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Eleven Ways to (Unknowingly) Light Your Money on Fire

by | Jul 11, 2022 | Financial Freedom, Money

Being a cheap ass cost me over $100K.

In the last year I’ve paid more tax than I should have. Why? I chose a $150 accountant to manage my 7-figure business.

So, I didn’t understand the tax system properly and got bad advice. I’ve spent considerable time getting a new accountant. Last week I chose one. The annual subscription is $10K (about right for my business size).

$10K sounds like a lot of money, but by not making the logical investment, I lit more than $100K on fire. Idiot. Spending good money on accountants and lawyers will save you a small fortune over a lifetime.

The best way to learn about money is often the hard way.

Let me save you from lighting a big chunk of your money on fire.

Remain under the spell of a salary

Many people make the mistake of staying at the same company for too long.

Don’t worry, I’m the ultimate dumbass with this one. I stayed at the same company for 8 years.

For most of that time all I got was the standard 2% inflation pay increase each year. In my next job at a different company I didn’t even get that!

But when you change jobs like you change underwear without giving a flying f*ck, your pay goes up anywhere from 10%-20% each time. Once I started switching jobs more often my salary doubled.

Company loyalty is a tax on your family. It ain’t worth it.

While changing jobs gets you a nice little growth in your income, pursuing a salary keeps you trapped under a spell.

In a job, you might get a 10% raise if you’re lucky.

When you’re self-employed the rise in income can be anywhere from 10% to 10,000%. The harder you work the more you get paid. Whereas working harder for a salary guarantees you of jack sh*t in financial terms.

So where do we go wrong?

Well, a salary gives us financial stability. But when our investment portfolio meets our needs we reach financial independence. They’re not the same.

Don’t mistake “stability” for independence and freedom. Even though they feel similar, they’re not.

Complain about inflation

The grandpas that run our countries don’t care about your complaints.

Gas prices up? So what. A Big Mac costs the same as a BMW? Big deal.

Politicians work for corporations, not the average person. And corporations partly cause inflation by raising prices. Oh, and when they do, raise ’em they normally raise prices more than they need to — because they can.

Complaining and blaming are lame. Read that again.

The best way to destroy inflation and stop lighting money on fire is by learning new high-income skills.

The better your skill stack the more money you’re worth. Youtube can give you a free education on most skills, or you can join an online academy. That’s how you give yourself a pay rise.

Focus on new skills, not the uncontrollable force of inflation.

Say “be greedy when others are fearful” and then *NOT* do it

This famous quote comes from Warren Buffman Buffett.

You’ll hear young punk Gen Zers saying this phrase a lot. They were probably in diapers when it was first said. And my guess is they have no clue what it means.

Anyone can act like a tough guy or gal when times are good and the bull market is raging. But when the economy crashes and we enter a bear market, that’s when true financial courage is either lost or found.

You light money on fire when you don’t take advantage of stock/crypto market crashes, like the one we’re living through now.

These events can often be a once in a generational occurrence. It’s one way the millennial generation I’m a part of can catch up financially and perhaps own a nice shack somewhere someday.

If you saved money during the good times, it’s time to invest that money during the dark times to get an unfair advantage.

Believe there are only two types of people: rich or poor

Money isn’t simple.

If it was we’d all be billionaires rolling a fat one, smoking it, and driving around in our gold-colored Kardashian Benzes.

My friend Andy taught me there are nine levels to the money game:

Level 1: Paycheck to paycheck
Level 2: Learning to budget
Level 3: Paying off bad debt
Level 4: Saving some money
Level 5: 6-months savings
Level 6: Investing some money
Level 7: Earning more money
Level 8: Investing 50%+ of income
Level 9: Financial freedom

The aim is to progress through the various stages. Each level requires more financial education.

Worship college education and forget financial education

I’m sure you’ve met plenty of book-smart, high-IQ geeks who are flat broke.

They worship knowledge and access to information, but completely forget about financial education.

If you don’t understand how money works these things will light your money on fire:

  • Unnecessary taxes
  • The tax of inflation
  • Risky investments
  • House prices that didn’t increase as much as we’re told they did, due to the manipulation of natural price discovery in the global economy.
  • Governments creating money out of thin air that reduces the purchasing power of any dollars you hold.

Trade time for money like a sheep

Trading time to get money isn’t scalable.

It’s literally doing a deal with the devil. The best way not to blow up your life and piss off your family — by working stupidly long hours — is to use money to make more money. How?

Investing. Passive income.

You’ve heard these terms before I’m sure. There’s nothing wrong with working for money, but at some point you want to work less so your money can pick up some of the slack and do work for you.

You’ll never get wealthy working hard. This is a myth made up by the factory worker revolution that died a long time ago.

Money hack: spend less than you earn, then invest the rest to buy back your time in the future.

Let your kids inherit a garage full of junk

That’s what a lot of us get when our grandparents or parents die.

Sure, there are some nice memories of granny fishing and catching a big snapper in the lake. But photos don’t pay bills or give us our freedom back.

If that’s all family gets from your estate after you die, then you’ve lit a lifetime worth of money on fire for no reason.

Kids should inherit real assets: land, businesses, stocks, crypto and real estate.

Don’t buy lots of books because they’re too expensive

Books are some of the greatest teachers.

It’s where we find mentors we could never have in real life and get to gain their wisdom for $20.

A former work colleague told me the other day “With this crazy inflation, I can’t afford books anymore. We’ll just make do with Netflix.”

If money is tight then buy secondhand books. If you’re flat broke then go to your local library and borrow them for free.

Just never light your future on fire by reading nothing at all.

Envy people that make more money than you

Envy and jealousy will destroy your financial wealth.

It’s easy to hate on people who are more financially successful than you. Any dumb-dumb can do that. I see it way too often…

“He’s cheating the system. He’s unethical. Making money online is a scam.”

Meanwhile, the huge opportunity is to learn from people that are further ahead financially than you. The best way is to strike up a conversation with them.

Acknowledge their success. Give them a genuine compliment. Then fire off as many questions as your curiosity will allow.

People that make good money are curious, not full of hate.

Let people “pick your brain”

If you’re an expert in your field and have any form of online presence, you will get questions.

Answering endless questions from emails and direct messages is a great way to light money on fire. There’s a subtle way to use these messages as a financial opportunity.

All you have to say is this:

“Great question. I have a coaching business that can help you if you’re interested.”

That one word “business” tells strangers that you value your time and take what you do for a living, seriously.

The cool thing is some people will say yes. And those yeses can help create a second income stream if you don’t have one already. Nice.

Ignore the place where all financial paths converge

After you’ve read enough about finance you start to realize a common factor: all paths to wealth lead to owning assets.

Own assets, own your future. There’s no other way.

This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.

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