“World View” is a term recently popularized by philosophers and media pundits who debate spiritual and political matters.

It refers to the lens through which people see (and therefore interpret) the world around them.

All information and observations must pass through this lens and be colored by one’s World View.

Similarly, there is another “View” I would like to propose for consideration, and I’m calling this the “Money View.”

In my nearly two decades of dealing with people and their finances I have slowly awakened to the fact that how people are doing financially is often a direct result of their “Money View.”

Just as with World Views, there are several very different Money Views, each with its own ramifications. These include, but are probably not limited to, the following:

1.  Money as a Mystery – in which people seem to have no clue how money is made (or retained) and therefore think that others who are successful financially are somehow “lucky”

2. Money as a Master – in which one’s entire life is lived out in bondage to the need for more money, or at least the drudgery of scraping by. This is often accompanied by terms such as, “I have to go to work,” or “Another day, another dollar.”

3. Money as a Monster – this is the condition whereby financial pressures become so large they dominate a person’s thoughts and affect him emotionally. Often at this stage relationships are damaged and health is compromised.

4. Money as a Major – in which a person applies most of his focus and fascination on how to acquire more. In this situation money is an idol.

5. Money as a Motivator – this is the condition whereby money is used to push one to higher achievement and greater contribution. This can be for both selfish or selfless reasons. Beware.

6. Money as a Manipulator – whereby a person uses his or her money to get what he or she wants out of other people. It is here where phrases such as “Money is Power” apply.

7. Money as a Minimizer – the condition in which the presence of money diminishes one’s ambition. This is where complacency and mediocrity reside.

8. Money as a Maximizer – where one is driven to utilize his or her money to make a greater contribution and maximize his or her potential. This is usually much more selfless and altruistic than #5 above.

9. Money as a Monument – where money is used as a status symbol, to build a reputation, or as an attempt to establish an immortal family legacy.

10. Money as a Menace – wherein the money one has is a destructive force in one’s life, either by feeding addictions or by causing fights or by dominating one’s time and energy with the care and maintenance required to sustain it.

In considering this list, it may be helpful to ask yourself some questions, such as:

1. Which “Money View” best represents where you are right now?

2. Which of these “Money Views” have you encountered previously in your life?

3. Notice that several of these “Money Views” are quite negative. What are you doing to make sure you are living under a positive and productive one? Which one would you choose?

4. What are you doing to grow in your financial understanding and education?

In each of the above views we see that money is always used as a Means. The key question in money matters is therefore, “As a means for what?”

This is why the Bible again and again treats money as a heart issue.

Money in itself is not evil, but the heart is desperately wicked, who can know it? Money becomes a dangerous or productive tool, depending upon the heart that wields it.

Make sure you choose your “Money View” deliberately and intentionally, don’t simply let it choose you.

Pursue some financial education to enable you to be in charge of money instead of it being in charge of you. And guard your heart when it comes to money, in plenty or in want.

That’s my view.

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Chris Brady co-authored the New York Times, Wall Street Journal, Business Weekly, USA Today, and Money Magazine best-seller Launching a Leadership Revolution.

He is also in the World’s Top 30 Leadership Gurus and among the Top 100 Authors to Follow on Twitter. He has spoken to audiences of thousands around the world about leadership, freedom, and success.

Mr. Brady contributes regularly to Networking Times magazine, and has been featured in special publications of Success and Success at Home. He also blogs regularly at Chris Brady.

He is an avid motorized adventurer, pilot, world traveler, humorist, community builder, soccer fan, and dad.

Connect With Chris:

My good friend Randy Watterson sent me this article, What’s Luck Got to do with it? by Jim Collins.

In the article, Jim talks about the difference between a 1 or 2Xer (a person who meets or doubles the industry standard of success) and a 10Xer (a person who is able to obtain 10 X the industry standard).

What he describes is a leader’s ability to capitalize on your ROL, Return On Luck!

Luck?

Yeah, you know, luck, the stuff you didn’t really plan for, that shows up in your life.

There is good luck and bad luck.

Great leaders and Warriors are able to get a great return on luck in either case.

When a great opportunity comes your way, are you a “Zoomer,” as Seth Godin describes in his book Small is the New Big?

Do you default to “yes” when an opportunity presents itself, as Guy Kawasaki describes in his new book Enchantment?

In their own ways, they are talking about your ability to change.

To some, change is a threat.

To others, change is just business as usual.

You really aren’t all that special.

Just like everyone else, you will experience change and luck; the question is, what will your return on the experience be?

