The Key To Financial Freedom

August 17, 2022

People want freedom. It seems to be a natural part of our makeup. When I first meet clients and begin talking with them about their goals, they are sometimes fuzzy on the details, but they are almost always clear on the objective—they want financial freedom. Take a moment to test this out in your life. What are your major goals? As you think about it, I bet you will see that most of them reflect a desire for independence—a desire to be free.

Unfortunately, as with most things in life, our desire for financial freedom often meets with opposition. Some opposition comes from within us. For example, I know a guy who said he said he was finally going to get serious about saving for his retirement—just as soon as he got back from his second vacation to Hawaii this year. Some opposition comes from without, including attempts by others to lure us into debt or dependency.

Eleanor Roosevelt said, “The war for freedom will never really be won because the price of freedom is constant vigilance over ourselves and over our government.” She was talking about political freedom, but her notion of constant vigilance also applies to financial freedom. There are enemies to our financial freedom that demand our constant vigilance.

One of the most disruptive enemies I encounter on a regular basis is impatience. Wealth creation is a natural process. It follows the law of the harvest. We enjoy the fruits of the harvest, including financial freedom, only after we have had done the work of planting the crop and then nurturing it to maturity. Think how foolish it would be if a lettuce farmer in the Salinas Valley impatiently decided to make salad out of his seedlings instead of planting them and nurturing them to harvest time.

Financial impatience manifests itself in a number of ways. I recently had a conversation with an older gentleman who was shopping for a new advisor. He was dissatisfied with the kind of return that his former advisor told him to expect, around 6 percent. When I asked him what he thought would be more reasonable, he said 20 percent. He said he has a limited amount of time and he needs to make up some lost ground. Now, I’m not saying it would be impossible for my friend to make 20 percent on his portfolio, but I do believe the odds are against him. And with the kind of risk that kind of return would require, it is far more likely that his impatience to “make up lost ground” will cost him the financial freedom he seeks.

Impatience also affects young people. Sometimes young people want to enjoy the same lifestyle as their parents. They don’t understand that it took their parents years to get where they are today. I have seen wonderful young people, brimming with talent and energy, betray themselves into financial serfdom because they don’t understand the wealth creation process. They try to leapfrog past the seasons of planting and nurturing so they can start enjoying the good life right now. Instead, they end up buried under an avalanche of debt. A better approach would be for them to live today in a way that supports the kind of tomorrow they desire. Maintaining such a lifestyle isn’t difficult and it doesn’t require massive sacrifice, but it does require focus and discipline.

When I was fresh out of business school, I got to know a man named Lee Ross. Lee was very successful, both in financial terms and in his personal life. One day Lee gave me the best financial advice I have ever received. He told me to always make sure I pay myself first. He said, “Before you do anything else, take 10 percent of whatever you earn and put it into long-term savings. Live on whatever is left. If that isn’t enough, find a way to make more money, but always pay yourself first.”

Though he used different words, Lee was telling me to be patient, to honor the law of the harvest, to stay focused, and to stay disciplined. I did not realize it at the time, but he gave me a priceless gift. He gave me the key to my financial freedom.

Steven C. Merrell MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey. He welcomes questions that you may have about investments, taxes, retirement, or estate planning. Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA 93940 or email them to