What Is Your Financial Truth? by Kim Kiyosaki

What Is Your Financial Truth?

Financial freedom starts with knowing where your money is today

Have you ever noticed how easily little white lies roll off our tongues? Like the time you found yourself assuring your physician that you do indeed workout five times a week, when in reality you barely remember where your gym is located.

Now, these little white lies may seem harmless at the time, but they can start becoming ingrained in our minds. And when they do, we start to believe them ourselves.

This can be especially true when it comes to money. It’s so easy to lie to others (and ourselves) about what we really spend on eating out, clothes, car payments, mortgages or vacations. And it’s easy to pretend our investments are making money — or at least breaking even.

Time For a Reality Check

Ok, it’s time to get real. It’s time to separate fact from fiction. It’s time to ask yourself these questions and provide honest answers: What are you doing with your money? Where is your money going? How is your money spent each month? Are you being wise with your money?

Now, perhaps you’ll have to crunch some numbers and do some research to come up with the correct answers, and that’s OK. We all lead busy lives and it can be hard to stay on top of our finances.

But once you have that information compiled, you may be faced with an ugly truth — one you tried to keep hidden deep down, because you didn’t want to face it: You haven’t made good financial decisions.

It can be uncomfortable to face the facts and learn that you’re actually spending more every month than you’re making. You may learn that the money you placed in that mutual fund, which the “experts” told you would make 10 percent, actually lost 20 percent last year. And you’re not alone — read Jamie’s story below for a real-life example of how shocking it can be to learn your financial truth.

Jamie’s Financial Surprise

“One day my husband and I were having a conversation about our future and planning for retirement. We have no savings, no investments, we don’t own any properties, and we live paycheck to paycheck. We are both very naive when it comes to finances and have absolutely no knowledge about investing or creating financial security.

We were expecting to receive our tax return soon, so we talked about opening an individual retirement account (IRA). We knew absolutely nothing about this except that people opened these to save money for retirement. We went to our bank to open an IRA. They were more than happy to assist us. We sat down with the regular bank teller and went through the steps with little-to-no explanation of what this process means and what really happens with our money. I was a little concerned that someone in the financial advising area did not come out and speak with us to make sure we fully understood what we were doing. They were quick to take our $500 and have us sign papers. Even so, after the process, we walked out of the bank thinking we had made the right decision and that our financial future was going to be great.

A year later, I was working on my financial statement with a mentor and we discussed the IRA. I pulled out our statement and showed her that we had made 41 cents last year. She responded, “You know that is a return on your money of about zero. Silver went up 31 cents in the past 24 hours, and 75% in the last year.”

What an eye opener! I thought the 41 cents was what it was supposed to be. I thought I was doing well! My husband and I are now getting ourselves educated through books, seminars, and mentors. We play the CASHFLOW 101 game often with our entire family. We are determined to be financially free together.”

The Truth Shall Set You Free

When you read Jamie’s story, did you see echoes of your financial reality? That’s all right. It’s not easy to be open and honest with yourself about an embarrassing or unexpected situation. It also means you are now free to start making changes.

When it comes to money, the truth will set you free. Today is the day to start being honest with where you are financially and to start learning new truths about money and investing.

Commit to taking these five steps toward finding financial freedom:

  1. Income. Tell yourself the truth about any and all income that comes into your household.
  2. Expenses. Be brutally honest about your expenses. What exactly do you spend every month? This is not a matter of your numbers looking good. It’s a matter of knowing where you are — period.
  3. Factor in your lifestyle. If you enjoy eating out every night, then financial freedom for you had better include eating out every night. Financial independence means having the money to live the life you want, not just having enough to survive. Financial independence is not living below your means. I would rather expand my means and have my money work hard for me so that I can create the financial life I want for myself and my family. Being honest about your expenses now is important, because this sets you up to have the financial future you desire.
  4. Ask these questions. What investments do I own? Do I have stocks, bonds, mutual funds, retirement plans, real estate (other than your home), business investments, gold, or silver? What do I have that is making me money without me working for it? What price did I pay for the investments? What is happening with that investment today?
  5. Open your mail. It’s not uncommon to not want to open that investment-fund statement when you’re guessing it may be worth a lot less than you put into it. The same goes for your credit card bill. Look at every statement. That one action alone can be a valuable eye-opener.

If you’d like to read more about how to rise above the obstacles you’re currently facing, I highly recommend starting with my book, “It’s Rising Time.” Taking action will help turn your feelings of helplessness into the fire that fuels your transformation. And there’s no better time to begin than today.

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