E47: 3 Mental Barriers Standing in the Way of Financial Freedom

Nate: In this episode we will discuss the mental barriers that can keep you from having success financially. And also the things that you need to do to create a proper vision instead of just counting on hope and fantasy to take you where you want to go. She’s Holly and she helps people find financial freedom.

Holly: He’s Nate, he makes sense out of money. This is Dollars and Nonsense, if you follow the herd, you will be slaughtered.

Today we’re going to talk to you a little bit about mental blocks that can prevent you from achieving financial freedom, and we really got this after reading a thought tool by a Rabbi Daniel Lapin, who actually has been a guest on our show. And really what he was talking about is the ability to actually dream and how to be financially free, but not just financially, but in your own life how to dream and things like that.

And there’s things that really get in our way. One thing being just a mental block of preventing you from being able to dream. And he shared a couple examples of mental blocks.

Nate: The first thing he started in his article, which we love Rabbi Lapin, as if you don’t know, he says, “Before we can achieve great things, we have to be able to picture great things.” And a lot of times our reality, where we’re at, is happening just because we can’t imagine a better life. He mentions that a wage earner, a person who just simply clocks in and clocks out and gets an hourly wage, has a hard time imagining what life is like for the people who don’t even have to clock in, who just get paid a large salary, and are not even on the clock. And it’s hard to even relate to that people.

But if you want to get into doing something like that, you have to be able to not just hope for that but create a vision for that too, which we’ll get to in a moment. But you have to be able to picture that life that you actually want, instead of just taking what’s here now as a fixed status for you.

Holly: And I think even in life when we think about it, sometimes the mental block comes from a situation, or circumstances that you’re in at the time, and you don’t really see how you’re ever going to get out of that circumstance or that vision. And even, I’m going to say, when I work with clients, they all have a story they want to tell you, and they need you to really listen and hear. And sometimes, that mental block of the picture that’s been painted can prevent you from even seeing the future or how you can actually solve a way out of it. But I really like to stop and actually say, “What’s the best way I can help this individual? Or is there an option that we’ve thought outside the box?” It’s kind of the kid that grows up in the home where all there is is constant fighting, they have no idea what it’s like to grow up in a family where it’s calm, cool tones, and sympathizing and empathy versus one of always maybe anger and yelling and screaming.

Holly: So really putting yourself in a place mentally that you can see what’s going to happen visually, and that really is just how you think does affect your life. If you don’t ever dream of owning a home, then you always are going to be that person that just rents.

Nate: And there’s a difference between, he mentions, having a fantasy and having a vision as well. There’s two different things. If you have a fantasy about something, it’s like a dream, something that you really don’t think is ever going to become reality. And the reason it probably won’t become reality is simply because you haven’t put in steps to create that reality. So a vision is different than just a hope. So you might see, you might be like earning a wage and wanting to get to the salary, but don’t just envision or be jealous of the people who are there. A vision is you asking the question, how can you actually get to that point? What are some steps you have to take? Because a vision is not just seeing the end goal, it’s also kind of revealing how you get there.

The vision is not going to come to play without challenge, and without accepting some responsibilities along the way.

Holly: And I think with the vision Nate really pointed out, there has to be steps to achieve it or get there. You can’t just say, “As an hourly employee, I want to be a salaried employee.” Maybe you have to go and ask how did you get there? What steps did you take to become salaried? You have to be willing to be disciplined and also put into practice the steps to achieve that vision. I can say I want to own a million dollar house. But if I never even save one dollar I’m earning towards a million dollar house, I’m never going to be able to own a million dollar house. Because if I’m living outside my means, or I’m not saving anything, I can’t ever reach that potential because I’ve never saved anything to get to the potential.

So really the difference between that unrealistic fantasy of, “Hey, I’d love to be a World Cup soccer player and score three goals in a game,” but if I don’t know how to kick a soccer ball, I’m never going to-

Nate: Right.

Holly: Be a World Cup soccer player.

Nate: I mean, not everyone who has a vision achieves it, so you can have a vision and not achieve it, but I can guarantee you no one really ever has a fantasy and actually gets there. You’re not guaranteed to have success just because you lay out a map of how you can do something. But you’re certainly going to have a much higher chance.

But anyway, we’re going to go to a quick break, and then we’re going to come back and actually focus more on the financial side of things, and share some responsibilities you can take to achieve certain visions. So we’re going to have a quick word from our sponsor, Living Wealth, and we’ll be right back.

Announcer: Are you tired of being stressed about money? The Dollars and Nonsense podcast is sponsored by Living Wealth. Visit LivingWealth.com/freedom to get your free Smart Money ebook and sign up for our personal wealth presentation today. Living Wealth is a family owned and operated business, which works with individuals, families, and even businesses to slay the money stress dragon. Our clients receive individual coaching regarding wealth creation, and how to create a retirement income. You’ll be enabled to have cash today, and in the future. Since 1972, Living Wealth has been committed to educating smart people on basic money principles, to assist them in becoming debt free, and finally find financial freedom. Let us help set you free. Remember to visit LivingWealth.com/freedom to receive your free ebook, and even sign up for an individual wealth presentation today.