There are amazing stories of people who had “good luck” and capitalized on it, and then the rest who have had “good luck” and let the opportunity pass.

There are amazing stories of people who have had “bad luck” and were able to turn it around and capitalize on it anyway.

And then there are the rest who have had “bad luck” and used it as an excuse.

There are great examples of both in Jim’s Article.

On the other hand… you have people like David Heinemeier Hansson and Timothy Farris, two very successful people who give advice from the extreme opposite point of view.

They say you should make your default answer “NO.”

So, how can this be?

Two groups of wildly successful business people giving the opposite advice on the same topic.

Well, the conclusion of Jim’s article sums it up very nicely…

“After finishing our luck analysis for “Great by Choice,” we realized that getting a high ROL required a new mental muscle.

“There are smart decisions and wise decisions.

“And one form of wisdom is the ability to judge when to let luck disrupt our plans.

“Not all time in life is equal.

“The question is, when the unequal moment comes, do you recognize it, or just let it slip?

“But, just as important, do you have the fanatic, obsessive discipline to keep marching, to push the opportunity to the extreme, to make the most of the chances you’re given?”

Of course, the Warriors who are reading this do!

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Kevin Mogavero is a co-founder of “Six Degrees of Leadership,” a personal development company that empowers people to live their purpose and passion by building “Social Capital.”

A graduate of West Point Academy, Kevin served six years as an officer in the U.S. Army Field Artillery. He held a combat arms leadership role for his entire career, except one staff position, during which he obtained a Master’s Degree in Leadership and Management. He also served in Iraq during “Operation Iraqi Freedom.” Since the military, Kevin has worked for Honeywell as an earned-value analyst in the aerospace department, in Phoenix Arizona.

He started testing his leadership skills in the entrepreneurial world by starting several companies, to include a real estate company and a business mailing-address company. Kevin loves to serve people who have a yearning to create a better life for themselves and others. He is passionate about teaching people the importance of something that most take for granted: relationships.

Kevin lives in Phoenix with his wife and two daughters. Read and subscribe to Kevin’s Warrior Blog here.

“A myth is a fixed way of looking at the world which cannot be destroyed because, looked at through the myth, all evidence supports that myth.” —Edward de Bono

If, as I claim in my book Killing Sacred Cows, much of what we’re taught about money is false, then why are these myths so prevalent, and where do they originate?

Most of the money myths we’re taught today originated during major economic or cultural developments (such as the Great Depression), are solidified by financial institutions that have a vested interest in maintaining the status quo, and are spread through the misguided advice of well-intentioned family members and friends.

We rarely think to question the financial concepts we believe in and follow. Seldom do we consider that these “tried-and-true” strategies might in fact be false.

We’re trained in our perceptions of money from a young age. Our parents pass along to us their own ideas about money. Even if their ideas are not explicitly stated, we absorb them through observation of our parents’ use of money.

If they were careless spenders, we will likely spend our money carelessly. If they were cautious and suspicious of others, we will hold tight to our money in like manner and miss opportunities to grow our wealth.

Or we will adopt the polar opposites of their behavior about money and get ourselves into entirely different trouble. Without even knowing the source of our feelings about money, we will behave in ways that perpetuate financial mismanagement through our lifetimes and those of our children.

The members of our families and communities contribute to our miseducation through their own buying habits, through employment and investment advice, and through other motivating behaviors.

Most people have good intentions, but their advice relies on the same myths they were taught or information that may be pertinent to their situations but does not relate to our own.

The myths we absorb from our parents and community are supported by society as a whole. Our culture offers “wisdom of the ages” in the form of clichés about money that we rarely question.

These clichés are often rooted in historical events that have little to do with our current economy or our personal financial situations. For example, the Great Depression resulted in hoarding and a scarcity mindset that permeated American culture and heavily influenced succeeding generations. And the post–World War II boom led to the belief that financial security came from tying oneself to a corporation.

These beliefs are perpetuated by institutions within our society because they support their goals or because the people within the institutions don’t know any better either.

“Nothing is more difficult than competing with a myth.” —Françoise Giroud

Financial services companies sell their products by promoting perspectives and methods with fancy names such as “The Miracle of Compounding Interest.”

These marketing messages have been used for so long that we have come to accept them as viable and trustworthy financial strategies.

But financial institutions have always practiced and continue to practice the very things that we are either told to avoid or are completely unaware of. The ideas they promote are good for them, but not necessarily good for us.

Conventional retirement planners are usually no more helpful in the quest for true financial freedom.

