The 9 Steps to Financial Freedom

The 9 Steps to Financial Freedom


Suze Orman's book stands out from the field (she covers most of the topics other writers do) are two very useful insights:

(1) That our psychology and subconscious has a lot to do with how we do (or do not) manage money;

And (2) money, in and of itself, does not have power over us; indeed, it is the other way around -- the way we manage our money speaks about who we are.


Other than these two insights (which are eloquently communicated) Ms. Orman covers the basics - as tortuga has posted - "get out of debt, make sure your family is protected (emergency fund, life insurance, etc.), invest for retirement and college for the kids," etc.

She does a very good job in the relatively short book of covering these fields in sufficient depth. A note to those who dislike her philosophical/religious diversions -- do not let them stand in the way of receiving some excellent advice.

Honestly, she talks down to my level and wifey's much like the Gardner brothers of The Motely Fool fame "To amuse, enlighten and enrich" type of prose.


According to Suze:

Step 1

"The road to financial freedom begins not in a bank or even in a financial planner's office but in your head. It begins with your thoughts.

And those thoughts, more often than not, stems from our seemingly forgotten past with money."

Step back in time to see how your feelings about money can be traced to your past. We all have "money messages" passed down from generation to generation.

When Suze Orman was 13 she watched her father dive into the flames of his burning take-out chicken shack in order to rescue his cash register. In that moment Orman learned that money was more important than life itself. And so it became her quest to be rich. But years later, when Orman became a wealthy broker with a huge investment firm, she was profoundly unhappy. What went wrong? She had not yet achieved financial freedom. In her nine-step program, Orman covers the ingredients to financial success--confronting our beliefs and fears, learning the nuts and bolts (and insiders secrets!) of savvy management, and finding the spiritual trust that leads to abundance.


Step 2

"Facing your fears and creating new truths.

Don't you find it strange that you can raise a family, hold down a job, fix things that are broken, and deal with everything that comes up in your life – except your money? "

The book sets the premise that you never learn to deal with money successfully until you overcome your fear of money...of not having enough, and fear of taking action with your money. It's about how to make money work for you so you have more than enough because you learn to devote energy, time, and understanding, to money. The three ways of getting money in this world:

(1) Work for it
(2) Inherit it
(3) Invest the money you save (the most powerful, respectful way to get money there is) e.g., DRIPing.


Step 3

"Being honest with yourself."

Quit using plastic cards for money. They are addictive and destructive as drugs, giving you a quick fix by satisfying temporary desires.


Step 4

"Being responsible with those you love."

Establish life insurance, wills, power of attorney, estate planning, etc


Step 5.

"Being respectful of yourself and your money."

If you do what needs to be done with money, you will attract money to you.


Step 6

"Trusting yourself more than you trust others."

You and your money must keep good company. Credit cards are never good company. Get out of debt. Respect yourself and your money by making every penny work for you. Trust yourself more than you trust others. Find the "little voice" inside you; listen to what it has to say.


Step 7

"Being open to receive all that you are meant to have."

When you are in control of your money and have enough to be generous, money flows to you.


Step 8

"Understanding the ebb and flow of the money cycle."

Money has natural cycles as it ebbs and flows through your life. Money flows through our lives like water...plentiful at times...a trickle other times. These transitions are exciting or scary, but are all part of the natural cycles of money. There are two important reactions to these cycles:

(1) You must take the long view of your financial future
(2) You must believe that what happens is positive and let it be.


Step 9

"Recognizing true wealth."

If you choose to entrust your money to someone else, and you really don't know how money works, unscrupulous people can take advantage of you. Further, you discover the thrill that comes from wanting to deal with your money instead of just having to deal with it.

Get in touch with your money; delight in spending it as you did as a child, but enjoy choosing not to spend it too; take pleasure in putting some away for later.

Most of us need to spend our money differently. Not drastic action like getting by with one car. Unrealistic budget cuts, like diets, never work.

Rather, decide to spend $25 to $30 less per month from fifteen or twenty of your spending categories; with each decision you make to spend less, you are gaining power over your money, and you will find creative ways to reduce your spending so you hardly notice. Rather than being dictated by a restriction, your actions are guided by the choices you make. This is the hardest step to financial freedom; you become honest with yourself about how you really stand.

LBYM! Spend less by putting your money away before you see it. Pay yourself first.

It's not what you make, but what you keep. Time plays an essential role in building future wealth because the longer you contribute, the more you'll have and with time, the contributions you have already made do more work for you. The thing that makes time so powerful is our youth and compounding.

The important thing is to understand the nature of money and take the right steps to make it work for you. Recognize true wealth. People can not be measured by their net worth. Money does not make you financially free; only you can make yourself financially free.