In the final chapter from Jim Rohn’s “How To Have Your Best Year Ever!” seminar, he begins it by discussing how to achieve financial independence. According to Jim there are two keys to reaching financial independence.

Firstly, you need to develop the discipline of keeping strict accounts. It’s important to know how much money you have coming in, and how much money you have going out.

Secondly, you need to change your attitude regarding the things you need to pay for. See it as a privilege, instead of a burden.

How To Achieve Financial Independence

03:31: 22: What should a child do with $1?

Let me give you the best advice I’ve got, and this is called—sort of middle of the road scenario—and I’ll show you how these numbers may change, but here’s what I teach: Kids never spend more than 70 cents.

Now you’ve got to pick some number.

When I met Mr. Shoaff, I was at about 110%.

But remember this: If your outgo exceeds your income, your upkeep becomes your downfall.

Good little scenario.

So here’s the number that I found works best and in developing a good financial plan.

Never spend more than 70 cents out of every dollar from now on.

Now, kids ask me what? What do you do with the other 30 cents?

Here’s my best advice: 10 cents charity 10% charity, supporting worthy projects helping people who cannot help themselves.

Some churches teach tithe, peace, portion, turning back part of what you take out.

Excellent, excellent philosophy.

That’s what that 10% is.

And nothing teaches children responsibility and character better than generosity.

No school, no class, no teacher can teach character better than the simple act of generosity—10 cents out of every dollar.

Now you can pick your own number. I’m just giving you my best scenario.

Now the time to start this is when the amounts are small, easy to give a dime out of $1, I’m telling you kids will give you 10 cents out of every dollar if it’s part of their philosophy, if you sell them on it. And that’s the time to start when it’s easy, 10 cents out of $1.

A little harder to give 100,000 out of a million, someone says, “Oh, if I had a million dollars, I’d give $100,000.”

I’m not that sure!

We better start you early when the amounts are small, so it’ll all be set in when the big amounts start to come.

Okay, so 10 cents for charity.

The next 10 cents I call active capital.

Capital meaning, meaning try to make a profit yourself.

We live in a capitalistic society. Right?

Everybody now wants to join capitalism. That’s why the walls are coming down. Capital belongs in the hands of the people. That’s where the genius is.

So the genius is to try to show a profit, buy and sell, render service, show a profit.

Now here’s what I teach kids profits are better than wages. Wages are okay. But wages help you make a living, profits help you make a fortune.

The key is to just understand philosophically a little simple economic scenario.

And there’s all kinds of ways to make a profit.

I’m working on a new book. Here’s what it’s called—I think it’s going to be called—Of Course Kids Should Pay Taxes. It’s gonna be an interesting book.

In California, where I live, kids do pay taxes. If an eight year old walks into 711 to buy something that costs $1, the proprietor makes him cough up seven more pennies.

Eight year old says, “What’s the seven pennies?”

Proprietor says, “That’s taxes, that’s taxes.”

Kid says, “Well, I’m only eight!”

Proprietor says, “Congratulations. You’re my youngest taxpayer.”

So in California kids do pay taxes.

Now the question is: Should they?

Now, the title of my book is: Of Course Kids Should Pay Taxes. You got it.

The disciple went and caught a fish, found the miracle coins, and paid his taxes and Jesus’ taxes.

So way back then Jesus did pay taxes. Now the question is: Should he?

In the answer my little book says, of course Jesus and kids should pay taxes! Of course, of course.

If an eight year old wants to ride his bicycle on the sidewalk instead of in the mud, you have to pay taxes, things cost money, you’ve got to pay taxes.

Aircraft carriers to keep tyranny over there, instead of over here. Aircraft carriers cost money. It’s expensive to run this whole show. Can’t use used missiles. You know it’s expensive to run the whole deal.

Of course everybody has to pay.

Now, active capital means try your best to show a profit.

Now there’s many ways to show a profit, not just money. Touch something leave it better than you found it, that’s a profit. Some profits are intangible, some profits are tangible.

Long before Earth Day—for all sophisticated people—it was very proper when you left your hotel room to turn out the lights. All educated people, why? Leave a profit. It’s so easy to flip the switch and leave a profit. So as well a hotel gets the profit. What do you care?

All you need to become is a person who leaves a profit. Wow.

I talked to a man who runs a whole string of apartments. He said, “Guess what? Most people when they rent an apartment, leave it, what? Trashed, worse than they found it.”

What kind of a reputation would that be?

Whatever you touch turns to trash. Whatever you touch gets dirty. Nothing you touch gets better.