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Nate: Welcome back. We just got done kind of talking about the difference between a vision and a fantasy, and the mental block. So you need to be able to imagine where you want to be, actually get a picture, it’s always great to see what would you like life to be, but don’t just leave it at that. Create a vision to do it.

And we’re going to kind of transition more to the financial side, because we have so many people who I feel fantasize about being able to send their kids to college, being able to retire, being able to produce a large retirement income, or retire at a very short amount of time.

And to me it seems based on how they’re living that it’s more fantasy than vision, because they have not accepted any strategic responsibilities to get there. So that’s why we wanted to stress to you guys that there are certain ways to do things that you can be successful at, and there’s certain ways that you’re never going to hit … you’re going to disappoint yourself.

What are some things that people tend to do, financially, Holly, that they may not be doing what they need to be doing to get what they want?

Holly: Well I think like when I think of strategies, obligations, one of the things I hear a lot, just as in regards to college, all of a sudden they say, “My kid’s going to school this fall, and we need to pay for my child’ tuition.” And if you ask them, “Well what have you put aside or saved for that?” They maybe have put aside $5,000.00, sometimes 10, but just a state tuition is around $15,000.00, and then they say, “Well, we don’t have the money to pay for that tuition.” And yet I look at the hindsight of well, if you didn’t save the money, if you didn’t even save $1,000.00 a year for their 18 years of their life, for me, that’s public tuition and room and board for the first year. If you haven’t even put that aside, you don’t even have the money to send your kid to college, and the reality is that’s just a state school.

So we don’t actually plan, we vision or fantasize, yes, we want them to go to college and become a doctor and stuff like that, but as parents we didn’t even financially start planning for that. Or we do it right before the tuition’s due. I say in my house a lot, lack of preparation on your part doesn’t constitute and emergency on my part. Basically, if you didn’t prepare to send your kid to college, all of a sudden you’re in this state of emergency that you put yourself in.

Nate: Right, I mean, especially if that was what you wanted to do. That’s the biggest issue. Some parents don’t have a burning desire to pay for their kids … it’s you find a way, I found my own way, I paid for myself to go, you’ve got to do the same thing. If that’s what you want to do, that’s fine, but I mean for those who actually want to send their kids to school, and they come and they talk to Holly or me, and they say, “Next year they’re going to school,” and they want to pay for it, they’re like, “What can we do?” And I say, “Well what have you done so far?” Because one year is not a very long timeframe to figure something out.

Now sure, there’s things outside the box that we can help with, potentially, but in the grand scheme of things, it’s so much better that if you have a burden to send your kid to school, let’s say, that you plan ahead. Because we ran some numbers, and if you were going to start planning for this when they’re five years old, let’s say, you might have to save a couple thousand a year-

Holly: Yes.

Nate: For the next 10, 12 years and you’d have a good amount … maybe it takes two or three thousand dollars a year to send them to school, when you build it up. When they’re 17 and you’re trying to save some money, there’s no financial miracle that can happen most of the time. You’re just hoping to get good scholarships.

Holly: There’s nothing you can invest in that’s going to give you the type of rate of return on your money when you haven’t even saved half of the money-

Nate: Yeah.

Holly: Or even a quarter of the money.

Nate: Unless you happened to get in Bitcoin at the perfect time.

Holly: Time, or a windfall happens with an inheritance, you know?

Nate: Right.

Holly: If that’s your dream, or your kid dreams, and I have a friend at 10 years of age, daughter knew she wanted to be a doctor. And I just have to commend, she is studying to be a doctor now. Nineteen years old, determined, knows what she wants to do. She didn’t have a fantasy, she had a vision. When they were on summer breaks and spring breaks, she’s taking practice tests and learning this and that, so that’s somebody that is taking the necessary steps, she got the grants, the scholarships, she went where she knew she could afford, but she did that, right. And her parents, because she had the vision to do that, they strategically started saving.

But they didn’t all of the sudden when she was 18 go, “I hope you can pay for med school.” Right? No, they started when she was 10. Ten is a lot different than a newborn. When you’re looking at eight, nine, $10,000.00 a year to send them to school.

Nate: The earlier you start doing almost anything, the better. And the same things goes, apart from college, but even like … I’ll talk to somebody, he’s like 50 years old, he says, “I want to retire early,” or something. “And I want to retire when I’m 55.” And I’m thinking okay, that’s great, we’ve got give years to plan, what have you done? And he says, “Well, I’ve got about $50,000.00 in my 401k.” And you’re like, “Time out. Time out, time out. You’re telling me you want to retire in five years, that’s a great vision. I would almost refer to it as a fantasy, but it’s a great vision. It’s not just a wishful thinking, if you really want to, can you do it? And try to live in the realm of, as Lapin said at the very beginning, if you want to do great things, you have to picture great things. So it’s okay to picture it, but you have to actually make some steps towards it. I mean, if someone’s saving $5,000.00 a year, and they don’t have very much money and they say, “I want to retire in five years,” well, so would I, but you have to actually plan for it. I’m not saying five years is too short of a time to do it, don’t just wish for that. There’s a difference between a hope and a vision, as Rabbi Lapin says.

