There is a secret seldom spoken of by the financially independent. Those in the know can hear echoes of the secret periodically in the utterances from great financial leaders like Charlie Munger when he said the surest way to get in financial trouble is with the three Ls: liquor, ladies and leverage. Then Munger’s buddy, Warren Buffet, laughs about the comment in an interview saying Charlie was joking about the first two; it’s leverage where all the trouble lies.
Did you miss the secret? Unless you are loaded (financially, not with liquor) there is a good chance the greatest secret of wealth whistled past your left ear unnoticed.
Here is the secret for those who missed it:
When you are in debt the clock works against you. Every morning when you wake—weekends, holidays, sick days, birthdays and work days—you are already behind. The mortgage, credit card, car loan, et cetera, all tacked on interest the second after midnight. Long before you rolled out of bed and poured your first cup of coffee you need to work to pay the interest before you have money for food, clothing, shelter or entertainment.
Here is the secret if you weren’t paying attention:
Saddled with debt the clock works against you. Tally up all your debts and calculate the interest accruing daily. Now you know why it’s so hard to get ahead. It isn’t your wage; it’s you! You forgot to do the math and now the universe is teaching you a valuable lesson. If you survive. More on that in a moment.
Here is the secret if you were distracted by the bright lights:
If you have no debt you start each day with a clean slate. You own nothing to anyone as you start your day. You still need to take action to cover your daily needs, but at least you are not behind before you start.
The secret again is:
Without debt, but with investments, interest accrues to your account before the coffee is brewed. Dividends were earned, wealth created.
The secret again:
Investments in interest baring accounts build slowly, yet daily. Investments in index funds means virtually every purchase by every man, woman and child added something to your nest egg. Each sale added to the coffers that pay you dividends. Each sale adds value to the companies you own in the index fund. Each sale is part of the wealth creation process.
In case you missed it, the secret is:
Without debt and a load of investments you have millions of people on your payroll managed by some of the brightest and most educated people in the world. They work hard for a salary. They work hard making you rich!
***In debt you are a slave; without debt you’ve broken the chains and ripped open the shackles and threw them into the abyss.
Without debt you are free; without debt and in possession of wealth, each day is yours to use as you chose.***
Pay attention! I will repeat the secret one last time:
Debt turns you into a slave! Every day you owe your master. Every day! He is a cruel, heartless master. When the clock ticks past midnight the interest for the day ahead is due.
Only those without debt and in possession of investments are free! Those with wealth are free to live each day as they choose. They can build or create more value or take time to reflect on a life well lived. You can share it with family and friends. Without a harsh master demanding your soul you can walk any path you choose. Any path.
I could go on for another 2,000 words, but it would be to no avail. This doesn’t need a long story. The message is short and simple. Even a child can understand it. It requires the poison of mass media to brainwash you into wanting more than you need on a short term of slavery, ah, easy payment plan.
Copy this post and paste it on the refrigerator door so you see it first thing in the morning.
Paste a copy on the bathroom mirror so you can read it as you brush your teeth.
Carry a copy in your pocket close to your heart.
Never forget the message. Read it again and again until it is internalized. Only then is the ultimate secret of wealth personally yours.
Now you know the secret:
1.) Get out of debt.
2.) Invest constantly in broad-based index funds.
3.) Live the life of your choice.
Now that you know the secret you are free. Perhaps for the first time in your life.
Wealth Building Resources
Personal Finance is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Finance is free?
Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to skyrocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.
QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. Quickbooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.
A cost segregation study can save $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.
Amazon good way to control costs and comparison shop. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you.