Not only do retirement planners receive their training from financial institutions, but they often work directly for these companies as well. Even if a retirement planner is knowledgeable in correct economic principles, he usually has an underlying incentive to sell suboptimal products.

This does not mean that financial institutions are inherently evil because they pursue their own interests. It does mean, however, that we must be aware that institutions are in business for a reason: to increase their revenues and their bottom line.

My goal is not to tell you to completely avoid financial institutions; it is simply to point out that they have their own distinct interests and those interests may not coincide with yours. The better we under- stand the agendas of financial institutions, the more wisely we can utilize their policies for our benefit.

Educational institutions aren’t effective at combating the myths that financial institutions propagate. American schools fail at educating students in correct principles of personal finance.

A very different approach to money management is taught to students in personal finance courses as opposed to those in corporate finance courses.

Personal finance directs learners to accumulate net worth, pay off debt, invest for the long term, and protect their possessions with term insurance.

The corporate finance course teaches velocity of money, cash flow, risk management, and permanent insurance strategies. These principles and methods are far superior to and less risky than the personal finance techniques. In fact, corporate finance strategies are intended to take advantage of the investment dollars tucked away by people using personal finance methods.

What isn’t taught to the average American is that corporate finance strategies can be employed on a personal level and used to achieve far greater wealth with equal or better security.

To combat the compounded influence of family, community, experts, education, and society—a daunting task—we must realize that popularity and the majority’s opinions don’t necessarily point to the truth.

In other words, fifty million people saying a dumb thing doesn’t make it any less dumb.

The herd mentality is destructive. Consider this question: If only a minority of people are wealthy, why do we follow what the majority of people do financially?

True principles of personal finance exist that can lead to prosperity for anyone in almost any circumstance. But succeeding with these principles requires the courage to step away from the crowd and to choose “the road not taken.”

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Garrett Gunderson is an entrepreneur, financial coach, the founder of Freedom FastTrack, and the primary author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Garrett loves inspiring others to turn their potential into production. He has dedicated his life to living and teaching a unique concept known as Soul Purpose that reveals how anyone can live a more prosperous and rewarding life.

As a finance and business productivity coach, Garrett instructs both large and small groups of business owners and financial service professionals nationwide.

Connect With Garrett:

However, this is almost always a mistake. For the most part they don’t know what they’re doing, they don’t understand what they’re investing in, they have little or no control over how their investments perform, and they expose themselves to unnecessary tax consequences.

(By the way, the same applies to real estate—if you don’t know what you’re doing there, it shouldn’t be part of your investment plan.)

Most investors are better served by:

1. Investing in themselves and their career or business
2. Investing where they personally have deep interest, knowledge, and expertise if there is still extra money or no interest in being intimately involved
3. Using fixed, tax-advantaged vehicles, such as permanent life insurance, guaranteed insurance contracts, and/or specialty annuities.

Invest in Yourself & Your Business First

In 1960, a man named Srully Blotnick began a study of 1,500 people representing a cross-section of middle-class America. Throughout the twenty-year study, they lost almost a third of participants due to deaths, moves, or other factors.

Of the 1,057 that remained, 83 had become millionaires. The 83 successful people shared five characteristics:

• They were persistent
• They were patient
• They were willing to handle both the “nobler and the pettier” aspects of their job
• They had an increasingly noncompetitive attitude towards the people with whom they worked
• Their investment activities — aside from their main career — consumed a 
minimum of their time and attention.

Writes Blotnick,

“We originally expected the people in our sample to become wealthy by taking the money they earned at work and investing it wisely, in such things as stocks, bonds, and real estate…We thought there’d be no way for [them] to become rich unless they used their surplus income to generate more income…It didn’t work out that way…More often than not they made little or no money investing.”

In short, the study revealed that the successful participants found something they loved and they did it well. Says Blotnick:

“In case after case, they did increasingly well occupationally, while their pursuit of investment profits proved to be largely a waste of time. In the long run, it was their work which made them rich.”

Blotnick concludes that investing in yourself, what you do, and with whom you do it are the most important determining factors of wealth.

If you’ve got excess cash lying around, use it to expand your knowledge, credentials, and capabilities and to grow your career or business before investing in other investment vehicles.

Ultimately, a business will pay you far more dividends than any other investment. You have true ownership and can control the investment, you have collateral, you have specialized knowledge, and you love what you do (hopefully).

Anything else that doesn’t meet those criteria dramatically increases your risk.

Whatever you invest in, it should be where you have influence, passion, and knowledge.

Reduce Your Risk & Taxes With Fixed Vehicles

Fixed accumulation vehicles, such as permanent life insurance and specialty annuities, are some of the least understood and under-utilized money vehicles.