You need to actually not only envision the outcome, but the steps that need to happen. If you’re in real estate, how many properties do you need to get to, and it probably costs money, so how much money can you set aside? And if you can’t set aside enough, can you raise money? There’s certain things you could to get there, but you can’t just sit on the couch and hope it happens.

Holly: Well, I think that that’s part of it. When you think about your strategic responsibilities and obligations, that you also truly have to understand that there are boundaries and limitations. And part of the boundaries and limitations are what we have created, either through mental blocks by not seeing it, or not planning ahead, or by not determining one’s a vision and one’s a fantasy. And so those boundaries and limitations are caused, typically, by ourself. I had a client the other day tell me they want to retire, and they want $2,000.00 a month. The individual happens to be 65 years old, and I said, “Well, do you have any retirement programs?” And the individual said, “I’ve got $50,000.00 in my 401k.” Okay, well $2,000.00 a month-

Nate: You’d have to earn a 50% rate of return-

Holly: Rate of return-

Nate: To manage that.

Holly: In the first year, half of it’s gone. And that’s not even talking taxes or this or that. And if you think Social Security’s going to make up for it, you are sorely mistaken. And the actual comment was, “I think Social Security will kick in, I’ll be fine.” And I had to honestly say to him, “Do you go to the store and see older people working?” He said, “Yeah.” Well, why do you do that? Either because they’re bored, or because they actually, Social Security isn’t meeting their needs and they have to have some type of income to live and survive. And it just makes me sad. You go to a store and you see a 72 year old woman, homeless, no job, can you help? She didn’t plan to be there, and she probably has a story to tell, the one that told me is she’d saved or whatever, but when 2008 hit, basically all of her retirement was gone, just because of lack of planning. She only had form of retirement.

So I think we have to understand that we also are limited by our obligation, by what we have done, and how we have actually prevented ourselves, either with limitations, like only one option. Well, if the market goes south and that’s where the money’s invested, you might not have a retirement. When we think about this, you’ve got to really dream, but when you see that dream, and I say dream because it’s the way I vision things, I look at the steps that it’s going to take to get there. And if you can’t honestly list the steps that it’s going to take to get there, then that’s how you can determine it’s not a vision, it’s a fantasy.

Nate: If you don’t look forward to the steps, that might not be the right vision for you. Later on his article, Rabbi Lapin says that we ought to convert hopeless fantasies into energizing visions by eagerly anticipating the responsibilities that will accompany that. If you see a place where you want to be, financially, let’s say to retire in five years, but you don’t like the idea of living on less than you make and saving money so that you can put money in places that will work for you, then maybe that’s not the right vision to have.

So in other words, if you’re not eagerly anticipating accepting the responsibilities that accompany the end goal, find a vision that you love, but that you actually want to do the steps to get there. Because that will help you get there. So if you want to retire at some point, I don’t care how long ago it is, or if you want to send your kid to school, what kind of responsibilities can you take now to get there, and do they sound fun to you, do they sound like something you can enjoy doing to a certain extent, or that match your personality? Because if they are, then wow, it’s going to be so easy to achieve it. In fact, maybe you should go higher, but if it’s something that causes you anxiety and stress, it might be time to pick a new vision. Because if you’re going to hate your life trying to get there, then it might not be worth it to you.

Holly: And I just like the idea of hey, you might be really good at numbers, so hey I’m going to go be an accountant, or I’m going to be an engineer, and you discover you really hate sitting behind a desk. Then maybe that’s not really the vision for your future. Just because you’re good at math doesn’t mean that that’s the only thing you can do.

When you think like what Nate was saying, you’ve got to visualize those obligations as creating a better future. And if each step doesn’t excite you, you don’t feel like it’s creating a better future for you, step back and say maybe this isn’t the vision I need for myself.

Nate: And for those of you who are listening to this and aren’t really enjoying where you’re at in life, I think it’s probably because you do have just a total lack of vision, you don’t have a dream to achieve, you don’t have something you’re working towards, you’re just going through the motions, and that can get depressing.

So I guess that was the main goal of this, a couple, we want to protect you from that lack of preparation becoming an emergency type of thing. We don’t want you to panic when you’re 65, and you’re wanting to leave work but you didn’t accept the responsibilities it took to get there, or maybe made some mistakes in some fortune, or whether it’s sending your kids to school, we wanted to protect you against them slapping you by surprise so actually create a vision for it. But if you just are going around without a vision at all, then it’s probably the reason why you’re at where you’re at, it’s probably why you’re in debt, it’s probably why you’re not having success, is because it’s hard to have success without a vision, and without accepting the steps to get there.

So I guess this was more of an encouragement than anything. Most of us can achieve almost anything we want to achieve if we can picture, so don’t just accept where you’re at as normal, but also if we’re … if we can eagerly anticipate accepting the new responsibilities that came with that vision, then you are well on your way to blowing it through the roof.

Holly: This is Dollars and Nonsense, if you follow the herd, you will be slaughtered. For free transcripts and resources, please visit LivingWealth.com/.