May 23, 2019
Meditation can Be Paramount to Attaining Freedom from Money Constraints
A spiritual approach to understanding and manifesting financial freedom
In this article, we will discuss 4 ‘buckets’ of information to expand your understanding of the spiritual nature of money, value and wealth. These buckets include;
- Aligning your inner world with God’s abundance (identifying and rejecting limiting beliefs from your upbringing that prevent access to greater wealth)
- Money as an energy which moves towards ‘perceived value’. Money facilitates the exchange of goods and services.
- Supply and Demand: Revenue flows to producers of goods and services that meet existing demands. When there is a high demand and/or short supply of such goods and services, success is exponentially greater
- Necessary skills in acquiring the correct amount of wealth (especially good/bad debt and understanding the positive aspect of leverage)
The Inner World of Finances
As a soul who meditates with regularity, by now you are well acquainted with the distinction between your outer world (how you present yourself to others) and your inner world (the private space within that contains your thoughts, feelings, beliefs, hopes, dreams, fears etc).
Most people grow up being taught (by the example of their family) that money is problematic. They may receive good advice from parents however their parents may still make emotionally reactive decisions surrounding finances that contradict this good advice. A child is left trying to figure out what is actually the best course of action.
Common belief systems around money include a scarcity mentality which manifests as a feeling of never having enough for what you want or need, to an indulgent mentality that espouses we should have whatever we want and not be overly concerned with how to pay for it (a type of pseudo-abundance that is not based in reality). Many nuances exist between these two extremes.
Credit card companies feed off the latter. They offer large sums of money to the average consumer with the allure being you can buy what you want now and pay for it later. What they don’t highlight is the cost to use their money as opposed to using your own. We will discuss this in greater detail in this article.
Why is it Easy for Some People?
The people who tend to have the easiest time manifesting wealth, regardless if they are at all spiritual are those who grew up in rich families. Certainly there are exceptions based on the individual soul however growing up in a rich family frequently means a person has been conditioned by experiencing wealth from their earliest memories, that the world is abundant. They believe they can easily afford the things they want.
In contrast, if your family had fears, frustrations and tightness around their finances, chances are these attitudes significantly influenced your current beliefs around wealth. It is absolutely critical prior to embarking on any sort of wealth building venture, that you do a thorough inventory of your personal attitudes and beliefs around money.
If you don’t, you may find unexplainable obstacles and failures haunting your progress. This occurs because of how a soul seeks to always live in congruence with their deepest beliefs. If your subconscious beliefs are more aligned with scarcity or other money problems, despite all your conscious efforts to attract greater wealth, you are driven to maintain that poverty or financial difficulty as a matter of loyalty to your family tribe. We have to be prepared to abandon the tribe in order to have a new relationship with money and wealth.
Changing Deep Seated Belief Systems that are Limiting
It is recommended that you seek out a process which resonates with you personally for identifying and changing deep seated beliefs that are limiting. It can be useful to find a professional counselor or spiritual advisor to guide you through the process as it is very helpful to have an objective perspective as you proceed.
The process involves using meditation to explore your deep feelings about wealth, money and abundance. To get started, list the beliefs you discover and try to identify what events in your life led to you thinking in these ways. Identifying the defining experiences or influential people from your past that shaped your beliefs around money will make it easier for you to reject the aspects that are constricting and limiting you in the present.
Once you have recognized the erroneous beliefs, it is time to get counseling and create a new, healthy and most importantly accurate belief system. Be sure to find an advisor who not only understands the principles about wealth (as covered in this article) but also has awareness of the spiritual side of life.
Here is an example of 2 old beliefs, a brief explanation as to where the beliefs originated and a new belief to replace the old.
Negative Belief: I believe there is never enough money. I will always struggle financially to have enough for what I need.
- I remember the tension in our house growing up between my parents. My mom was always tight and worried about having enough to pay the mortgage, buy groceries and be able to have some left over for essentials like shoes for us or car repairs. She always wanted to have ‘emergency funds’. My dad was resentful since he was the one earning the money and felt she never allowed him enough to get the things he wanted for himself.
- When I wanted my first bike, my mom said I had to earn the money for it. I was 8 years old and had no idea how to earn money. She said a person has to get a job. I said I would get a job. She laughed at me and asked me what I would do. I said I could walk people’s dogs for a dollar or two. She said I should go for it. The bike cost $179. After asking 3 neighbors and no one wanting to pay me, I was sure I would never have enough for the bike. I remember feeling totally helpless.
- My first boyfriend had a different attitude about money. He was always spending it saying we should have fun. It made me very worried and I tried to teach him to save money. He would get angry and call me a tight wad. After a while he lost interest in me but I remember thinking I didn’t want to date him anyway since I knew he would go broke sooner than later.