One main reason is that they’ve been given a bad rap by ignorant media pundits and financial institutions with vested interests. These are the same institutions who feed you baloney like “high risk equals high returns.”

Thankfully, more and more investors are beginning to understand and leverage their value, for the following main reasons:

They provide guarantees and fixed returns. You never have to worry about stock market volatility. You can focus on what you do best without constantly worrying about losing or managing money. And when you calculate losses, taxes, and administrative fees, these fixed returns can rival variable market returns.

They provide phenomenal tax advantages. Like qualified plans, such as IRAs 401(k)s, your money grows tax-deferred. But unlike qualified plans, you have options where you don’t pay taxes on the back end when you begin withdrawals.

Greater liquidity and access. Your money can be accessed in many of these contracts through tax-free and in some cases even interest-free policy loans without penalties. You don’t have to wait until 59½ to use your money.

If you love investing in stocks (or real estate), you actually know what you’re doing, and you have the ability to control outcomes with your stock market investing, then by all means invest some of your surplus profits there.

But if you’re like most people, stock market investing is a risky distraction. It’s not your area of expertise, so you just throw money into a diversified portfolio, cross your fingers, and hope and pray that you’ll receive a positive return. That’s not investing—it’s gambling.

Invest in what you know, what you love, and what you’re good at. Grow your career or business first. And if you still have excess cash to invest after doing that, invest in fixed, tax-advantaged accumulation vehicles before you even consider the stock market.

The true path to wealth isn’t to increase your risk, but rather to reduce your risk.

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Garrett Gunderson is an entrepreneur, financial coach, the founder of Freedom FastTrack, and the primary author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Garrett loves inspiring others to turn their potential into production. He has dedicated his life to living and teaching a unique concept known as Soul Purpose that reveals how anyone can live a more prosperous and rewarding life.

As a finance and business productivity coach, Garrett instructs both large and small groups of business owners and financial service professionals nationwide.

Connect With Garrett:

Hint: It’s not about your loan interest rates.

You want to get out of debt so you can reduce your risk, increase your cash flow, and have greater peace of mind, right? Here’s the fastest and safest way to do it:

1. Roll Non-Deductible Loan Interest into Deductible Loans

Assuming you have enough home equity and good enough credit, refinance your mortgage and roll as much of your non-deductible loans (credit cards, auto loans, etc.) into it as possible. The tax deduction will increase your cash flow.

2. Roll Short-Term, High-Interest Loans into Long-Term, Low-Interest Loans

Again, the goal is to minimize your interest payments and maximize your cash flow. Then, you can attack your remaining debt strategically, using your increased cash flow to eliminate one loan at a time.

CAUTION: Do NOT do this if you’re undisciplined and your spending is out of control. If you’re just going to charge your credit cards back up again, you’ll just sink deeper into debt.

3. Improve Your Credit Score

There are tons of companies and resources to help you do this. By increasing your credit score you get better loan interest rates, which lowers your payments and puts more money in your pocket.

4. The Secret Sauce: Cash Flow Index

Here’s where the rubber hits the road. After minimizing your payments and maximizing your cash flow, you’re now prepared to focus on one loan at a time, thus creating the “snowball effect” until you’re completely debt-free.

Most financial advisors and pundits will tell you to pay off your loans with the highest interest rates first.

My advice is to ignore the interest rate and use my Cash Flow Index to determine which debt to pay off first.

To determine your Cash Flow Index, take all your various loan balances and divide each of them by their respective payments. Whichever one has the lowest number is the one you should pay off first.

For example:

Home Loan Balance: $228,000
Interest Rate: 7%
Monthly Payment: $1,665
Cash Flow Index: 137 ($228,000 ÷ $1,665)

Auto Loan Balance: $16,500
Interest Rate: 8%
Monthly Payment: $450
Cash Flow Index: 37

Credit Card Balance: $13,000
Interest Rate: 12%
Monthly Payment: $260
Cash Flow Index: 50

Student Loan: $107,000
Interest Rate: 3.9%
Monthly Payment: $650
Cash Flow Index: 165

In this example, it seems to make sense to pay of the credit card first because it has the highest interest rate. But the Cash Flow Index reveals that the auto loan should be paid off first.

The trick is to pay off debt that gives you the greatest cash flow with the least investment.

A high Cash Flow Index means your loan balance is high relative to the payment, while a low Cash Flow Index means your balance is low but with a high payment. Knock out those high payments first and you free up cash to work on other debts.

