To understand money is to appreciate the four primary sources of income or revenue and the implications each of these has on achieving financial independence.

1. Employee: We are all familiar with the option where you provide your personal services, talents, or gifts in exchange for money. But unless you are part of the less than 1% (actors and athletes) who earn significant amounts of income, your options to achieve financial independence are limited.

2. Self-Employed: A couple hundred years ago, most of the population was comprised of self-employed people or entrepreneurs. We are now heading back in that direction. Many people, however, confuse their self-employed lifestyle or work choice with a "business" when, in fact, it is not.

When you are self-employed, you really have created your own job, not a business. If the success of your entrepreneurial venture requires your presence, you are self-employed. Even though there are many lifestyle advantages to being your own boss, the long-term financial outcome is not much more advantageous than being an employee.

3. Business: A business is some type of enterprise that provides the market with a product or service that can operate -- now, or in the future -- with or without your presence. A true business is an entity unto itself that does not require you to be there to run it. The acid test to determine whether you have a true business is to ask yourself this question: can you leave your business for a year and, when you come back, find it is worth more than when you left? If not, you do not have a "business."

4. Investments: Wealthy individuals don't work for money; they have money work for them. There are many investment opportunities -- everyone should have an investment strategy and plan. In the research, wealthy individuals were found spending double the time (100 hours + per year) in planning and determining their investment choices. The poor would argue that they don't need to spend time to plan their investments because they have no money to invest. Perhaps they have no wealth to manage because they have invested no time in financial planning? Even a modest amount of sound financial planning can reap rewards down the road.

I suggest the public has been misled regarding investment returns. Financial institutions would have you believe that high returns mean high risk and low returns mean low risk; that is not necessarily true. I believe those institutions like to perpetrate that idea so they can pay you a mere 1% to 2% return on your investment while they use your money to earn multiples of those percentages.

Just to show you the difference a higher rate of return makes over time, look at the following numbers. If you were to invest a dollar a day, how long would it take you to accumulate a million dollars?

Interest RatesNumber of years to accumulate $1,000,000

3%147 years

5%56 years

15%40 years

20%32 years

The incredible difference in the timeline and results is one of life's miracles called compounding. Which return rate do you think the most financially successful people earn?

I want to clarify that most wealthy individuals have either been successful in business or investing or both. What that means is this: even if you love your job -- as an employee or entrepreneur -- you can establish financial independence if you understand how to invest correctly.

One of the key concepts to success in financial independence and life is the strategy of leverage.

? When we borrow money for a mortgage, we are leveraging other people's money.

? When you have employees or contractors working for you, you are leveraging other people's time.

? When people receive royalties for work done once, they are leveraging their own time and effort.

? And so on.

All my mentors embrace that strategy in their lives. I admit that one of my passions is to ask how a strategy of leverage can be applied to the process or issue at hand.

Much more can be said about the concept of financial independence. I encourage you to get clear about your financial goals, objectives, and dreams. All the research proves that wealth accumulation is not an accident; it is knowledge and skill in action. Now, I will identify action steps for you to consider as you grow and expand in the financial planning arena.

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This Week's Action Steps

Developing Your Financial Success & Strategies

1. Be clear about your reasons for wealth and the emotional freedom it will provide. Without this clarity, you will not be motivated to change your behavior and be disciplined to do the wealth development steps that over 90% of the population are not willing to do.

2. Choose your friends carefully. Did you know that research reveals that your net worth is the average of the wealth of your five closest associates? I am not suggesting that you choose your friends by their financial statements, but make sure your friends are not holding you back from your purpose and dreams.

3. Focus on accumulating assets, not liabilities. Assets provide revenue and have a positive net effect on cash flow. Assets help you buy luxury items.

4. Hire great advisors. Your great advisors should include lawyers, accountants, asset protection specialists, brokers, and others. Engage professionals that are independent and who have a proven track record.

One wealthy individual I know hires professional money managers -- only after the candidates have forwarded him their personal financial statements and proof of their track record. This becomes a very powerful selection process. Most candidates refused to do it, but it was a great way to weed out the people who were doing successful financial planning from the ones who were just talking about it. Don't be intimidated by those who say no; simply move on.

5. Become a master and student about what interests you. Set up a plan and focus on what works for you. Your business and investment plan must reflect your interests. Growing up on a dairy farm, I came to appreciate real estate and property; that is where my investment interests lie outside of my business.

6. Be mentored by someone who is successful. Find someone who has achieved what you want and ask him or her to mentor you. You might be amazed at how many will say yes. One thing to keep in mind is that the mentor relationship is a two-way street. Be there to serve your mentor; be a giver more than a taker.

7. Model the behaviors you want duplicated -- especially with your family, friends, or children. They must be educated to take responsibility for their actions.

8. Don't give money to your adult children -- especially if they are not financially independent and disciplined. The research is clear: the more "free" dollars adult children receive, the fewer dollars they accumulate; the less they are given, the more they accumulate. It sounds harsh, but giving money to adult children hinders their ability to achieve financial discipline and independence. Some well-meaning parents are ruining their children's future financial lives.

9. Teach others. By giving your knowledge away and teaching others, you are improving your entire community. What would it mean if everyone you knew were financially independent by successfully implementing the strategies mentioned in the past three e-zines? It would be amazing.

10. Stay on the journey. Always be learning and open to the next level.

I am amazed by what I did not know about money matters. An example is an organization I have recently come to know, whose purpose is to raise funds for nonprofit groups -- to help them achieve their purpose and vision. Their goal is to raise $500 billion -- yes, half-a-trillion dollars for nonprofit groups. They have no interest in being in the public eye or being the center of attention; they simply want to make a difference. Can you imagine the difference they will make with that amount of resources?

Don't feel intimidated by the number -- you might want to raise more!

Every person reading this e-zine can achieve his or her desired level of financial independence. Simply follow the path set before you by others and seek qualified assistance to help you on your way.

Until next time keep "Living on Purpose,"

Ken Keis