NFA Finance

If I could go back in time and give my younger self advice, there’s a long list of things I’d want to say. A really long list.

But one of the biggest would be this:

Never spend your earned income. Figure out how to live on what your money earns instead.

Interest. Dividends. Income from assets you own. Build something with the money you work for, and let what it produces help pay for your life.

I wish I had made that my rule from the beginning.

I’ve never been afraid of work. I know how to get up, go to work, make a deal, and figure things out. Making money has always been something I was willing to put effort into.

But earning money and building lasting financial freedom require different decisions. You can work hard, make good money, and still find yourself needing the next deal because you’ve already spent what the last one paid you.

That’s the part I’d want my younger self to understand.

Every dollar you earn gives you a choice. You can spend it today, or you can keep it and give it a chance to produce something for you tomorrow. Once you spend it, that choice is gone.

And when you’ve worked for that dollar, you’ve given up a piece of your time to get it. Hours of your life. Energy. Attention. Sometimes a whole lot of stress.

I wish I’d thought more about what I wanted those hours to build.

The rule would have been simple: my earned money goes toward building income. My lifestyle has to fit what that income can support.

Now, I understand you have to eat. You need somewhere to live. You have responsibilities. Starting from zero, you may have to spend most of what you earn just to cover the basics.

But I would have told myself to start working toward that rule immediately. Keep my expenses low enough to leave something to build with. When I made more money, leave room for more of it to stay. Give myself some time before deciding that a good month meant I could afford a more expensive life.

Because that’s an easy habit to fall into. You make more, so you spend more. Then that higher level of spending becomes normal, and now you need to keep earning more just to maintain it.

I’d want to interrupt that pattern early.

I like nice things. I like cars. I like having the freedom to go places and enjoy myself. That’s exactly why I wish I had built the income to support those things sooner.

Imagine spending money on something you want while knowing the money you originally worked for is still there, still invested, still capable of producing more.

That’s the position I would have wanted to build toward.

Of course, owning an asset doesn’t mean the income is guaranteed. Things need attention. Costs come up. Returns change. I’d still have to think, learn, and make good decisions.

But I would have had a clear purpose for the money I earned. Before asking what I could buy with it, I’d ask what it could help me build.

I can’t go back and hand that advice to my younger self. I can decide what to do with the money I earn from here forward.

And if somebody younger is reading this, that’s the thought I’d leave you with: figure out how to keep more of what you work for and build income around it. Start while your habits and your expenses are still taking shape.

I knew how to work for money. I wish I’d learned earlier how to keep it and make it work for me.

— Nicholas Francis
NFAFinance.com