New Belief to replace the old:
There is an abundance of money available to me. I have to work to provide value for my employer/clients and I have to be smart about how I spend it. I have faith that God provides abundantly.
Negative Belief: I believe having a lot of money will corrupt me and turn me into a greedy, self-centered person. I truly believe money is the root of all evil.
- My dad used to sit us down and talk about how the rich people were instructed in the Bible to sell everything and follow Jesus but they never did it. He said they loved their money more than God and Jesus told his Apostles that they would never make it to Heaven. I have always been afraid that having money would mean that God hated me.
- One time my mom received a gift from her parents that seemed like a huge amount of money. I think it was $5000 but it caused a huge argument in our house. My mom said we should take a nice vacation but my dad said it was a temptation by the devil. I never understood how a gift like that could be a temptation since I thought a vacation would be fun. In the end my dad agreed we could pay off part of the house but only if my mom agreed to give half away to charity. She did agree but I could feel she was not happy. I concluded that money leads to problems and it was better to avoid it altogether.
- When it was time for me to go to college, I asked my parents if they were able to contribute to paying my tuition. My father said that going to these expensive schools would only make me want money more. I told him I was going to school for medicine because I had an interest in healing people. He scoffed and said doctors were the worst of the rich, He believed they should be giving their services away basically for nothing and was suspicious that they would lie to ensure their patients went through long and expensive treatments that they didn’t need.
New Belief to replace the old:
Having money allows for opportunities to do more good in life as well as enjoy life oneself. I believe in balancing how much I focus on spending money on myself and how much I use it for practical purposes and helping others.
Having honed and refined the new beliefs into a concise list, memorize the new beliefs and recite them to yourself multiple times each day for about 2 weeks. This will help get them rooted in your subconscious.
The final step and the most labor intensive is diligently studying your actions over the next 12 to 18 months to make sure you act in accord with the new beliefs. It will take this amount of time and consistent behavior for the new beliefs to become permanent. Note that the above description of an inner process is encapsulated. The actual work involved can be extensive and should be approached with a patient, humble attitude and a desire to be thorough.
Some Insights Regarding Credit Cards
Earlier in this article, we talked about credit cards. Here is a way you can think about the whole concept of using ‘plastic’ to spend money; a bank creates a credit card program that allows you to buy things which they pay for initially. At the moment of transaction (when you buy something with a card), the store receives confirmation that the bank will provide the funds required for your purchase. That’s what you wait for at the cashier, the approval from the bank.
If you are diligent and responsible, you pay back what they loaned you when you get the monthly statement. If you do this, everyone’s happy, right? Wrong. You’re happy but the bank is indifferent or maybe slightly unhappy. Why? Because they didn’t make very much money. They only made a transaction fee off the merchant who had to pay 2% to 3% of the purchase price for the privilege of being able to accept credit cards as a form of payment.
In fact, what the credit company would love most is that you pay back the amount you used slowly over time and thus pay them a significant amount of interest. Most credit card companies are charging you between 12% and a ridiculous 25% interest in order to use their money. You have to think of this as a short term loan and stop thinking of credit card funds as ‘your’ money. Each time you use a card, you are effectively taking out a loan.
When Credit Cards Are Good
A positive way to think about credit cards is that they are a convenient way buy your monthly supplies (pay for groceries, meals at restaurants, gas, pay your cell phone bill etc). Here are 3 good aspects of using cards;
- First, it’s easier and faster to just hand a card to the cashier in lieu of carrying cash which is more vulnerable to theft. To this point, lost credit cards whereby someone finds yours and uses it illegally presents almost no risk to you. Banks will take your word for it if you call and say charges on your card were not authorized by you. This is a very positive aspect to credit cards.
- Second is that all the transactions are recorded and quickly viewable online. Monthly statements allow you to keep track of your expenditures. If you are someone who likes to budget, these statements are extremely valuable.
- The third reason that credit cards are good is that most of them offer rewards which means as you spend, a small percentage of what you ‘borrow’ from them, is given back to you either in a cash redemption or in exchange for other goods and services (airline points, gift cards etc). You can’t get this kind of payback if you write checks or pay cash for stuff.
If you take advantage of these opportunities, credit cards are excellent but be sure to pay off the balance each month because as soon as you let the balance remain unpaid, you are paying a high cost for ‘their money’. The interest rate on most credit cards is simply too high meaning the use of their money is too expensive.
There is an exception and that is when a credit card company offers you a period that is interest free. This can often be the case when they are trying to allure you to open a new account. They encourage you to transfer other balances to the new card and then let you pay it off over 12 months with 0% interest.
