We love helping people find their uncommon path – a path where they are doing the things God has gifted them to do, and ultimately achieving the time and money freedom to pursue that path, wherever it takes them.
After working together with our clients for the past 7 years, sharing in their hopes and dreams, we’ve learned a few things. We’ve condensed that experience, into an Uncommon Life Roadmap consisting of 4 main steps.
Step 1 – You have to have a budget
This seems like a very basic step, but so many of the people we meet with are just flying by the seat of their pants in terms of their family finances. Crossing your fingers after guesstimating that your income will cover your basic monthly expenses is ok if you are not trying to build your wealth, but to really set yourself up for success, you need to know your numbers.
This is a basic starting point to the Uncommon Life. If you don’t have a clear handle on your numbers, you cannot scale your dollars into financial independence.
One question we ask clients is, “If you don’t have a clear sense of the day-to-day and what you need to live on, how will you ever know when you are financially free?” In the next post, we will get into some specific budgeting tools, but just understand that step one is knowing your numbers.
Step 2 – Building that Emergency Fund and Cash Position
Once you have a budget established, you know how much you have left after you meet all of your monthly obligations. Now it’s time to put a savings cushion in place – an emergency fund.
Here’s a scenario for building your emergency fund. Let’s say you spend $6,000 a month and you bring in $9,000 a month in household income. That’s $3,000 a month towards your emergency fund.
Our rule of thumb is to have a 6-month reserve easily accessible to meet your basic obligations. So, in this scenario, a 6-month emergency fund would equal $36,000 in cash. If you are saving $3,000 a month then it should take you 12 months to save $36,000.
Now, what about building your cash position? This can be done through what we call Uncommon Banking. If you are new to the concept, Uncommon Banking involves leveraging cash-value life insurance to create a banking system where you have access to an ever-increasing pool of cash, an ever-increasing return on that pool in the form of dividends or interest, plus tax protection. It’s pretty cool. This method of saving provides you with a resource to draw from if and when an opportunity comes along for a sound investment. Which brings us to step 3.
Step 3 – Making Sound Investments
Now that you have a budget locked down, have an emergency fund and an Uncommon Banking strategy in place, it’s time to start investing.
Investments are personal and can take many forms. It’s not just about stocks and bonds. When we talk about investment, it all starts with 7 Sources of Residual Income.
Through this framework which includes traditional investments along with more uncommon things like real estate, business ownership, and/or royalties, we want to help create multiple wealth pathways.
So, an investment strategy needs to be tailored to your goals, your gifts, and your season in life in order to take advantage of opportunities beyond mutual funds and stocks.
Step 4 – Time Freedom
Time freedom means reaching the point where your monthly expenses are covered by your residual income. Because financial freedom = time freedom. Now you have the tools to answer that earlier question, “how will you ever know when you are financially free?”
Does this mean a life of complete leisure? For some, it might. But most of the time, when people love what they do – the thing that gives them energy and purpose – there’s no need to stop. Warren Buffet doesn’t have to work, but he loves what he does.
Time freedom does mean you can set your own schedule, your business concerns can function without you there day-to-day, and you know your bases are covered now and into the future.
We want you to build this kind of Uncommon Life. Over the next several months, we’ll be sharing our thoughts on the backbone of our entire Uncommon Life philosophy. So stay tuned as we share what we’ve come to see as the pivotal steps needed in order to step out of the common grind and into the Uncommon Life!