| | | | | | | | Rooster's Crow | | | What was your investment return in 2016? If you don't know, you've got work to do. The average investor earns a measly 2.3% annually. That's barely enough to keep up with inflation, let alone build liberating wealth. Use your end-of-year statements to determine your performance for 2016. If it's less than 8%, it's time to change your strategy. | | | |
Rooster's Crow
What was your investment return in 2016? If you don't know, you've got work to do. The average investor earns a measly 2.3% annually. That's barely enough to keep up with inflation, let alone build liberating wealth. Use your end-of-year statements to determine your performance for 2016. If it's less than 8%, it's time to change your strategy. Are you truly free? What the heck does that even mean?
They're questions we often ask ourselves... and questions that folks often ask us.
Last week, in fact, a curious reader, whom we applaud for paying attention, noticed something peculiar about our definition of Liberty.
Hello! Fantastic blog or e-letter or however Manward is defined.
I do have a question about the Liberty definition you use. It begins "Freedom from control... but granted by an external source; self-determination."
Should it read "Not granted by an external source"? Or am I misunderstanding? - Ben A.
Ah, Ben, we're so glad you asked. We have rich feelings on the subject.
Let's start by defining two key terms: freedom and liberty.
Our culture tends to think the two terms are interchangeable. Really, they are not. There are critical differences.
Understanding them will change the way you think... live... and invest.
The Root of the Issue
Freedom is a word of German origin that simply means the ability to make decisions or perform actions without external control.
But liberty, with its French roots, means freedom that has been granted by some sort of external element, typically our society or government.
Boiled down... freedom is something we are born with. Liberty is something we must fight for.
That's a critical idea. It's why our definition says liberty must be granted by an external force.
Here's where it's vital to know the slight but powerful nuances of each word...
America's Founding Fathers believed freedom was a God-given right. We all know that. But few folks know that they left it up to the government to grant its citizens the liberties to take advantage of that right.
All we have to do is look around to realize they got it wrong.
Yes, it's up to some sort of external force. But no government will ever grant true liberty. To think one will is preposterous.
The true answer, we're convinced, is wealth. Nothing has liberated more people than wealth.
By the very nature of our being, we all have the freedom to travel where we want and to do what we want. We simply don't have the liberty to do it. And it's not just our government holding us back.
Our wealth plays a huge role.
Likewise, we're all free to pick the occupation we want. There's no law that says one person must be a teacher and another must be a doctor. If we've got the freedom, then why are most folks toiling at a job they don't love?
It's not the government.
Again, you know the answer... It's because their wealth has not liberated them.
Building Wealth - Building Liberty
There are three reasons - despite the societal unease of the idea - that we use to bond the ideas of money and liberty.
The first is that, if we have money, we don't have everyday anxieties about it. Money offers peace of mind. It's liberating.
If we have money, we don't have to worry about not making the rent check. We don't have to worry about buying groceries. And we don't have to worry about the bank stapling a foreclosure notice to our front door.
Eliminating those fears grants us the liberty to live a deeper life.
Free from those stresses, money liberates us to pursue our passions.
But as we mentioned above, it's not just our hobbies. Financial liberty also gives us the ability to take a job that may be less lucrative but more fulfilling.
Folks who have the freedom to pursue their passions live much happier and more successful lives.
Finally, money deeply affects our Connections. We're all innately free to spend as much time with friends and family as we like. So why don't we?
Money, of course. We need to make a living.
Again, only with wealth can you take advantage of your freedom.
Of course, all of this begs a very tough question.
How do you get there?
We often hear about the idea of "financial freedom." I argue it's the most overused and ballyhooed phrase in the personal finance industry.
In fact, following most of the mainstream advice that supposedly leads to financial freedom leads to nothing but mediocrity.
Pay off your debt... Create a budget... Save your money...
Earth-shattering ideas, right? That must be how Buffett made his fortune.
All those high-polished pitches for financial freedom are not wrong. But they are far from right. They'll get you out of poverty, but they won't get you where you truly want to go.
No. To get there, you must think differently. You must invest differently. It takes a shrewd understanding of the markets. And it takes a very real commitment to build wealth.
You already have freedom. You were born with it. Now you - and only you - must liberate it.
Be well,
Andy | 
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