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The Four Barriers To Financial Progression
BY FRANK PAUL - 19/06/2016 | VIEW MORE ARTICLES BY FRANK PAUL

The journey towards financial independence often needs to begin with us getting out of our own way.


Whether it's a lack of knowledge, resources or motivation, finding out what's holding you back from financial security is the first step towards change.

Is your Visa or MasterCard always right on its credit limit and just about ready to implode? Are you too scared to work out the amount of superannuation you will actually need to live on after you retire - because you know your compulsory super will never get anywhere near there? Is buying the odd lottery ticket the extent of your planning for the future?

Believe it or not, the four most common reasons you are in financial strife may be found right inside your own mind.

There are four common blocks that hold people back. These are paradigms that prevent people from progressing towards financial security. If you know what they are and can do something to change them, you could change your whole life.

1. We don't know WHAT to do

A lot of people simply have no idea what wealth creation is all about it. After all, they don't have a subject called “Personal Wealth Creation” at school (maybe they should).

While parents do many wonderful things, they can't teach us how to create wealth unless they understand this process themselves.

The starting point of every wealth creation plan is quite simple. You need to begin with a vision. An idea of where you want to end up. You can't get anywhere unless you have a vision of where you want to go.

You cannot get to Brisbane by holding a map of Victoria.

2. We don't know HOW to do it

There is more information available than ever before. But information is not knowledge and certainly not wisdom.

Some people grow up with an understanding of money they absorb from their parents or a family member. Some people are born entrepreneurs. But for most, it is not easy to know where to start.

Having the vision is the all important first step. But many who have a dream of financial security, or wish they could change the direction of their lives, just don't know how to make that vision a reality.

To do that two things are necessary. The first is a plan. A detailed map of how to get from where you are now to where you want to be. Without a plan, you're driving blind.

The second essential is time, which means patience and commitment to the plan to make it work. Why is time so important? Simply because if you choose your investments wisely and the plan is sound, time will usually do the rest.

3. We don't have the RESOURCES

We may have the what and the how sorted, but possibly lack the means.

Of all the resources, time is the greatest. The more time you have the lower the incline towards the vision. As time shortens, the steeper it gets.

Wealth creation demands discipline. We have to understand that there is a price to pay for every goal, and if we want that goal enough, there are usually sacrifices.

Every wealth creation plan has to start from where you are now. Your income and your assets. Most have a fixed amount coming in each month, and if we want to accumulate enough money to invest, we have to save some of it, or find ways of bringing in new income.

Sacrifices are hardly ever fun and never easy, and we may have to redefine the terms “essential” and “non-essential”, but if we have a vision and we have a plan to achieve that vision, doing without the non-essentials is a lot easier.

4. We don't WANT to do it

Some say they are “simply not interested in money”, but most people who say they are not interested in creating wealth either already have it or know that it is on the way (wealthy parents), or are choosing to opt out of big city life, or simply don’t understand the eventual consequences of their disinterest.

Not wanting to accumulate wealth is the same as not wanting to be financially independent. The following questions need good answers: how long am I likely to live? (It could easily be 90 years or more in Australia right now). When will I stop working? How many years will I have to support myself? How much do I want/need to support myself?

The journey towards financial independence often needs to begin with us getting out of our own way.



View More Articles By Frank Paul

Frank Paul is Chief Operating Officer & Head of Advice Services with Spring Financial Group. Frank has over 20 years' experience in financial planning and investment advisory.

Frank has extensive experience in private client advising and the management of financial services operations. Frank is actively involved in the recruitment and management of advisory personnel and heads the advisory panel. He holds a Master of Commerce (Financial Planning) and a Dip. Financial Planning and has authored literally dozens of financial education publications.


 

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