In this case, by paying off the auto loan first, you free up more monthly cash, which can then be applied toward the credit card balance.

Paying off the auto loan first means you can pay off both faster than if you started with the credit card.

The Risk Factor

This strategy isn’t just about paying off debt faster—it’s also about reducing your risk.

Banks and other financial institutions tell you to pay off debts that lessen their risk while increasing yours.

For instance, if you put more equity into your home, you are still at risk for being foreclosed on if you can’t make a payment. In fact, they may be more willing to foreclose if you have more equity in your home.

Ask yourself the following questions:

• How often do banks want your money?
• How much of your money do they want today?
• For how long do they want your money?
• What incentives do they offer to either have you pay off debts faster or save money with them longer?

Banks play by much different rules than they teach us. You need to see through their advice to understand who it serves, then do what is in your best interest, not theirs.

So here’s the formula:

Be strategic about your credit score and existing loans and liabilities to minimize your interest payments and maximize your cash flow.

Ignore your loan interest rates and instead, use the Cash Flow Index (loan balance divided by payment) to determine which loans to pay off first. Start with those with the lowest Cash Flow Index.

Pay off one debt, then use your increased cash flow to pay off the next, and so forth until you’re debt-free.

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Garrett Gunderson is an entrepreneur, financial coach, the founder of Freedom FastTrack, and the primary author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Garrett loves inspiring others to turn their potential into production. He has dedicated his life to living and teaching a unique concept known as Soul Purpose that reveals how anyone can live a more prosperous and rewarding life.

As a finance and business productivity coach, Garrett instructs both large and small groups of business owners and financial service professionals nationwide.

Connect With Garrett:

By Garrett Gunderson

Your financial balance sheet measures the difference between your assets and liabilities to determine whether you’re in debt or if you have equity (net worth).

Assets are things that either generate cash flow for you, or that could potentially create cash flow.

Liabilities are things that incur expenses, such as a loan.

When you have more assets than you do liabilities, the equation is: assets – liabilities = net worth. The greater the assets versus liabilities, the greater the net worth.

Debt is having more liabilities than assets, meaning if you sold everything that you own and you still owed someone something.

Not all liabilities are debt.

For example, suppose your home is worth $500,000 but you only owe $200,000. Most people in that situation would consider themselves to have $200,000 of debt, when if fact is a $300,000 equity position. The asset is worth more than the liability owed.

Now suppose your home was worth $300,000 and you owe $350,000. How much debt do you have? Again, most people would answer “$350,000,” when in fact there is only $50,000 of debt.

Why It Matters To Your Prosperity

You do want to avoid true debt (having more liabilities than assets), but you don’t want to avoid incurring liabilities (owing something to someone else) that can be beneficial to your productivity, value creation, and prosperity.

In fact, in many instances, the way to increase your prosperity and wealth is to increase—not decrease—your liabilities.

For example, suppose that you had a strict rule to avoid debt at all costs—but you misunderstand its definition.

You find a house that you know you can sell for $200,000, but it’s offered at $150,000. You don’t have cash to pay for it, so you decide not to buy it because you don’t want to go into debt.

However, you’re not technically in debt—you would have an equity position of $50,000. By incurring the liability of a temporary loan, you create the possibility of earning $50,000.

Wealth isn’t created by ridding your life of as many liabilities as possible.

Rather, it comes by identifying which liabilities are consumptive (take more value from your life than they put into it) and which are productive (provide more value to your life than they take from it), and then focus on increasing your productive liabilities.

Different Types of Liabilities, & How to Manage Each

We’re often taught to get rid of as many liabilities as possible so that we can “save” money.

It is true that liabilities usually translate into expenses on our income statements. However, those liabilities also often translate into assets, income, or both.

The key is to examine closely the types of liabilities we incur.

There are three types of liabilities: destructive, consumptive, and productive.

Destructive Liabilities
Destructive liabilities are things that do nothing but detract from our ability to produce and damage our human life value.

For example, if I use heroin, that is a liability that has nothing but a destructive effect, both on my human life value and on the value I could potentially create for the people around me.

Destructive liabilities also include activities like gambling, pornography, addictions, and engaging in criminal and destructive behavior.

Consumptive Liabilities
Consumptive liabilities are examples of personal consumption that may not increase our income, but that often have an indirect positive effect on our ability to produce.

For instance, if you buy a new sofa, you may enjoy that sofa and the comfort in brings to your home for years, improving your happiness and potentially making you more productive.

Likewise, though a car does not generally contribute to our cash flow, it makes our lives easier and more productive through fast and reliable transportation.