See, that’s a poor philosophy. No wonder it leads to poverty. Small lives. As one writer said, “Living lives of quiet desperation.” This is where it all begins.

Failure to leave a profit when you can turn out the lights, doesn’t matter what it is. Become profit minded, profits are better than wages. Because profit has the potential to make a fortune. Wages have the potential to make a living.

So I teach kids take part of your wages if you earned the money, take part of it for charity, and part of it to see if you can make a profit. There’s all kinds of ways—my books going to be full of all kinds of ways kids can make money.

I teach kids how to have two bicycles, one to ride, one to rent. Now it doesn’t take long to get into business. You don’t have to be a genius. Halfway bright, you can start showing a profit. Now here’s the next 10 cents called passive capital.

Meaning let somebody else use the capital you provided, your passive, they’re active, and let them pay you interest. Profits and interest, unique way to make a fortune. In fact, there’s a Bible philosophy I teach teenagers is Bible philosophy. Here’s what it teaches.

“The borrower is servant to the lender.”

Wow. So where is the power position?

Not the spender, a lender.

And if I’ve taught teenagers well, if you ask them among some of the things you want to be, you know when you grow up, you know as years pile on? What would you like to be?

I’m telling you, among some of the things that they would like to be, if they’ve sat in on my classes or gotten some of my material they would say, “I want to be one of them lenders.” Powerful position, let somebody else use your capital.

Some projects require more capital than any one person has. So we’ve got capital pools, whether you put it in a financial institution or whatever, right?

Earn an interest, earn a profit, right?

Buy a car and sell it for more than you paid for it. Why? Because you leave it better than you found it. Wow.

Touch something and leave a profit. Okay, it’s not just wrapped up in money in economics. This helps to teach all other scenarios of life, on profits and capital expenditures, what to do with your time, and what to do with your life, as well as, what to do with your money.

Okay, now this little scenario I call the “ideal.”

Now here’s what’s important, to set up the ideal and work toward it. Because at first you may not be able to do these numbers.

Some people are in such a desperate situation currently they got to go 97%, 1%, 1%, and 1%. I mean, you know I had to start there.

Start with pennies. And remember, it’s not the amount that counts.

Mr. Shoaff gave me the clear situation, here it is: It’s not the amount that counts. It’s the plan that counts.

When I met Mr. Shoaff, I’m 25 years old, I said to him, “If I had more money, I’d have a better plan.”

He said, “No, Mr. Rohn, if you had a better plan, you’d have more money. Six years, six years in America, six years? Come on. It’s not the money. It’s not the amount. It’s the plan that counts.”

So set up an ideal plan like this. Now you can rearrange this and modify it to suit yourself.

I’m just giving you here as an example.

So set up the ideal, and then start making progress toward it.

Because finally these numbers are going to change if you move on up into the higher area, right?

The people I work with around the world couldn’t spend 70 cents out of every dollar, it would be obscene.

That’d be too much.

So these numbers are bound to change.

I don’t know what mine are, probably 20% up here, a lot larger numbers down here. Okay.

So these numbers can change. I’m just offering you a good sample philosophy.

Remember, philosophy is the set of the sail.

The economy is not the set of the sail for you. For you, the set of the sail is your own philosophy, your own thinking, your own plan, your own concept.

Don’t borrow somebody else’s plan. Don’t borrow somebody else’s concept. Don’t borrow the concept—you know spend all you can, cross your fingers, and hope for the best—don’t borrow that.

Develop your own philosophy and I’m telling you, it’ll lead you to unique places.

Now, the rest of a lot of this is on the cassette tapes, but let me just give you two, or three more, pieces of the scenario here.

Then I want to talk about communications, and then we’re going to wrap it up. Okay.

Keep Strict Financial Accounts

03:42:01: Here’s two or three more parts of financial independence.

Number one: Keep strict accounts.

This is the best of disciplines, keep strict accounts.

Did you ever hear this expression? “I don’t know where it all goes.”

Do you ever hear that? “I don’t know where it all goes.”

Oh, we’d love to have you run our company. You don’t know where it all go. Whoa.

Did you ever hear this? “It just gets away from me. It just seems it just gets away from me.”

Uh, we’d love to turn the world over to you. It just gets away from you? Come on.

You’ve got to have better disciplines than that.

Let let that be the 90%. Let that be the scenario of the 97%, but don’t let it be your scenario.

Don’t let it become your philosophy. Keep strict accounts.

Develop A New Attitude

03:42:59: Next, a new attitude. I had to develop a new attitude, as well as, new concepts.