This is generally a good move if you have allowed large balances to accumulate on cards with high interest rates. Simply be aware that even at the lowest interest rate of 0%, it is likely they will charge you a fee (generally 4% or 5% of the transferred amount) to get started. In effect, it’s not totally free but can be worth it just the same.
If you find yourself understanding this teaching and yet you are unable to pay off your current credit balances immediately, there are some actions to take in the interim. As mentioned, it might make sense to consolidate existing debt from multiple cards onto one card if they offer the 12 months interest-free introduction. You will pay a balance transfer fee however assuming you pay the entire balance within 12 months, it is still a pretty big saving over the interest payment.
In the meantime, shift your attitude about cards and use them as instructed in this article. Once the 12 months pass and you are free of credit card debt, a whole world of freedom opens up to you. Until that time, you may have to suffer a little as you make larger than normal monthly payments and get yourself out from under a rock.
Remember that interest is what the bank is charging you because you used their money. I suggest you give them back their money as soon as possible and stop paying for it.
Money is Energy that Moves towards Perceived Value
One of the most frustrating aspects to this work is trying to figure out how you will end up with more money. In reality, understanding a simple principle can lead to a huge change in consciousness. Money can be thought of as stored energy.
If you put in two weeks of work at your place of employment, you have exerted your energy to benefit the organization where you work. In exchange, the company gives you a paycheck for the energy you gave them. You can think of that as a replenishment to the energy you gave only in a different form (they obviously can’t inject energy into you exactly the way you exerted it!).
You can use that money to buy the things you need. If you buy food, that food will eventually be digested and used as energy. The money you receive for the work you do is energy which can be used to acquire other sources of energy or things/services that save or yield more energy. Gas for your car is the same. Money (stored energy) is given at the pump in exchange for a useful fuel for your car (a different form of energy).
When you begin to understand this perspective on money, it changes the feel of everything. Money is in fact a brilliant invention that saves huge amounts of time and effort when it comes to exchanges between people. Imagine how difficult it would be if money didn’t exist.
Bartering Before Money Existed
At some point in civilization, this was the case. Goods and services were exchanged through bartering. The egg farmer had to bring hundreds of eggs to the central market. The furniture maker hauled his tables, desks, chairs etc and the tailor brought racks of clothes. The clockmaker brought clocks and the doctor brought his medicine bag.
What if the guy selling clocks didn’t want your eggs in exchange for the clock you wanted? Instead he wanted a dresser. But the furniture maker only needed 2 dozen eggs to feed his family and in addition, he wanted a side of beef. For that, he would make you a dresser you could trade it to the clock guy.
In order for you to get your clock, you would have to exchange some of your eggs for a side of beef, then take the beef in addition to another 2 dozen eggs and trade all this for the dresser. Next you’d take the dresser that the clock guy wanted and trade it for the clock.
Now what if the clock guy had gotten a dresser already while you were running around trying to get all this sorted out? You’d be stuck with one dresser and your eggs but no easy way to get the clock you wanted. Money resolves all those challenges in being a common representation for energy.
Money was a divinely inspired creation! It simplified everything. One could go to a central market and give them your eggs, or clocks, or beef or dresser and they would give you coins and paper. In reality, the coins and paper had no real value since you couldn’t use them for anything practical. However, the system worked because everyone agreed that the bills and coins represented the value of the things you traded them for. This is why on all the bills (at least in the US) the words ‘In God We Trust’ are printed. It is a declaration that we are all acting on faith that the bills will retain the value of the energy exerted to acquire them.
When you really get this, it becomes very obvious that money is used in exchange for value. More accurately, we would say it flows towards perceived value because not everyone sees value the same way at the same time. For example, a person utterly parched without water and dying of thirst literally would value a gallon of drinking water much higher than say a luxury car, at least until he is out of danger of death. Most of us know a car is worth a lot more than a gallon of water but if you are about to die, the water jumps in value.
When people face difficult health crises and must pay large sums of money for treatment of their loved ones, we see that they are willing to give everything because they value life. They may not be willing to just give their loved ones that money if no health risk existed. Thus we see that our values change based upon our needs in the moment. This is why we say money flows towards perceived value to allow for the subjective interpretation of value which changes over time.
Increasing the Value you Bring
If you want more money to flow to you, find out how you can increase the value of your goods, your services, your time and your knowledge. This is step one. The higher the perceived value of what you have to offer, generally the more money people will pay you for it. In modern society, a doctor provides a higher perceived value than most other professions so doctors receive lots of money for their services. Lawyers, engineers and CEOs of successful companies carry the same perceived value in what they do.
Teachers or nurses on the other hand though giving tremendous value are not paid nearly as much. This is because the perceived value of education or nursing care is still rather low amongst many people. When people consider a career path, they have to find a balance between doing something that is meaningful and doing something that will be rewarded financially based on the how society perceives its value.
