How to find your core motivation to be financially free?

There’s hardware behind your finances. This hardware determines your investment methodology, and your stock picks. I am one of the many providers of this hardware – I teach folks how to build portfolios that make financial freedom possible. Understanding the hardware involves mathematics and logic.

But we know for a fact that not everyone who has the proper hardware succeed in attaining financial freedom. Otherwise, actuarial scientists and finance majors will be the wealthiest people on Earth.

The missing X-Factor is the software.

Today we will discuss the softer aspects of attaining financial freedom.

• What is your core motivation to succeed?
• Does this core motivation align itself with what you think financial freedom is?

To figure out this core motivation, we need to tell ourselves a story about our own lives.

What is our narrative?

Imagine a period in your life where you are incredibly proud of your achievement, which can be work or family-related and tell a story of your life to yourself

The first step would be to string multiple achievements milestones into a story about yourself. Just imagine writing your autobiography and what you intend to include in it.

In my case, to sustain myself the first time on my investment income at age 32 was one of the most significant achievements of my life, such that it is a cornerstone of my self-esteem. I scrimped, saved, and lowered my expenses so much that I could use my investment income to pay for basic living expenses, including taxes and allowance for my parents.

Living on dividends opened up the option of farming my entire paycheck into financial markets even during the Great Recession of 2009.

Seven years later, sick of the toxic workplace I worked for, I resigned without a new offer and entered law school when my family had no breadwinner for four years.

After getting admitted to the Bar after four years without an income, I ended up wealthier because I learned how to leverage my portfolio, so I did not need to sustain a legal career, which made me unhappier the more I did it.

Try to figure what it is about the story that made you feel so proud of yourself

Every achievement that you would have listed would give you a corresponding reason why you consider this a proud moment in your life. It is now time to break your story down and talk about the feelings you experienced when you knew that you had attained a significant milestone in your life.

When I was able to live on my investment income, the idea was that if I could put my mind to it, I could achieve things that none of my colleagues could. The Financial Independence Retire Early (FIRE) movement was not significant at that time. More importantly, I get to do whatever I want about my paycheck, including saving 100% of it. It was ultimate control when I had gained the option not to spend it at all.

Parlaying my financial independence seven years later to leave a toxic workplace after being screamed at in the office and almost giving the middle finger to my supervisor made me feel very much in control of my life. I know that no boss or supervisor can control me once my investment income exceeds my monthly pay. This is about regaining the power and control that many middle-aged professionals lack in the modern workplace.

Finally, enduring law school was just one part of the equation where I showed that I could hold my own against classmates half my age. But more importantly, it was the option to walk away even after being admitted to the Bar. Legal work was not favourable in 2018, and I was itching to try my hand at building a product of my own. That decision made me the target of ridicule among some relatives, but I’m in control of my life, and I decide how I get to feed my family.

Is there a commonality in the way your stories evoke in you? If there is, this is your core motivation.

After going through the last mental exercise, you would find a common thread that binds all your achievements together.

That is your core motivation.

In my case, having a sense of control over my destiny is my primary motivation. I was able to starve to meet my target of living within my investment income. I wasn’t afraid to wear old clothes and look as untrendy as possible. All this to look at a lousy supervisor in the eye and say, “ I quit. I retire. Goodbye.”

Can this motivation be tied to your quest for financial freedom or investment approach?

As you go through your own story, your primary motivation may not be conducive to financial freedom.

Imagine a top salesman who climbed the ranks of his company by getting larger and larger accounts. He did this by elevating his tastes, joining better networks and getting noticed by key decision-makers.

His core motivation is to get someone’s attention. To be noticed.

It would not be helpful to get this top salesman to build a portfolio of fuddy-duddy dividend stocks so that he can live on $1,200 of his investment income a day. For this person, investing may be a performative art, and he should go for a growth investment program or dabble in cryptocurrency, at least to sound more brilliant in a cocktail party.

Think about your software

Most of the time, I tell my students to focus on the complex logic of investing. The hardware takes time to learn, and you need to expend considerable effort to get it right. But the software will determine whether you can summon the willpower to execute your investment ideas and whether they fit your core motivations in life.

So do think about your motivations, and if it aligns with the need to find financial freedom, I hope to see you in class soon!