Productive Liabilities
Productive liabilities are any liabilities that are attached to a corresponding asset that provides an increase in our immediate or possible positive cash flow, even in the long-term.

Real estate is an excellent and simple example of this. If by incurring a liability in the form of a mortgage payment a person is able to control an asset that pays them more than the liability, this is productive and desirable.

If a person decides to go back to school to earn a degree and can turn that degree into a new career that allows her to live her Soul Purpose, increase her human life value, and increase her income, then the student loans she takes out are likely productive liabilities.

Here are the rules for managing liabilities productively:

1. Never have destructive liabilities. Get rid of anything in your life that destroys your human life value and your ability to produce.

2. Choose your consumption wisely. Never incur consumptive liabilities that exceed your assets and therefore put you into debt.

For example, a trip to Hawaii may be consumptive, but if it doesn’t put you into debt and it indirectly increases your ability to produce by giving you much-needed rest and relaxation, then you can feel great about it.

(A word of caution: Be very careful never to use this rule as justification to be overly and irresponsibly consumptive. It’s very easy to slip into the habit of justifying purely consumptive purchases with the thought that it will increase your productivity.)

This gets complex when people use this idea to consume more than is reasonable, or in such ways that lead them closer to being in debt.

For example, if people use this rule as justification to eat out at a five-star restaurant every night and they don’t currently have the cash flow to support such a habit, then they’re abusing this rule.

3. Never borrow to consume. A good way to make sure you stick to rule 2 is to pay cash for everything that does not directly produce for you.

For example, if your only use for a big-screen TV is to put it in your home and use it only for you and your family, this is consumption; you should not put it on credit.

On the other hand, if you own a home theater installation business, it may be productive for you to put a big-screen TV on credit to place in your showroom.

If by doing so you increase your income greater than the liability of the TV, then this is an acceptable use of credit.

4. Focus on increasing productive liabilities, or the liabilities that come with a greater corresponding asset.

If your cash flow created by incurring the liability is greater than the liability, then this is a productive use of liabilities.

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Garrett Gunderson is an entrepreneur, financial coach, the founder of Freedom FastTrack, and the primary author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Garrett loves inspiring others to turn their potential into production. He has dedicated his life to living and teaching a unique concept known as Soul Purpose that reveals how anyone can live a more prosperous and rewarding life.

As a finance and business productivity coach, Garrett instructs both large and small groups of business owners and financial service professionals nationwide.

Connect With Garrett:

With the turning of a new decade comes the review of what happened in the last 10 years and the hope of what the next 10 years might bring us.

Because of my philosophy of investing in your greatest asset (which is YOU) at all times, I’m going to give you my top 7 mistakes to avoid in the next decade:

Mistake 1: Avoid Ignorance

Ask yourself, how can you get what you want if you don’t know what it is that you are seeking?

I most commonly see this mistake taking place in the current marketplace when I witness people chasing a particular product or rate of return.  They usually do this before having sort of clarity of what they want or having any sort of concrete plan developed.

Once a plan has been developed, only then can you clearly see what “success” truly means to you. Then once you’ve established what kind of “success” you desire, you can begin to understand why you are undertaking any financial strategy by seeing how it fits into your overall financial blueprint.

If you fail to plan and allow ignorance to be your guide, you will likely find that you’re spinning your wheels and wasting resources chasing financial returns that are full of false promises.

Mistake 2: Stop Being Inefficient

Sure you can add fuel to your pipeline, but why not fix the leaks first?

Many people believe that “more money” is the solution to all of their financial woes. However if your current plan isn’t efficient, then trying to save more money for investments is like trying to add more gas to a leaky pipeline.

The faster you put the money in, the faster it leaks out.

Start by plugging the leaks in your financial pipeline first by doing things such as improving your credit score, looking to refinance higher interest rates into lower ones and evaluating the costs of your current investments.

Or consider paying off higher interest debts before investing your dollars into something with lower interest rates than you are paying out.

Mistake 3: Not knowing how to benefit from your investments.

Do you have a solid exit strategy for your investments?

It is risky and unwise to invest money into something where you don’t have a clear and executable exit strategy.  Even worse is lacking the knowledge of how your investment will benefit you both today AND in the future.

For example, real estate can be much easier to buy than to sell and get your cash back out. Or in the case of many company sponsored plans, it is easy to put money in a 401k, but not always easy to access it if you needed the money at a later time.

Mistake 4: Don’t pay unnecessary taxes.

Are death and taxes the only things we can count on?