This is why it may be fulfilling spiritually to pursue a career as a musician or an artist but also frustrating financially because only a few musicians and artists ever produce works that have a very high perceived value to a large audience.
Parents and elders know the hard road ahead for choosing these sorts of risky careers and may discourage such efforts however all souls are free to choose as they like. We would just like to emphasize that in a high percentage of cases, those in the arts struggle to earn competitive wages without supplementing their income through teaching or other gigs that may compromise their personal artistic vision.
Having a high perceived value is one thing but being able to convey that value so others can experience it is another thing. An example might be seen in how people advertise their home when they want to sell it. One person believes there is value in contracting a good real estate agent, spending money to get repairs done before listing it, paying for good photos etc. They feel the initial outlay of money will lead to a higher return when it sells.
Another person might take the pictures themselves and advertise a reduced price if the buyer does the repairs after closing. Who’s going to make more money in the end? Normally the one who invested more because they marketed the property better.
Those shopping for a new home will tend to be drawn to the place that has higher perceived value. In this case, the marketing of the house with the agent that was repaired in advance creates more demand and so more people see it. Likely that seller will make more money even with the expenses invested before listing it because most people prefer buying a house that won’t require additional work after they move in.
The hardest thing sometimes is discovering an effective way to communicate the value of your goods and services. This is the essence of marketing. Marketing is different than sales in that marketing is about stimulating people’s interest in your goods or services. You have to figure out a way for them to know that what you have is available. Sales is the art of allaying their fears and helping them decide to risk a purchase.
Focusing on the Value Piece
Let’s focus on value. You must be resourceful in order to determine the value you can bring and that people will pay for. For most, this primarily comes from your employer. You give your time and expertise in a given field for 30 to 60 hours a week and each month, they compensate you with money.
The money they give you is in the form of a check. The check is an easy way to communicate to a bank that they have given their consent for the ‘stored energy’ held in their account to be transferred to your account.
If we return to our discussion about credit cards, we see a completely different value equation yet one that follows the same principles. Credit card companies which are really just banks, offer their reserve funds (money) as their product. They know that many of us want to buy things that we can’t afford at the moment so they offer to let us use their money. We value their money since it allows us to have our desired things even though we technically can’t yet afford them.
The one catch is that we have to pay for this valuable service! If we opt out and refuse to use credit cards, we have to wait until we have enough of our own money so we can buy the thing we want without having to borrow any money. The advantage is obvious. We don’t pay any interest. At the same time, we have to delay the gratification by waiting until we have enough of our own money.
This brings us to a very interesting paradox. From what we have discussed so far about credit cards, it appears they make it too expensive to use their money unless we are taking advantage of the opportunities they offer without paying them interest. This is true.
Buying nonessential stuff using credit cards and not paying it off as soon as the bill comes means you are paying a premium for the stuff you want. You’re paying the store’s price as well as a fee (in the form of interest) in order to get what you want sooner. It’s instant gratification at a high price tag.
One important lesson we can learn from banks is that money can be one of the things we have that has value. Banks provide a service to the people. They say “You can keep your money safe with us. We will hold it for as long as you want and you can log into your account to see how much you have whenever you want. We won’t even charge you any fees so long as you keep a certain balance with us at all times.”
Do you know why they offer such a service for free? Because they can use your money to make way more money! They understand the value of money being active as opposed to it just sitting in a savings account. If you equate money to energy, what good is tank full of energy if it just sits there and doesn’t get used? It would be like having a huge reserve of gas while being too afraid to drive your car.
An Example of How Banks Use OUR Money to their Advantage
Let’s say 1000 people in a city have bank accounts with $5000 each. That means the bank is holding $5,000,000 of peoples’ money that is not actually the bank’s. The people are happy because they feel their money is safe which it is. And whenever they need to access some or all of it, they go to the bank or an ATM and it is freely given.
What most people don’t realize is that by law, the bank only has to keep about 10% of their deposits in the actual bank. This ratio is determined by governing agencies to avoid catastrophes. A catastrophe might be if all 1000 people showed up on the same day at the bank and wanted all their money at once.
If the bank did not have enough to cover the requested withdrawal, this could lead to people freaking out! After huge research and years of experience, banks know that it is virtually impossible for them to ever face demand for more than a few tiny percentages of the money they are holding. 10% is a very safe reserve in the banking industry and so the days when people got wind that a bank was out of money and everyone went psycho trying to get their money are essentially over.
You may wonder what banks do with the other 90% of your money since they only have to keep 10% on hand. Well, we know what they DON’T do. They don’t give YOU anything for it (in the form of interest on your savings). Paying clients interest on their deposits is rare though it used to be the norm. Instead, they take the free money that you have ‘loaned them’ and they invest it and lend it out to other people with one key exception. They charge people interest to borrow the money you deposited with them!