Here’s what I used to say, “I hate to pay my taxes.”

Shoaff said, “Well, that’s one way to live.”

I thought well, doesn’t everybody hate to pay their taxes?

He said, “No. No. A few of us have gotten way past that.”

He says, “Once you understand what taxes are.”

Here’s what taxes are in our governmental system, in our society, taxes is how you care and feed the goose that lays the golden eggs.

Democracy, and liberty, and freedom. Free enterprise. Wouldn’t you want to feed the goose that lays the golden eggs?

Someone says, “Well, the goose eats too much.”

That’s probably true. I understand that. Of course that’s true.

But see, better a fat goose, than no goose!

And here’s the truth be known: We all eat too much. Let not one appetite accuse another.

Of course the government needs to go on the diet, so do most of us.

But hey, you still have to care and feed the goose that lays the golden eggs, once you understand that that’s what it’s for—see it is so important, the right attitude.

Here’s what I used to say, “I hate to pay my bills. You open up the mails, nothing but these window envelopes. Bills. I hate to pay my bills!”

Shoaff said, “Well, that’s one way to live.”

I said, “Well, doesn’t everybody hate to pay their bills?”

He said, “No. Some of us are way beyond that.”

I said, “Is it possible to love to pay your bills?”

He said, “Yes. Reduce your liabilities, increase your assets.”

Wouldn’t you love to do that.

So start a whole new attitude here.

Next time you pay $100 on an account, put a little note in there and say, “With great delight, I send you this $100.”

I mean they don’t get many letters like that. Reduce my liabilities, increase my assets. My pictures changing, my pictures improving.

I love to pay my bills, keep the money in circulation. Pay my taxes, feed the goose that lays the golden eggs.

It’s a matter of attitude.

And here’s the last on attitude: Everybody must pay.

Of course life is called opportunity, but life is called price that we must all pay, we must all share.

One of the classic stories of all time, from ancient Bible script says, “Jesus one day and his disciples were standing by the church treasury—synagogue treasury—watching people as they came by and put their offering in the treasury.”

That wouldn’t be a bad idea, Jesus and his disciples standing by the treasury while everybody walks by.

Jesus said, “How much was that? How much was that? Hmm, interesting.”

And the story said, “Some people came by, put in big amounts. Some people came by, put in modest amounts, average amounts.”

And the story says, “Then a little lady comes by and puts in two pennies in the treasury.”

Jesus says to his disciples, “Look at that. Look at that.”

His disciples said, “Two pennies, two pennies? What’s two pennies?”

Jesus said, “No, you don’t understand. She gave more than everybody else.”

They said, “Two pennies is more than everybody else?”

He said, “Yes, because I’m certain that her two pennies represented most of what she had. And if you give most of what you have, then you’ve given the most.”

Wow, what a lesson to learn. It’s not the amount. It’s what it represents of your life that counts.

Now let me give you the wisdom of the scenario that did not occur—and this is the greatest of wisdom, and in my own particular, peculiar brilliance I have the ability to record for you what was not recorded in the scenario of the story.

Here’s what did not occur, which may teach us one of the greatest of the wise things that was taught in this scenario. Here’s this, here’s what did not occur in this scenario.

Jesus did not reach into the treasury, and get this little lady’s two pennies, and run after her, and say, “Here little lady, my disciples and I have decided that you’re so pitiful and you’re so poor, that we’ve decided to give you back your two pennies.”

I’m telling you, that did not occur. If it would have occurred she would have been what? Insulted. She would have rightfully said, “I know my two pennies aren’t much, but it represented most of what I had, and would you insult me, by not letting me contribute what I wanted to contribute. Even if it’s only two pennies.”

I’m telling you, that did not occur.

Here’s part of the wisdom of the story that was not recorded.

Jesus left her pennies in the treasury, meaning everybody has to pay, even if it’s only pennies.

That’s the key.

And whether you start with pennies, or whether you start with dollars, or whether you start with nothing, remember, part of the scenario is to spend. Of course.

Part of the scenario is to invest, and part of the scenario is to show a profit, and part of the scenario is to help take care of people that can’t take care of themselves.

If you’ll set up your own philosophy—I’m not asking you to buy my philosophy, I’m not asking you to adopt my numbers.

I’m only wanting to provoke you to think, for you to come up with a splendid economic philosophy that’s got you up early, and got you up late.

It’s got you thinking and pondering ways to use your resources and turn it into the dreams you want for the future.

And that’s my little story on financial independence.

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