If you are running a business without a corporation or a tax strategy, it is inevitable you are paying too much in taxes. If you don’t have a business in the first place, do you at least have a passion project or interest which would allow you to start a business?

If so, taking that step could open up numerous tax benefits as well.

Another major mistake people make with taxes is to merely delay them under the false belief that this delay is somehow saving them on taxes. It is merely putting off the inevitable, and you may even find yourself in a higher tax bracket when it comes time to pay!

Mistake 5: Don’t overpay on insurance due to improper structure and coverage.

Are you insurance poor without even realizing it?

The greatest error I see is people over insuring unnecessary things while under-insuring the most important asset: you.  Overpaying for unnecessary insurance and being overexposed when it comes to the catastrophic risks is a common and dangerous mistake.

For example, choosing a very low deductible on your car insurance (which raises your payment) and then carrying the minimum coverages possible (to save money) makes no sense at all.

This type of strategy protects you from spending “pennies” on the deductible and leaves you exposed to potentially losing your entire life savings if something catastrophic happens.  Does that trade-off make sense to you?

Mistake 6: Investing in the wrong places.

If you don’t know where to invest…. Then don’t!

If you don’t know where to invest your resources, then start by investing in yourself in the form of education and personal development.  Investing without an understanding of what is happening with your money is just high stakes gambling.

Instead, build your financial knowledge, grow your confidence, and look for ways that you can be more productive. Most importantly, invest in and learn about areas where you have enough motivation or interest that you will study, or where you already have strong passion or knowledge.

Mistake 7: Don’t ignore your responsibility – do something!

Burying your head in the sand is NOT the answer.

Living a life of prosperity requires both responsibility and action.  Without action your situation cannot improve, so get started today.

Even if you’ve never invested before, realize that you are not alone. Everyone starts at the beginning, so take the first step and begin your education right away.

You’ll soon realize that you don’t have to be a financial genius to learn how and where to put your resources to work safely and profitably.

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Garrett Gunderson is an entrepreneur, financial coach, the founder of Freedom FastTrack, and the primary author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Garrett loves inspiring others to turn their potential into production. He has dedicated his life to living and teaching a unique concept known as Soul Purpose that reveals how anyone can live a more prosperous and rewarding life.

As a finance and business productivity coach, Garrett instructs both large and small groups of business owners and financial service professionals nationwide.

Connect With Garrett:

We only make exchanges when we value what we’re receiving more than we value what we’re giving away.

Economics is the science of the efficient allocation of resources. Through free exchange, all resources—material and otherwise—end up in the hands of those who value them the most, and those who value them the most will generally put them to the best use.

The more exchanges that are made, the wealthier everyone becomes, because value is velocitized.

This principle is explained in my book Killing Sacred Cows, which says:

“If I have a book and you have $10, and we mutually decide to exchange my book for your $10, what were the book and the $10 worth to you? What were the book and the $10 worth to me?

“Most people answer that the book was worth $10 to both you and me. This is exactly wrong. We only give up something in an exchange when we value what we’re receiving more than we value what we’re giving up.

“Hence, there is no way to quantify an exact amount that the book or the $10 was worth to you or me. All we can conclusively say is that to you, the book was worth more than $10 and the $10 was worth less than the book; to me the book was worth less than $10 and the $10 was worth more than the book.

“We both walk away wealthier than before we made the transaction because we both have something that is worth more to us than before.

“We only exchange when others have something that we value more than what we currently have. We never trade like value for like value because we have no incentive to trade like for like.  We trade what we have for what we actually want more.

“In a free market, the final sales price of any object is always an amount that the seller and the buyer both disagree that the object is worth.  Therefore, exchange can only occur in an atmosphere of disagreement.”

This principle alone, when properly understood, overcomes the fallacy of scarcity. Because value is in people, not in things, even if it is true that material resources are finite, people can exchange the same finite material over and over again to create unlimited wealth.

Every time we make a productive exchange, we are wealthier. Thus, according to this principle, everyone can be wealthy even if there’s a finite resource “pie” from which we all share.

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Garrett Gunderson is an entrepreneur, financial coach, the founder of Freedom FastTrack, and the primary author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Garrett loves inspiring others to turn their potential into production. He has dedicated his life to living and teaching a unique concept known as Soul Purpose that reveals how anyone can live a more prosperous and rewarding life.

As a finance and business productivity coach, Garrett instructs both large and small groups of business owners and financial service professionals nationwide.

Connect With Garrett:

In any transaction there is price and there are terms.  For example, the price of a home might be $300,000.  If the sellers want cash at closing and will not consider negotiating on other terms, you must either come up with $300,000 cash or secure a mortgage to purchase the property.

