make a fortune."
Working on yourself (self-improvement, personal development, etc.) is not really "hard work." It's fun and it feels really good. You feel that you're growing, as a person. Personal development is what life is all about.
But you won't have time to actualize your true potential if you have to "work hard" every day, five days a week.
This is why it's so critical to understand business, capitalism, economics, finance, etc. as soon as possible, so you can generate income from your systemic understanding and not from your behavior.
- system
- pattern or habitual behavior
- event
The system is a superior method, the pattern or behavior is the second best, and the event level is the most inferior.
People hoping to achieve financial freedom from an "event" usually buy lottery tickets. Or they "hope" that a rich uncle will soon reach Heaven!
Sometimes, you'll also see a gorgeous young woman marrying a wealthy old man in order to strike rich. I'm not passing any judgment at all. Just a fact.
Warren Buffett is a person who gets rich by thoroughly understanding systems. You see, the more you understand, the less you have to do. This is so because you can leverage powerful forces out there, and use them to your advantage.
People who strive to get rich via patterns or their own behaviors, are hard workers. This seems better than buying lottery tickets or marrying rich, since there is effort and self-discipline involved.
However, in my opinion, a systematic or systemic approach to getting rich is the best. It's about maximizing one's leverage. And it's all about continuously learning about the system, so as to gain incremental benefits from every leverage point.
This has been the success secret of Jay Abraham, the marketing guru's guru. If you read his books, you'll understand what I mean.
Most people are working hard at the pattern level, or the behavioral level. And usually, they work WITHIN a system created by others. They cannot win against the system unless they thoroughly understand HOW the system works.
Indeed, the technical definition of a "winner" (or alpha male, or whatever you want to call it) is someone who understands the social, economic, political, commercial and technological rules of society and, in a premeditated manner, plays by those rules to leverage them.
This is why lawyers make so much money. Society is like a game of Monopoly, and lawyers are the only people who read and understand the game rules!
Investors who understand the investment game, also make a lot of money because, to borrow the Monopoly metaphor, they know what to buy and where to park their assets.
My point is that wealth and financial freedom come from systemic understanding. Yes, you still have to "do things" in the right order at the right time. But understanding HOW things work, and how systems work, is probably 80% of wealth.
In other words, there is an inverse relationship between understanding and action required. The more you understand, the less you have to do or work.
Here's a stark example: The U.S President understands the most, the McDonald's worker understands the least. One uses maximum economic, social, technological and political leverage. The other is being leveraged.
This is why it is said that "effort defeats itself." In other words, "hard work" will not make you rich.
Jim Rohn put it this way: "Work hard at your job and you'll make a living. Work hard on yourself and you'll make a fortune."
Working on yourself (self-improvement, personal development, etc.) is not really "hard work." It's fun and it feels really good. You feel that you're growing, as a person. Personal development is what life is all about.
But you won't have time to actualize your true potential if you have to "work hard" every day, five days a week.
This is why it's so critical to understand business, capitalism, economics, finance, etc. as soon as possible, so you can generate income from your systemic understanding and not from your behavior.
posted by Super Peter at 3:24 PM
<< Home