C = Create your Financial Base

First, you need to build a strong foundation before you can try to start climbing the mountain. Otherwise, you will not have a solid mountain to climb. Your mountain could keep crumbling making you fall, and you will have to start all over again. Work to complete these steps as fast as you can so you can start your journey up the mountain as soon as possible.

1. Save $2,000 in an emergency or financial cushion fund, ASAP.

   If you do not have $2,000 in cash or in an easily accessible account (such as a savings account) then you are in danger financially if an emergency happens.

2. Pay off your high-interest debts (credit card debt, payday loans, car loans, etc.)

   This debt is destroying you by skinning you alive. Your high-interest debts only make other companies wealthy, not you. Compare the interest rates of your investments versus your high-interest debts. If you are only returning say 6-10% on your investments, but you are paying 12-18% in interest on your debts, then you are losing. Your money would be better spent or you would get a higher return by paying off your high-interest debts first before you try to invest. If you are a disciplined spender then you can get benefits from using credit cards like fraud protection, rewards, and cash back, however, this is only worth it if you can control your spending and pay your credit cards off every month.

   This should also include loans on things that do not pay you or make you money.

3. Save $500 to start investing.

   There should be a balance to what your risk tolerance is at this point in your life. If you don’t have financial expenses, responsibilities, or people relying on your income, then this would probably be a good time to focus on investing more. If it’s the opposite, then you might need to prioritize saving money before investing.

The bigger and more solid foundation you build, the higher and sturdier your mountain can be.

L = Lead your money

The concept of leading your money is to reverse the debt cycle. Most people have a consumer-based mindset. They make money, then spend their money, and then they wonder where all their money went. They also usually pay the highest in taxes because they have not invested money that will give tax advantages. This is why so many people live paycheck to paycheck. This mindset needs to be flipped to an investor mindset. Use your money to attract more money. The wealthy make money and pay themselves by investing their dollars first, and then they can spend what is left. Wealthy people did not get rich by saving or spending their money. They got rich by investing their money.

1. Tell your money where to go

Financial budget rules Jaspreet suggests:

75/15/10 plan is for individuals who have people relying on them financially or who have a lot of financial responsibilities.

75% for spending, 15% for investing, 10% for saving

50/30/20 plan is for individuals who do not have people relying on them financially or who do not have a lot of financial responsibilities.

50% for spending, 30 for investing, 20% for saving

These budgets are not set in stone. Use what is right for you, or use another variation if needed, just be sure you have money saved and are investing. Remember, the more you invest, the faster you will make it up your mountain.

Create a system that ensures you are taking this set amount or percentage out to save/invest every time you get paid so this money does not get spent on non-assets leading you to wonder where it all went.

Sometimes this can be easier said than done, but Jaspareet suggests thinking of it as a tax. If the government came to you saying you now had to pay more in taxes every time you got paid, then you would have to just figure out how to pay this money or there would be serious consequences. You would do everything you could to ensure you were paying that extra amount, so you should do that here also. Do all you can to ensure you are saving and investing your set amount every time you get paid so you can make it up the mountain.

2. Ensure a fully-funded emergency fund

Saving is for losers, however, if you do not have a solid emergency fund, then you could be thrown backward if a financial emergency happens. Save your money strategically by aiming to have a fully-funded emergency fund (3, 6, or even 12 months’ worth of expenses-depending on your risk tolerance), and then focus on investing. Jaspreet says you should not need to save more than 6-12 months as you want to focus on investing now because that is where you will build your wealth.

The whole idea behind investing is buying assets that will grow and make you money, so after you reach your fully-funded emergency fund goal, then you can take that percentage/amount and apply that to increasing your investing amount helping you to build wealth quicker. So, if following the 75/15/10 budget rule, and your fully-funded emergency fund is complete, then you should start investing 25% of your income instead of just the 10%. You would now be on a 75/25 budget.

However, if you still have other lower interest debts, you could use that savings amount to apply to these lower interest debts. (75% spend, 15% invest, 10% pay extra toward low-interest debts) The choice is up to you on how you use this extra money.

I = Intrest Free Living

Spending your money smartly!

Just because you can buy something, doesn’t mean you can afford it. Follow the Rule of 5.

Rule of 5

This applies to non-necessity liabilities and states that if you can’t afford to buy something 5 times, then you can’t afford to buy it one time.  This will help you get out of the Net-Zero lifestyle (meaning you spend all you bring in) and help you to be able to build your wealth.

Example: If you have $100 in your bank account, then most people say they have $100 to spend, but in reality, if you only have $100 in your bank account, then you cannot afford to spend $100 as then you will be broke.  To help you be able to build your wealth, you should think of it as you only have $20 to spend, as $20 x5 equals $100.  So, if you have $100 and you want to buy shoes, then you can only spend $20 on a pair of shoes.

Do not finance the things that are not paying you.

M = Multiply Your Income

Learn how to increase your income

1. Know yourself - Know what you are capable of and know what you are willing to do. Pick up another job, start a side hustle or a business. Some people will be great at starting a business, but others do not have the drive, energy, or capabilities that starting a new business will require, so find what will be best for you.

2. Do not let lifestyle creep happen with this new income meaning do not increase your living style or expenses, but instead, pour this extra money into investments to reach your financial goals faster.

B = Be great!

Your family depends on you to be smart with your money. When you keep more, you can do more. Learn how to protect your family and your assets by creating a will, getting insurance or legal entities, and hiring an attorney to protect what you have worked so hard for, for you and for your family.

Be great for your community and find ways to bless others around you.

And remember, making it to the top of the mountain can be great, but helping others climb the mountain as well can even be greater.

One of my favorite quotes is, “Reach one, teach one. If we all did this the world would be a much better place.” Alaska Prepper