Financial Literacy Revisited: You and Your Income

I previously wrote about financial literacy here: Conceptualize Your Financial Literacy. That post was connected to the ‘Ohana in Business model. Let’s get personal in this one: Your financial literacy will lead to your financial well being.

Gut check: Empathy, understanding

The current U.S. government shutdown is certainly an exercise in empathy which seems to hit closer to home with every passing day. (As of this writing 01.22, we’re at day 32 of a shutdown which, in my opinion, should never have happened.)

If not among those furloughed, we ask ourselves, what if this happened to me, and I lost my job, for factors completely out of my direct control?

Livin’ the Dream with Green Stamps: A 1975 Catalog page from flashbak.com … Remember S&H Green Stamps? Pasting them in these booklets was one way my mom kept us busy as kids.

It has also become an exercise in understanding, for we better understand what our government actually does outside of Congress, the White House administration, and our U.S. military—their fingers reach far into much we take for granted. That bloc we normally lump into the category of “governmental agencies” is becoming more human, and more understood in regard to its influence on our social and economic constructs.

The shutdown has certainly illuminated how many people with a “good government job” wherein ‘good’ implies they’ll be among the few who can retire with a pension one day, live in a stressful paycheck-to-paycheck subsistence. They overly rely on juggling liabilities and their credit, and have zero in their emergency funds.

“Nearly half of Americans would have trouble finding $400 to pay for an emergency. I’m one of them.”
—Neal Gabler, The Secret Shame of Middle-Class Americans

Don’t let this happen to you.

When I dwell on that question, “what if this happened to me?” I get a new resolve to never let that happen. I don’t mean to imply that having a government job is an ill-conceived choice. I do mean that basic financial literacy today requires us all to diversify our income, and have multiple revenue streams.

“Serious entrepreneurs have 2 goals: Passive Income and Multiple Revenue Streams. The biggest difference between a job and a business is that a business keeps making money for you when you’re off the clock.”
—Kimanzi Constable

Constable, above, is directing his statement to entrepreneurs and business, but the fact of the matter is that he describes what must be basic financial literacy today—a literacy that will better assure our economic survival on a personal basis when we proactively take action on it.

To be financially sound, isn’t to be wealthy; it’s to remain comfortable and secure—well fed, well housed and safe, well engaged in living a good life—no matter the misfortune or economic downturns that may come our way.

I agree with Constable’s goals for everyone, and not just those in business: Cultivate passive income and create multiple revenue streams for yourself.

Passive income is where you get paid over and over again for work that you did once. My book is an example of my own passive income, though I’ve done more work to keep it updated, and keep it in publication.

To have multiple revenue streams does NOT mean you must have more than one job (i.e. if we define ‘job’ as the way you get a paycheck from another employer). In fact it’s smarter to get a 2nd job as your very last option, with your primary strategy being to work for yourself and on your own timetable; please don’t relinquish too much control over your life to others! My husband and I both cannot look forward to securing a pension one day given the lines of work we’ve chosen, so one of the things we did was save up for an income property that would be mortgage-free and require minimal maintenance costs.

I’ve shared just two personal examples. Spend some time researching the different kinds of passive income and multiple revenue streams there are, and you’ll find a number of possibilities for you. Some are short term, and you may wonder why you didn’t start sooner.
[For additional reading, Trent Hamm’s blog, The Simple Dollar is a great place to start.]

Master your life, by mastering how you live it.

“The master in the art of living
makes little distinction between his work and his play,
his labour and his leisure, his mind and his body,
his information and his recreation, his love and his religion.
He hardly knows which is which.
He simply pursues his vision of excellence at whatever he does,
leaving others to decide whether he is working or playing.
To him, he is always doing both.”
—François-René de Chateaubriand via Alastair Humphreys

In a recent newsletter, I shared the story of adventurer Alaistair Humphreys; how he taught himself to play the violin, and why, is truly inspiring. Watch this 26-minute video: How to Live Adventurously Every Day.

Our current value immersion with Mahalo is very useful in this regard.

Take another look at the section in my book’s chapter on Mahalo where I talk about “The good fortune of all managers” and how to “Take stock of what you have.” (pages 218-222 in the 2nd Edition). Now turn it into a personal exercise.

Evoke Mahalo to take stock of your talent, skills and strengths. Then, give more thought to how you can capitalize them, and turn them into more earning potential.

You do this, by asking yourself the right questions. It’s not “what other kind of job could I have?” for that question still keeps you dependent on what others will offer you. Instead, ask yourself questions like these, which point to your own assets, talents, knowledge and skill:

—what value can I offer to others?
—what do I have in abundance, that can be shared with others?
—what can I make, and sell?
—what’s easy for me, yet harder for others, and they’ll pay me to do it (or provide it) for them?
—how can I solve a problem for others? What solutions are relatively easy for me to offer?
—what are the ideas I have, that I’m not seeing others make progress with?

Think in terms of both products—be a maker, and services—be a provider.

A Quote Worth Thinking About

“A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”
— Robert A. Heinlein, Time Enough for Love

If you need some stretch in your thinking, check out this list. Some of it made me shake my head, thinking  “this is so not me!” yet all while smiling to myself… the possibilities really are endless when we challenge ourselves to truly inventory the myriad of skills we possess as human beings!

Then go for it; give yourself a kick in the you-know-where if need be. There’s no ceiling on hustle. Build up your financial reserves before the day arrives where you find you desperately need them.

“Choose to do what demands the most and the best of you. If it was easy, it would have been done already.”
—Make: Magazine and Maker Faire founder Dale Dougherty on the best advice he has ever received.

Postscript: I’ve been keeping my eye on a series at The Atlantic called “How Money Works” and you may want to as well.

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Preview of Managing with Aloha, Second Edition, released Summer 2016
Managing with Aloha, Bringing Hawai‘i’s Universal Values to the Art of Business