If you were to get a mortgage, the terms of the mortgage would include the payment, payoff period, interest rate, down payment, possible prepayment penalty, any variable rate stipulations, etc.

With mortgages, lenders generally have greater power to control terms than borrowers.  The borrower does have power to not accept the proposed terms, but institutional lenders will rarely negotiate the terms.

Negotiate for a win-win

However, if the sellers of this particular property are willing to enter into a different contract than cash at closing, you could negotiate a lease option or a seller financing arrangement.  At that point you have many more moving parts to work with in structuring the deal and greater ability to create a win for both parties.

If you don’t like the price, maybe you can get the seller to come down on the payment.  Suppose the property would rent for $1300 a month.  If you can accept their $300,000 price to get a $1,000 monthly payment, you can possibly sublease the property and receive a $300 positive cash flow.

Having the ability to structure and control terms gives us greater certainty in every investment we enter into.  If various terms are available, then the price in many cases becomes far less important than if terms are not available.

Through terms we can gain control of investments without necessarily having ownership of them.  And through that control we can derive profits.

When if comes to staying in abundance with property value investments, the name of the game is certainty.  The more certainty we can create, the greater chance we have of staying in abundance no matter what happens with the investment.

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Garrett Gunderson is an entrepreneur, financial coach, the founder of Freedom FastTrack, and the primary author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Garrett loves inspiring others to turn their potential into production. He has dedicated his life to living and teaching a unique concept known as Soul Purpose that reveals how anyone can live a more prosperous and rewarding life.

As a finance and business productivity coach, Garrett instructs both large and small groups of business owners and financial service professionals nationwide.

Connect With Garrett:

You’ve heard of compound interest being “miraculous,” but what is it?

Compound interest is the concept of adding accumulated interest back to the principal, so that interest is earned on interest from that moment on.

For example, suppose you owe someone $1,000, with an annual interest rate of 12 percent, for a monthly payment of $10.

If instead of taking the payment you decide to compound the interest, in the second month the person owes you $1,010, and the interest is then calculated from that new balance. In the next month, the new balance would be $1,020.10, and so on.

Generally speaking, the reason for compounding interest is based on the scarcity construct of accumulation. It still leads to people living lives of mediocrity and hoarding resources for fear of losing them. It limits the productive capacity of every individual who engages in it.

It also exposes them to many conditions that can negatively impact them, such as inflation, volatility, and taxes, with little or no way of mitigating those risks.

Also, what happens if your calculations are based on a steady 8 percent annual return, but your investment account actually fluctuates between -15 percent and +15 percent? The entire calculation is drastically thrown off, and compound interest becomes obsolete.

In other words, my problem with compound interest isn’t actually with the concept itself, but rather with financial institutions get people to buy products based on the concept, when the actual effect is much different than how it looks on paper.

Utilization theorists teach the concept of velocity, instead of compound interest. While compound interest trains a person to hold money for long periods of time, velocity teaches that the faster money circulates the more wealth is created.

Simply put, velocity means to greatly increase output with little or no additional input. We can velocitize one of two ways: 1) through exchange, and 2) through simultaneous use.

First, velocity is created through exchange when we increase the speed of financial transactions. It’s the difference between profit margin and turnover.

If the price of any inventory is extremely high, there may be a great profit margin, but by lowering the price more of a good is sold and would create greater turnover and therefore velocity.

Second, the idea of velocity through simultaneous use is to find multiple purposes for every dollar that goes into an investment. For example, if a person puts money in a savings account to be used as an emergency fund, every dollar going into that account serves only one purpose.

However, there are other investments that provide multiple uses for each individual dollar, things such as control, flexibility, rate of return, risk mitigation, tax protection, liability protection, disability protection and death protection.

Another example is that when I speak at events, I always film and record the event. This gives me the ability to leverage and velocitize that same content with very little increased input. I can put it into DVD or CD form, or transcribe the audio and create essays and books from it, for example.

The bottom line: Compound interest teaches to put money away and let it sit, while velocity teaches us to move money rapidly and find multiple uses for it.

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Garrett Gunderson is an entrepreneur, financial coach, the founder of Freedom FastTrack, and the primary author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Garrett loves inspiring others to turn their potential into production. He has dedicated his life to living and teaching a unique concept known as Soul Purpose that reveals how anyone can live a more prosperous and rewarding life.

As a finance and business productivity coach, Garrett instructs both large and small groups of business owners and financial service professionals nationwide.

Connect With Garrett: