MONEY Master the Game: 7 Simple Steps to Financial Freedom (53 page)

Many people have a lot of money but not much lifestyle. They spend their lives watching numbers accumulate in a bank account and miss out on the joy and enjoyment they can create and share along the way.

I remember that when I made my first Growth Bucket hits early in my career, my idea of a jackpot was to buy two new suits because they were on sale at a Men’s Warehouse–like store. Or maybe take a vacation in Hawaii. That was a big deal for me back then!

My resort in Fiji was a much bigger dream that came true. As I shared with you, when I was 24 years old, I fell in love with the turquoise waters of the South Pacific islands. It was like my heart had found a home. I wanted a refuge for myself and my friends and family. Now, over the years, Namale Resort and Spa has become a pretty sizeable asset because I built it up and turned it into one of the top destinations in the South Pacific. But that’s just a bonus. In fact, it’s the number one resort in Fiji for more than ten years, and Oprah selected it as her favorite place to go last year. A jackpot on top of the dream that created it.

Your dreams are not designed to give you a financial payoff, they are designed to give you a greater quality of life.
And isn’t that why you’ve filled the first two buckets in the first place? But you’ve got to practice some restraint here, too. If you take all your money and put it only in the Dream Bucket, you’re likely to end up going broke like Willie Nelson. So it’s a matter of balance. And the jackpots in your Dream Bucket don’t have to be just for yourself. The best jackpots are the ones you give to others.

Dreams are the touchstones of our character.

—HENRY DAVID THOREAU

Maybe you’re like me, and you just love giving gifts. And the best gifts are the ones that are unexpected.

My mother never had money when she was young, and we always struggled as a family, living in cheap housing east of LA, where the nearly daily smog alerts announced on the news let us know it wasn’t safe to walk outside.

And so one day, after my business started taking off, I asked my mom to
help me check out a condo I was thinking of buying on the water in Huntington Beach. I walked her through it and showed her the magnificent ocean views. Then we stepped out on the beach and breathed the salt air.

“I really love this place, but I want your final word,” I told her. “What do you think?”

“Are you kidding?” she said. “This is incredible! Can you imagine coming from where we came from, and now you’re going to live here?”

“So you think it’s the right place, Mom?”

“Oh, it’s unbelievable!”

Then I handed her the keys.

“What’s this?” she asked.

“It’s yours, Mom.”

I’ll never forget the look of astonishment on her face and then tears of joy. My mom has passed away now, but I still remember those moments so vividly as some of the favorite of my life.

You don’t have to wait. You could do this, too.
You can fulfill your dreams. If you want it badly enough, you’ll find a way.

Not long after I gave my mother that condo, I met with a group of a hundred or so fifth graders from a poor neighborhood at a school in Houston, Texas. Most of them were on a track that would never get them to college. So I decided then and there to make a contract with them. I would pay for their four-year college education if they kept a B average and stayed out of trouble. I made it clear that with focus, anyone could be above average, and I would provide mentoring to support them. I had a couple of key criteria: They had to stay out of jail. They couldn’t get pregnant before graduating high school. Most importantly, they needed to contribute 20 hours of service per year to some organization in their community. Why did I add this? College is wonderful, but what was even more important to me was to teach them they had something to give, not just something to get in life. I had no idea how I was going to pay for it in the long run, but I was completely committed, and I signed a legally binding contract requiring me to deliver the funds. It’s funny how motivating it can be when you have no choice but to move forward. I always say,
if you want to take the island, you have to burn your boats!
So I signed those contracts. Twenty-three of those kids worked
with me from the fifth grade all the way to college. Several went on to graduate school, including law school! I call them my champions. Today they are social workers, business owners, and parents. Just a few years ago, we had a reunion, and I got to hear the magnificent stories of how early-in-life giving to others had become a lifelong pattern. How it caused them to believe they had real worth in life. How it gave them such joy to give, and how many of them now are teaching this to their own children.

I’m telling you this because you don’t need to wait until you’re absolutely ready to fulfill your dream. You just do it, and you find a way, and grace will find you.
Grace comes when you commit to doing something that will serve more than just yourself—some would call it luck or coincidence. I leave it to you to decide what to believe. Just know that when you give your all, the rewards are infinite.
I really believe motive does matter. But it doesn’t mean that it can’t benefit you too, right?

Jackpots can help you create more wealth, because
the key to creating wealth is to unleash your creativity
and find a way to do more for others than anyone else is doing.
If you find a way to add more value than anyone else, you can also find a way to prosper personally.
That can apply to your own life as well as the lives of others. Remember when we talked about speeding up your plan, how if you wish to be great, learn to become the servant of many? We already know that life supports what supports more life. And by supporting life, you lift yourself up as well, and more bounty comes to you.

Give yourself peace of mind. You deserve to be happy. You deserve delight.

—HANNAH ARENDT

So how do you fill your Dream Bucket? Let’s talk about three ways. First, when you score a big hit, like that $10,000 bonus we were talking about earlier in the last chapter. Or, second, if your Risk/Growth Bucket gets a positive hit, and you score big. Just like in Vegas, it might be time to take some of the risk off the table. An approach many of my students use is to take those profits, divide them up, and invest them back in a fixed proportion: say,
one-third in Security, one-third in Risk/Growth, and one-third in Dream. In the case of that bonus, that would be about $3,333 for your Dream Bucket.

By putting one-third of your Risk/Growth Bucket money into Security, it’s like taking money off the table to help speed the growth of your most secure investments, and with it your peace of mind. By leaving one-third in Growth, you continue to take risks with a potential larger upside, but you’re doing it with your winnings. By putting one-third in your Dream Bucket, you’re creating a jackpot that you can enjoy today. This will stimulate and excite you in ways that will likely cause you to want to earn more, save more, and invest even more effectively—because of the rewards today, not just some day in the future.

