Are you working at a job you don’t like because you’re not financially independent?
You’re not alone.
The United States is the most overworked developed nation in the world.
Also, working Americans expect to retire at 66. This is an increase of three years from 2002.
This leaves us all wondering how we’re ever going to reach financial independence early. Let alone by our 60s.
There’s a way to get there, though. And get there early.
I’ve already talked about setting money goals and eliminating excuses. But there’s a crucial element missing that I think is blocking our success – visualization.
In this article, I’ll show how visualization can remove barriers to reaching financial independence.
I’ve been reading [amazon link=”1591847397″ title=”Picture Your Prosperity” /] by Ellen Rogin and Lisa Keung lately. The book identifies a critical missing element in reaching success – a prosperity picture.
This is a visual representation of what we want now and what we want in the future. The authors think this is achievable in three steps, which I’ll break down for you in this article.
1. Define your goals
The first thing you need to do is define what your financial goals are. You might already have a few.
Maybe they’re written. And perhaps you’ve discussed them with your spouse.
If you’ve done those things, great work. If you haven’t – now is the time to do the following:
- Define what your financial goals are
- If you already have some financial goals, re-visit them
- Write down a general sense of the goal
- Discuss them with your spouse to make sure you’re on the same page
Know where you are today, and where you want to go tomorrow
To better define your goals, you should be asking questions such as:
- What is my financial situation today?
- What would I like my financial situation to look like in the future?
- How soon would I like to achieve these goals?
Make your goals S.M.A.R.T.
Now it’s time to make them SMART. No, I’m not saying your goals have to be intelligent. I’m saying your goals need to be S.M.A.R.T:
- Specific – if your goals aren’t specific you won’t focus on exactly what you need to do.
- Measurable – without measuring your progress, you might lose interest.
- Achievable – you can’t expect to go from broke to millionaire overnight. Make sure your goals are realistic.
- Relevant – make sure the goal will help you reach financial independence. If it doesn’t, scrap it.
- Time-bound – set milestones to check in at specified intervals; know when you want to meet the goal
Now it’s time to start visualizing. Find photos of things that show what you want to do in the future.
This could be anything, depending on what your goals are.
For example, if you’re going to practice frugality and retire on a beach somewhere, you might print out a picture of a beach.
If you want to buy a boat and sail during retirement, clip an image of a ship from a magazine.
Maybe you just want to have no debt. In that case, you might print off a picture of a credit card statement showing a zero balance.
Or, maybe you need money now. Draw a picture of yourself making money doing your favorite side hustle.
Get creative here. You’ll need it for step 2.
2. Visualize your goals
Now that you’ve established your goals, it’s time to make some visualizations. But before we do that, let’s look at why visualization is so powerful.
According to the authors, visualizing your goals will bring them closer. Science explains this.
It’s proven that visualization works. This is due to a part of your brain known as the reticular activating system (RAS).
It works behind the scenes on a non-conscious level. It pulls the pertinent information away from useless information for you.
For instance, I recently bought a 2015 black Honda Fit. Soon after I started driving the car, I began to notice not only other Honda Fits, but other black Honda Fits.
It’s not because there are suddenly more Fits on the road. My RAS is telling me that the combination of the Honda Fit and the color black are relevant.
This system in my brain is putting the information I want on a silver platter for me, whether I realize it or not.
Harvard Medical School professor Dr. Srinivasan Pillay says once we can visualize an action, it’s easier to do. It’s as if we’ve already done the work or achieved the goal.
Say you were to continuously visualize yourself paying off your debt, saving $3 million, and retiring to a remote beach.
Your chances of success are now far higher than if you hadn’t visualized it.
The authors use an example of Olympic athletes to explain this point.
In a test, four groups of Olympic athletes all did different types of workout regimens. Each group did a varying degree of physical and mental training.
Scientists found that the group with the most mental training and least physical training were the most successful. In fact, imagery and visualization is a favorite mental training exercise for many Olympic athletes.
Take a look at this video on how Sadie Bjornsen does it:
Now you can see how powerful a simple concept like visualization can be with your goals. As I mentioned before, the authors talk about something called a prosperity picture.
This is a way of combining visualization with your own goals. Here are the steps to draw your own prosperity picture:
Start with a blank sheet of paper.
Draw a horizontal axis and call it “time frame” – it should run from the present into the distant future.
Draw a vertical axis and call it “finances.” It should run from “broke” (the bottom) to “financial independence” (the top).
The authors use different verbiage, but I’m using what makes sense for this. Feel free to change the wording around, so it works for you.
You now have a four-block prosperity picture that looks something like this:
The prosperity picture represents different combinations of money and time.
Remember those pictures I told you to print back in step 1?
You can now add them to the prosperity picture in the boxes they belong, according to your goals.
For example, say one of your financial goals is to buy a home. You’re currently broke.
You might put a picture of what you hope your first home to look like in the upper right box. This is because it’ll take you a more extended period, and a lot of financial gains to get there.
Do this for all your financial goals (you may end up needing a poster board!).
3. Review and revisit
Congrats if you’ve gotten this far. You’ve sunk a lot of time into determining your goals, writing them out, printing off pictures, and doing a cool financial art project.
Don’t stop now.
I suggest you look at it every day and re-visit your goals once a month. Remember, it’s scientifically proven that you’re more likely to find success in your goals when you visualize them.
Visualization alone won’t work
Now, visualization is all fine and well, but what if you have no money? What if you’re not in control of your finances?
Visualizing your goals will help you get there, but it won’t work on its own. There are a few steps you’ll need to take after you’ve created your prosperity picture.
1. Understand your financial position
Know where your money is going by using a tool like Personal Capital. Link your accounts and get a sense of where you’re spending your money. Here’s a great guide on reviewing your expenses with Personal Capital.
Pull a copy of your credit report and find out exactly what you owe. You’re entitled to one free copy of your credit report each year from each of the three major credit reporting agencies. Take advantage of that.
Check in on all your bank and investment accounts to see what kind of assets you have. This should be fairly simple to do online.
Determine the value of your home (if you own it) using a tool like Zillow. Just plug in your address and it’ll spit out an estimated value.
If there are any other types of assets and debts, make sure you’re jotting those down. The point here is to get a high-level look at where you stand, financially.
2. Create a budget
This works for some, for others it doesn’t. If you’re disciplined enough to stick to a budget and categorize all your expenses each month, go for it.
If you decide to create a budget, I’d strongly recommend using You Need A Budget (YNAB). It’s by far the best tool out there for those who want to create a budget and follow it.
I used to hate budgeting, but since using YNAB I’ve become not only a better budgeter but more connected with my money. I feel like I have a better grip on what money I’m earning and what money is being spent (and where).
If you don’t elect to create a budget, I’d recommend taking a set dollar amount out of each paycheck in advance. Put that money toward debt and savings. This is very much in line with what David Bach recommends in the [amazon link=”0451499085″ title=”Automatic Millionaire” /].
3. Get rid of debt
This shouldn’t be a news flash to anyone by now. Having debt is only going to keep you further away from reaching your goals.
Choose a debt payoff method, such as the debt snowball or debt avalanche method. These two methods work wonders for holding you accountable when you want to, for example, eliminate credit card debt.
You don’t have to be extreme, either. I always recommend a balanced approach.
If you’ve followed the recommendation above and created a budget, you can carve out a set dollar amount to go toward debt each month. The rest can be for saving.
Regardless of how you do it, it’s critical to work on a plan to pay off your debt right away.
4. Build a safety net
You can do this at the same time as paying off debt if you’re using a balanced approach. Yes, it’ll be slower, but slow and steady wins the race.
Put away as much money as you can each month until you’ve built an emergency savings of at least six months worth of expenses.
Again, creating a budget will help this process. If you don’t have a direction or end goal in mind, you may never get there. YNAB does a great job at allowing you to create goals and work toward them (this works great for savings).
Conclusion and next steps
This process should help you get an excellent start at achieving financial independence. Or maybe you’re already well on your way, and this will give you a boost.
Remember, you are the only one that can control your destiny.
It’s entirely up to you if you want to retire early or work at a job you dislike for the rest of your life.
You can change your expected outcomes by setting meaningful, S.M.A.R.T. goals and visualizing them.
And don’t forget to have a little fun while you’re doing it.
Action for today: take 15 minutes to draw a prosperity picture and print out some images that tie to your goals. Let me know how it’s going!
Over to you:
What steps have you taken to visualize your debt paydown? What has worked and what hasn’t? Please share your feedback in the comments section below!