Let’s say they take the $500,000 which is the required reserve of the $5,000,000 of the money they are holding and they store that cash in their vault. The other $4,500,000 they divide up into mortgages and other loans. Perhaps they lend 40 people $100,000 at an interest rate of 5% and the remaining $500,000 they lend to 10 small business owners at 10% interest. If we look at their books at the end of the year, we see that the money deposited by 1000 people in the amount of five million dollars which the bank was given essentially for free has yielded a profit of $250,000.
That figure comes about as follows; $4,000,000 in mortgages at 5% yields $200,000 and 10% of $500,000 yields the additional $50,000. Overall it’s a 5% gain for the bank but keep in mind, they are using your money to generate that profit and all you get is a place to deposit it.
In reality, the banks have billions of dollars in deposits. Let’s just run the same example with a billion dollars ($1,000,000,000). Using the required reserve ratio of 10% (which is $100,000,000), the bank would still have $900,000,000 of people’s money to lend out, invest and speculate with. At 5% return, they generate $45,000,000 gross profit using our money.
Banks hire the top notch financial analysts and the smartest investors to determine the best ways for their/our money to have value. From here they develop portfolio strategies determining how much money to lend out in mortgages, how much to lend to businesses and how much to invest in other securities. You can be pretty sure they are making more than 5% return since they have such a skilled team of investment advisors on their staff.
Why are we letting them use our money for free? Because in most cases ignorance and fear prevent many people from acting with greater boldness. What if instead of giving our excess cash to the bank, we learned how to act more like a bank and see the value in the money we have that normally we deposit in a savings account? This opens up a world of possibilities and it’s very exciting.
To be fair, many people do take their savings and retirement funds and attempt to increase the value of these amounts through smart but often conservative investing. The problem is that we go to financial advisors who don’t teach these spiritual principles. Many (not all) advisors are perpetuating the fear of worst case scenarios that will almost never happen. They are teaching us to let other people manage our money as opposed to empowering us to act with greater confidence.
Supply and Demand
Now we can examine higher financial and economic concepts in ways that inspire us rather than leave us bored and overwhelmed. In order to use our savings to the most abundant means, we will need to educate ourselves so we make good decisions that yield good financial returns.
One such concept is the rudiment of all economic activity; supply and demand. These two factors have a very significant effect on how much money you can make with your money. Remember your excess cash is in the form of energy. It will fuel certain business ideas and investments but it won’t guarantee success. Any movement of money carries some risk.
As such, the financial advisors often recommend taking the safest route possible which is letting THEM use your money. This is better than depositing it in a savings account because banks give you almost nothing in interest while financial advisors generally claim you will see gains between 4 to 7% on average by planting your savings in certain securities (mutual funds are the most often recommended). This may be enough of a return for many people as the risk of letting advisors place your money is far less than if you try to manage your money on your own.
The problem is that it is quite hard to reach that elusive state of financial abundance at these rates of return. Your money will grow slowly over time and the end game we are presented is a certain lifestyle once we reach retirement age. Well, if you are experiencing money constraints now while still employed, it is very likely you will continue to experience similar constraints in retirement.
In order to break away from that mentality and experience God’s abundance on the financial front, we have to be more courageous! And we need to be wise as well. It is rather common that people get very passionate about a business idea and decide to courageously make a go of it. Unfortunately many of them fail and it costs them years of saved up money.
Many of these failures can be avoided through educating yourself and making gradual steps into more successful business endeavors. Before getting started, it is wise to investigate the supply and demand for the goods or services you wish to offer.
A simple example is opening a hair salon. Perhaps you feel you have a talent to cut and style hair. In addition, you like the idea of running your own salon where people come, and there is a nice energy, pleasant socializing and you could make a good income. Nothing wrong with that.
The problem may be in the supply and demand for such a service. In most big cities, hair salons and barber shops are all over the place. This is because everyone needs to do something with their hair. Therefore, the demand for hair care is going to be consistent.
However if there is an abundance of salons, it means the supply may be too great for that level of demand. With so many hair shops, people have a lot of choices as far as where they get their hair cut or styled. This means each hair salon may be getting less than the needed amount of business and some of them will fail to meet their expenses. In other words, if supply exceeds the demand, there will be struggle for the less competitive shops.
There are a few ways to influence the supply and demand factors. This is the essence of differentiation. Even though there may be a large supply of hair salons, perhaps you can present a service that is unique meaning a way of cutting hair that is a level above the average salon.
When you can accomplish this by being better than average, you increase the demand for your hair styling and people opt to come to you over other places. Another way is to offer a lower price. This will increase the demand for your service amongst the frugal people. A third way has to do with your location. The more convenient your location is to more people, the more they may be willing to get their hair done at your place because it is faster and easier even if not the cheapest price or the best haircut.
UBER, Ridesharing and Supply and Demand
For a more intricate example, let’s examine Uber as a basis to demonstrate a successful new business in relation to supply and demand. The service Uber offers is twofold. They offer the public an alternative form of transportation. They also offer people with cars the chance to earn extra money.
Before Uber, people could walk, bike, drive, take a taxi, or take a bus to get around their city. Uber presented a cheaper alternative to taxis called Ridesharing. The initial idea was that a person with a car who was heading to a specific location could drive other people in the same direction and make a little money for doing so.
The idea had a good social feel to it. Sort of like. “Hey, I’m going to the west side of town. You don’t have to take a cab. Just ride with me and give me $5. Much better than the $15 a cab would charge you. Everyone wins!”
The ones needing the ride had to consider what other supply sources to use for their transportation needs. Uber was willing to risk that people would prefer ridesharing over taking the bus or taking a taxi for several reasons. First, it was cheaper than taxis but with the same door to door service and while more expensive than buses, it was much faster and more personal. In fact, it was better than using a taxi because taxis would only pick up passengers at specific addresses while Uber would allow you to be picked up anywhere you had a GPS signal, including any random intersection.
Second, people liked the idea that they were giving money to normal everyday people who were offering them a ride. This was critical because it highlighted that people didn’t have the best perception of the taxi industry. Dispatchers were often curt, cabs didn’t always show up and the price to take a cab was quite high for most people. One way to consider this is that people felt a lack in the supply of pleasant modes of transportation that offered door to door service. Cabs didn’t offer a good feeling and stepping up to limousines was too cost prohibitive.
Riders may not have realized it, however there was something missing in the ‘supply of transportation options’. Uber saw what was missing and began developing a way to become a new supply of transportation. They likely wouldn’t have invested too much into developing the technology if they didn’t think there would be sufficient demand for ridesharing.
Demand represents the side of the equation whereby a good or service is needed by people with money to pay for it. Uber had to examine first if the population would accept ridesharing as an alternative to driving their own cars or taking cabs. These were the two main competitors to Uber.
In addition, they had to determine if there would be a demand on behalf of car owners to participate as Uber drivers. Could Uber offer enough compensation and convenience for someone with a car to pick up an unknown rider and take them to their destination? It’s unclear if Uber realized that eventually many drivers would get totally immersed into the whole ridesharing world and actually make Uber a primary income source for themselves.
In seeing this happen, it reveals that when it comes to drivers, there was sufficient supply and demand. At the same time, supply and demand for rides fluctuates based on the day of the week, the part of the city and the time of day. Uber thus influenced supply and demand by making it cheaper to use the service during non-peak hours. This lower price was an incentive for more people to use Uber (increasing the demand for rides since they were cheaper) which in term stimulated the demand for more drivers.
When it was peak time (surge as Uber called it), Uber needed more drivers on the road so Uber offered them more compensation by raising the price during ‘surge hours’. Demand for rides during surge hours was higher creating the need for a supply of more drivers.
Through examining the evolution of ridesharing we can see the importance of understanding how supply and demand affect a business’s chance of success. Our task is to find something that interests us and that we can provide in a way that is better than the competition. In the business world, you sometimes hear the expression; ‘building a better mousetrap’. This is meant to highlight that a successful business has to improve upon what currently exists to solve people’s challenges.
The challenges and discomforts that people have lead to a demand for relief. This is what gave rise to online dating. Many people were struggling to find romantic partners, especially as they got a little older and were divorced or had been out of the dating scene for many years. Online dating presented a new way to explore possible dating partners.
The end goal was that people who were single and unhappy could resolve that challenge and discomfort by finding a partner using an online dating site. It has been a huge success! As we know, it changed the way the whole world meets each other.
It worked because there was a huge supply of single people who were struggling to find partners and a high desire for romantic connection amongst these singles. What made online dating succeed was people were finding it too hard to meet and connect. Online dating made the initial connection a lot easier. The service provided a solution to the supply and demand imbalance.
These examples are good because we can clearly see how strong supply and demand opportunities lead to huge opportunities for wealth. They aren’t great examples for the average individual who wants to take their savings money and increase their income because the scale of these services is simply too grandiose. We discussed them so you can grasp the importance of understanding supply and demand.
No matter if one is trying to revolutionize the transportation world or open up a hair salon, understanding supply and demand is essential to seeing your money earn strong gains. It’s why credit card companies make a killing. They realize there are millions of people who can’t afford all the amazing things they see in stores and on TV. The demand for a way to have the things sooner and not having to wait until you have all the money needed gives rise to a need for a supply of credit.
Demand is also high because emotionally we are taught to seek immediate gratification. These factors make a credit card a very attractive service! It meets a very real demand by supplying a way to have what we want without having to pay for it all at once.
What Options do you have?
Now the challenge is to examine the options you have to see your dormant cash begin to earn a solid return. You get next to nothing if you let it sit in the bank but you are 99.9% sure it will be there whenever you need it. No risk but also no reward.
You can give it to an experienced advisor and while your risk goes up significantly, you can expect a solid reward of 4 to 7% when averaged over many years. Some years you may earn 15% and some years you may even lose money but over decades, you can expect modest and consistent profits.
The challenge with this approach is that it is passive. You learn very little and you resign yourself to letting other people make your decisions for you. No one gets rich this way though many slowly grow their savings account with the hope that they will have enough come retirement time.
We are seeking to be empowered. Yes, we will need faith to take on the additional risk. Such is the Way for those who want the rewards that God promises. But the ones who have figured it out are really no different than us. Perhaps they arrived at this point sooner or had people who encouraged them to learn and try being bolder with their money. Now it’s your turn.
Through devoting yourself to the study of money (as energy) you can quite quickly have a transformed mindset around finances. You can begin to look at your life with a fresh set of eyes and see to what degree you have prioritized using your skills, talents, time and energy to create value for others.
Granted, some ways we create value don’t translate to much money. We discussed teachers as an example. Good teachers bring tremendous value into society however the values our societies hold favor other services over education. The point is we want to do what is meaningful to us AND find a way to earn an abundant income. This requires skill.
Before you get too excited and lunge out prematurely into a business idea or new investment, move into self-reflection. Remember that your subconscious beliefs must line up with your conscious desire for greater wealth. If they don’t align, the subconscious generally prevails because we want to be congruent with our deepest held beliefs.
Meditation and spiritual direction are your best tools to get to the root of your beliefs. Once you patiently do the inner work to allow for abundance to flow freely to you, one major obstacle is removed. Next comes the fun part; deciding how you will interact within the monetary system to draw greater wealth to you.
Patience is very important. At some point you’ll need courage to take action. If you are employed, examine your salary against the money that you pay out each month in expenses, bills and debts. The first critical shift is making sure you are not ‘too close to the bone’ each month. What this means is that you need to be taking in more than you are spending.
Some people have retirement funds that are earning interest meant for 20 or 30 years in the future while at the same time slowly paying off student loans or credit card debt at moderate to high interest rates. The prevailing mindset is that it is ok to pay off these debts slowly since you can afford to, and you should never touch your retirement fund except in a dire emergency.
These ideas are not rooted in spiritual principles. They are too rigid. It doesn’t make sense to have $20,000 in a retirement account where the interest is building each month while you accrue expensive interest charges on long term debts. It is worth considering that taking the retirement funds and clearing your debts to whatever degree you can means your monthly expenses drop significantly right away.
Of course you may not have a retirement fund after that however you can say you have stopped the bleeding as far as costing yourself a ton in interest payments. You will feel emotionally much freer and can start rebuilding your retirement fund at a quicker rate so long as you don’t continue to accrue high interest debt. These changes often stir strong emotions which will help you realize what your beliefs are around money. Wherever you feel strong emotions, you can be sure there are beliefs that are being challenged.
In the meantime, you have to discipline yourself away from buying things you can’t afford at your current income level. There are two exceptions to this concept around long term debt; owning a home and owning a car. A car dramatically increases your opportunities to succeed financially. If you shop around and have a good credit score, it is pretty easy to find ways to finance a car loan that is worth it. And everyone needs a place to live. Real estate is considered one of the safest investments if you buy wisely. Ironically, buying a house in cash and not taking on a mortgage is generally a bad financial move. Let’s explore why that is.
Many financial advisors will recommend you pay off your house as quickly as you can since there is great security in knowing your home is paid off. This is mostly a fear driven way of thinking. Remember when we discussed what banks do with our money. They are only required to keep 10% on hand in their vault. Then they take the other 90% and put it to work. We can do the same.
Let’s say the home you want to buy is valued at $250,000. And let’s say you had saved up $275,000 over 20 years. You feel so happy that you can pay for the entire house and, after closing costs of $5,000, you are left with an emergency fund of $20,000 which you put in a savings account at an interest rate of .01%.
Each month you have no house payment but simply put aside the necessary amount to cover your annual property tax ($1200/yr) and homeowner’s insurance ($1500/yr). Your expenses on your home are a very manageable $225 per month. You are able to afford nice vacations, own a nice car, send your kinds to good schools and even put away a little each month into savings. But is this the best way to grow abundant wealth?
Let’s look at a different approach. If we become proactive, we learn of the various mortgage products. Did you know that banks refer to mortgages as products? Sounds weird but they are selling the use of their money (or as we discussed, actually the use of OUR money) back to us. It is a skill to examine the various mortgage products out there so you can compare the scenario of financing your house in comparison to paying it off in full.
Let’s say that you can obtain a decent interest rate of 4.25% if you put a down payment of 20% of the price of the house. This would mean you would pay $50,000 from your savings and the remaining $200,000 would be mortgaged leaving you with a monthly payment of $954. You would also have to pay the $225 to cover your property taxes and insurance making your total monthly house payment $1179.
Initially this seems worse since you have almost $1000 in additional expenses each month. Yes but remember you also have $200,000 in cash that is available. Let’s say that over the next 2 years, you found 4 houses of similar profile, each worth $250,000 and in your area, these houses could be rented for $1600 – $1800 per month.
Each one requires you make a $50,000 down payment and mortgage the rest. While it is a little unrealistic to imagine all 4 houses would be exactly the same, let’s run with it to make our point. Each house leaves you with a monthly payment including mortgage, property taxes and insurance of $1179. Let’s say you rent one at $1600/month, one at $1675/month, one at $1700/month and the last one at $1800/month.
Your total income in monthly rent would be $6775. Your total monthly payments for all 4 houses would be $4716. And to be safe, let’s say you put aside 10% of your rents as a fund for repairs which would be $677. This leaves you with $1381 in monthly income after all expenses from the 4 houses.
In the first scenario, you save $954 per month as you don’t have a mortgage payment and you slowly build wealth as your primary residence appreciates in value over time. In the second scenario you have to pay your mortgage payment of $954 but you take in excess cash of $1381 on the other 4 homes rendering you $427 in positive monthly cash flow. As well, you are now building wealth in 5 homes as they appreciate overtime while your tenants are paying off your mortgages on the 4 rental properties!
To further drive home the point, imagine these 5 homes increase in value at a conservative rate of 2% per year. On a home valued at $250K, this means an increase in value of $5000 on each property. Let’s fast forward 10 years…
Scenario 1: I own my home and haven’t had a mortgage payment in 10 years. I saved $114,500 in mortgage payments and my house increased in value $50,000 (10 years at $5000 per year). Total gain in net worth: $114,500 + $50,000 = $164,500. Not bad.
Scenario 2: I have been paying off 5 homes all of which have increased $50,000 over the ten years. My rental income steadily increased 5% per year on average (which is realistic) but I typically had 5% vacancy (times between tenants when I wasn’t collecting rent) so these cancel each other out. My positive cash flow over the 10 years ($427 per month X 120 months) is $51,240 and my homes increased $250,000. In addition, I discovered over the years at becoming a better landlord, my repair budget was closer to 6% and not the 10% I had thought. This means an additional revenue of $270/month or a total of $32,400 after 10 years.
Total gain in net worth: $51,240 + $32,400 + $250,000 = $333,640. Much better!
And don’t forget that after 10 years of your tenants paying rent on the 4 rental homes means you have a ton of equity in each one in addition to the appreciation. This explains the concept of leverage and how, in 10 years, your net worth is more than double than if NOT using leverage. It is understood that more work is involved in being successful in Scenario 2. More work means more effort which means more value offered to society. More value is rewarded with greater abundance.
Being a successful real estate investor takes time to learn the industry and develop the discernment of picking good properties, picking good tenants and managing expenses. This is the cost of wealth building. You have to find the right avenue to take some risks and develop the skills and experience.
Real estate may not appeal to you but perhaps you have an idea for a business where you live where is a lot of demand and no one is supplying the solution. Or else you just want to become a lot more proactive in where you invest your money. You can see that in order to manifest greater abundance, you will need to expand outside of your comfort zone.
Wealth building done in harmony with spiritual principles begins with an understanding that the more value you provide to others, the more money flows your way. Finding out the best way to provide value is a personal choice.
Meditate and explore what you feel moved to do and how much you can sacrifice comfort for the boldness of a new possibility. At the same time, the inner world of your beliefs needs to be renewed in Christ. This means you are no longer bound by fearful and inaccurate ideas taught to you by others regarding money.
The way to build wealth is to commit to learning how. This article provides many ideas and examples to demonstrate the concepts however experience in the real world will help you gain wisdom and greater confidence. Be alert to doing a lot of studying and taking action when you sense an opportunity. God wants us empowered and taking action is a demonstration of our faith in abundance.
If we act, God can support us with the movement of Spirit. Remaining nervous, fearful and hesitant communicates a lack of faith. We really don’t want to send that message back to our loving Creator. Be bold and see what develops!