The third way to fill your Dream Bucket is to save a set percentage of your income and sock it away, building it up until you’re able to purchase your dreams—whether that be your first home, a car, a vacation, or those fun little items that will light you up today. But keep in mind, this is not taking any money out of what you are already saving for your Freedom Fund. That’s sacred and untouchable money! But you can find ways to increase the amounts you can put in your Freedom Fund
and
your Dream Bucket. Here’s a quick reminder from the “Speed It Up!” chapters:

• Save more and invest the difference.

• Earn more and invest the difference.

• Reduce fees and taxes and invest the difference.

• Get better returns.

• Change your lifestyle.

So you can take some of those savings to invest, and some of those savings to make your dreams a reality today or in the near future.

What will be your strategy to fill this bucket? Will you wait for a bonus or a stock market score, or will you set aside a percentage like my friend Angela? At first she thought she had no money she could possibly save even toward her financial freedom.

But by the time she went through the process of this book, she saw that relocating to Florida would save her enough money in state income tax that she could now set aside 10% of her income for her Freedom Fund and still
earmark an additional 8% for her Dream Bucket.
The tax man was now filling her Dream Bucket.
How cool is that? Plus, she’s got better weather, too! She went through her accounts and figured out a way to become even more tax efficient to be able to put an additional 2% into her Freedom Fund for a total of 12%, on top of the 8% she was saving toward her dreams.

If you would have told her in the beginning that she would have found a way to save 20%, she would have said you were absolutely crazy. But today she not only has her future secured but also is saving for some important dreams in the short term that excite her. Hiking in the Himalayas and rowing across the ocean. Her degree is in anthropology, and she’s always dreamed of spending time with famed paleontologist Louise Leakey at her institute in Kenya. She was even invited. She just doesn’t have the money right now. But if she sticks to her fiscally sound plan, she will. How cool to be able to be financially secure and independent, and, at the same time, live this life of adventure? Remember the strategy of Save More Tomorrow? You can decide that in your next salary increase, maybe 3% could go to your Freedom Fund, and maybe 1.5% or 2% could go to your Dream Fund—especially if there are some dreams that are important to you now, like saving for the down payment on your first home or a vacation getaway. There are so many ways to do it!

But let me tell you the secret: the most important thing is to make a list of your dreams. Put them in order of importance, big and small, short term and long term. Write down why you must achieve them or experience them. I’ve found that if you try to figure out a percentage to save without really knowing what you’re saving for, it’s not going to happen. The secret is to know what you truly want and why you want it, and make it a burning passion. Suddenly your creativity will be unleashed, and you’ll find new ways to earn more, to save more, to add more value, to become more tax efficient, to become a better investor, or to make a lifestyle change that improves your life and gives you some of your dreams today, and not in the future. That’s the key to it all.

But decide today! Take a moment now and make a list of your dreams. Write them down so they become real to you. How much would you be willing to save for them? Get excited, and get started!

Every great dream begins with a dreamer.

—HARRIET TUBMAN

In the end, what percentage of your total assets do you think should go in your Dream Bucket? It doesn’t have to be much—maybe as little as 5% or 10%. But please don’t forget to reward yourself. While it’s important to keep your money safe and growing, never forget to have fun, to give, and to live your life fully on your path to financial freedom. That’s what it’s all about. Don’t save your Dream Bucket for “a rainy day.” Why not get out and soak up the sunshine?

If you don’t, you could end up like a couple that a friend of mine told me about. They scrimped and saved their whole lives, and then finally decided they had enough to afford a fantastic Caribbean cruise. It was a weeklong trip on one of those giant cruise liners, hopping around the islands. You can picture it: the ship had swimming pools, a climbing rock, dozens of restaurants and discos. The couple was so excited, but they still wanted to be prudent with their capital, since they’d worked so hard to save for their retirement. They didn’t want to spend extra money on the lavish meals. The trip by itself was a big enough splurge for them. So to save money, they loaded their suitcases with boxes of cheese and crackers to snack on during the cruise and vowed to avoid those expensive dinners.

The weather was perfect, and the couple had a great time with all the activities on board. But every lunch and dinner, when everybody else was eating incredible feasts served up on huge buffet tables—shrimp, lobster, prime rib, mountains of desserts, and fine wines from around the world—the two of them went back to their room and ate the cheese and crackers. They didn’t mind. They were enjoying the trip of a lifetime, and they were proud of themselves for being frugal. But on the last day, they finally broke down and decided to splurge and have a magnificent final dinner upstairs! So they tucked into one of those amazing buffets and piled their plates with the best food they’d had in their lives.

After having multiple desserts and drinking wine, they asked the waiter for the bill. And with an astonished look on his face, he said, “What bill?” They said, “The bill for this magnificent dinner. The wine, desserts, everything.”

The waiter turned to them with shock and said, “Didn’t you know the meals come with the trip?”

The meals came with the trip. How’s that for a metaphor? So don’t settle for cheese and crackers on this journey; enjoy everything that comes with it.

And one more reminder: so much of what makes us wealthy is free. Remember what Sir John Templeton told us earlier: the secret to wealth is gratitude. It’s not just what we achieve or accomplish. It’s what we appreciate. It’s not just the adventure of a cruise. It’s what we take the time to enjoy. You can find an adventure and joy in those you love, in the dancing eyes of your children, or the joyous faces of those you love. There are jackpots everywhere if you wake up to the beauty of your life today. So don’t vow to someday get beyond scarcity; start beyond it. Realize how lucky you are and all the wealth you possess in love, joy, opportunities, health, friends, and family. Don’t get rich. Start rich.