4.2 | 8 Revolutionary Habits for Financial Independence
Isha Vela 0:00
Welcome to Devotional Anarchy, a podcast about intimate embodied leadership that is radically human, honest AF and thereby inherently disruptive to systems of disempowerment and disconnection. I’m Isha Vela, trauma psychologists, certified somatic practitioner, wealth wizard, licensed financial professional leadership coach, and intuitive business mentor. You’re here because you know self intimacy and self knowledge is the source of everything you want to create in your life. And that building safety and trust in your bodies is what allows you to fully own and steward your energy in the direction of your desires. This season, get ready for deep dives into wealth building, spirituality, emotional leadership, and human centered business with an activist twist. The conversations and tools shared in this podcast are your permission slip to manifest a life and business that lights your soul on fire and supports collective liberation! All right, y’all, here we are eight habits for financial independence. I’m really excited about this topic, because I am feeling I don’t know if you’re feeling it too. This this momentum around 2024 Around the age of Aquarius, I’ve been feeling so much renewed energy around my business around how I do business, creative flow. And it’s not that I didn’t have that before. It’s just like, I’m just feeling it more intensely now. And I’m feeling also this like this opening to innovation and just doing things differently, just like even more permission to do things your way. And I’m wanting to offer this particular episode right now. Because I want to invite you into thinking feeling relating differently around your money around how you manage it. I want you to become financially independent, if you aren’t already. And I want you to have the stability that you desire in order to make some moves in your life in order to have some sense of like that you can like do things that you have some sense of freedom with the money that you have, and that you can, when I say make bold moves, it’s not just for yourself, but really for the collective because I know that if you’re listening to this podcast, I know that you are collectively minded, I know that you care about other people. I know that you there’s you have dreams, you want to do things with your life, and you want to support other people in that doing. So, you know, I can’t offer you advice because I am a licensed professional, licensed financial professional. And that’s the irony, right? Like a lot of the people that are spouting advice and telling you do this do that are not licensed. And the people that are are regulated, are subject to regulations in the industry that don’t allow them to just make blanket statements. No, your finances are very individual to what your goals and dreams are, what your current situation is, whether you’re in debt, whether you’re not in debt, whether you have you know, money set aside whether you don’t so it’s always advisable that you sit down with a financial professional such as myself, or somebody on my team that will sit with you for free. We will sit with you for free because we have a mission of no family left behind. Right No people left behind. No everybody gets financial education, everybody gets access to the tools and platforms and solutions that we offer people. So let’s start with the definition of financial independence. What does it mean? Financial Independence means having enough financial stability and resources to support your desired lifestyle and meet financial goals without depending on others, right and maybe depending on others means, you know, depending on your family to fund you or depending on the government right for for any type of financial assistance. It includes being able to cover essential expenses like housing, food, health care, education, as well as discretionary spending and future financial planning right discretionary spending, it could be anything, it could be sort of like what you set aside for those collective goals and projects. And people achieve financial independence by generating income through investments through savings or their businesses entrepreneurship, which helped them maintain their desired standard of living or, or and achieve long term financial security. So It also requires stewardship, right, the responsible management and control of one’s finances making informed decisions about spending, saving and investing. Right. And that’s really what I want to focus here is that third piece, the responsible management and control of one’s finances, making informed decisions. And to reach financial independence, you have to know your financial independence number, which is this is we often call this the FIA n, this is the amount of money you need to save, so that you can live off the interest of what you have saved of that lump sum without needing to work anymore. And to calculate your financial independence number, your fin, you want to figure out the yearly amount of money you want to have available to to support your desired lifestyle, let’s say hypothetically, it’s $8,000 a month in today’s dollars, right? Without assuming inflation. That’s a pretty reasonable number, it isn’t your you know, it isn’t like 10k or above, which would still be like, you know, reasonable if that’s what you desire. You know, $4,000 a month is like your covers your expensive, but doesn’t give you a lot of wiggle room $1,000 A month gives you like a little bit of both, right, but it’s still sort of like a humble number. So you want to take that $8,000 and divide it by 4%. So so I would take 72,000, right, because that’s the year a yearly amount of $1,000 a month, and divide that by 4%, to get almost $2 million, it’s 1,800,000. So, you’ll want to know, depending on how many years you have to save for retirement, what you would need to save on a monthly basis in order to reach that $2 million, right, let’s say you have 20 years until retirement, let’s say you are 45 now, and you’re planning to retire at age 65, you’ll need to save $7,500 a month to reach financial independence to reach your fin number by the age of retirement. So, okay, now that I’ve given you a bit of a reality check, and a wake up call, let’s talk about changing your habits, so that you can change your financial future and reach financial independence. Because what I find is that, you know, people underestimate the amount of money they need to set aside for retirement and you don’t start thinking typically about retirement until you are entering your 40s. And you’re feeling a little bit of the tiredness of working. And then you think about how much longer am I going to be able to do this, right. So I hope that if you’re listening now, and that if you’re younger than 40 years old, that you start saving now for retirement so that you can if you want to retire, you can retire at 60 view, if you reach your fin by 60 or 55. You can retire then, because I hear so many times that people want to retire prior to 65. They want to retire tomorrow. Right? So then you start need to start saving early, right? And there’s lots of ways to reach your fin. I’m not saying you have to, you know, be an employee anywhere or do any of those things, right. I’m not telling you how I’m gonna get into some possibilities in a moment. But But yeah, it all depends on sort of like, the money that you have available, and resources that you have available. All right. So let me go back. When I talk about habits, right, this is this is a podcast about this episode is about habits. And what I want to preface my conversation with is
Speaker 1 8:58
I’m I’m inviting you to break free from systems, right part of independence, financial independence, or any other sort of independence, right? is about breaking free from systems. And the systems are capitalism, consumerism. Right? Pluto and Aquarius is asking us is inviting us into a paradigm shift. And that paradigm shift into new systems includes you breaking free, right, this is internal work as well as external, right. And when I when we think about systems in general, right, which includes the banking system and includes the economic system, and we don’t have a crystal ball into the future. I don’t know what the banking system will look like in the future. I don’t know what the new economic system will look like in the future. But I believe that it is in part created through us from the bottom up instead of from the top down. I want to invite you to think about your power as a consumer, right, I’m gonna put that in quotes right now, because I don’t think of you as a consumer, I think of you as a person with a lot of power to make decisions. And the decisions that you make about your money will affect the economic system, right, just as we saw in 2023, the way that people were buying and not buying things, affected industries affected lots of different industries. So I want you to really take that power into account, and then make very conscious decisions about how you steward your money, might want to think of yourself as a creator, not a consumer, right. And so here are eight habits to support you creating a healthy, healthier financial future, not only for yourself personally, but also thinking about the the future in systems and collectively. So let’s talk about let’s talk about retirement for a second, right thinking about what I said earlier about people under estimating the amount of money that they need to set aside for retirement. So most people have a 401 K, maybe they have a SEP IRA, maybe they have a little bit in their Roth IRA. But they don’t understand that that 401 k is going to get eaten up by inflation 3% per year, and taxes 30%. And we don’t know if that’s going to go up or not, it’s been predicted that taxes will go up higher than 30%. So this is the reason why it’s important to invest in tax advantage strategies as well. One example being a Roth IRA, I know that there are limitations to how much you can put into a Roth IRA, but I find that people don’t have as much in a Roth or don’t have a Roth at all, versus a SEP IRA or a 401. K. So definitely, you want to be shifting your attention into tax advantaged strategies. And there’s also, you know, cash value life insurance, which is, you know, a super Roth where you can, you’re not limited by the amount of money you put in, you’re not limited by there’s no restrictions on how much money you make whether you qualify or not. That’s not, that’s not an issue with cash value life insurance. So just want to talk about that for a second. And then I also want to talk about consumer culture, right thinking about consumer versus creator. So the average person has $100,000 in consumer debt, and only $5,000 in savings. And I don’t say that to shame you, or shame anyone I say that because I’ve been there. I say that because our spending habits haven’t changed, as macro economics have changed. So you know, as as macro economics has shifted our behavior, right, or our identity as consumers has not changed. And I think that we need to be more in alignment with the macro economics and not wait until like, shit is hitting the fan in order to change our behavior, right? The but it’s sort of like human nature to stay comfortable, right. And so I’m inviting you again, to be to be willing to be uncomfortable and to make changes before you are forced to. Yeah, and so when we don’t see the our behaviors change with the macroeconomics, we see that the debt savings ratio ends up being pretty skewed. So and most of us have an unconscious consumer identity, we don’t necessarily think of ourselves as consumers, but that’s how we behave. And, and I’ve said this before, from our very earliest experiences, we are marketed to babies are marketed to children are marketed to I remember like My Little Pony Barbie, like all the things you need this thing, when you have this thing, you will be popular, you will have more friends, you will have more fun, like, like, our consumer culture has manufactured deficiency based on our age groups, right deficiencies and insecurities that they then market to in order to resolve right in order to resolve whatever they’ve manufactured with products and services, right? Whether it’s makeup, whether it’s clothing, whether it’s a car or a house, right. And the other sort of human neurochemical attachment side to this is that we get dopamine hit from spending money we get dopamine, dopamine hits from, you know, consuming in ways that like, fulfill those insecurities, those manufactured insecurities or insecurities that we have from other other places. We get dopamine hits from the objects we buy that we make mean something about us, such as clothing, like I said, cars house, we, we feel a sense of pride, right? Like, oh my God, look at my car, it’s so awesome. And we also soothe ourselves soothe our emotions, by consuming food and going shopping. And we do this in small ways, like we, you know, we, we tell ourselves, we deserve something or you deserve a break, like you’ve been working so hard, right? And so we sued our burnout, we sued our tiredness by consuming whether it’s food, or, you know, items, things. And so part of changing your habit is adopting a savings identity and getting dopamine hits, from watching your savings and assets grow. And I’m happy to say that that is the truth for me, I, you know, I don’t mind spending money, but I don’t get the thrill out of it that I used to, I feel like now it’s like, when I see my crypto gains going up, I’m just like, Whoa, I get cold chills, I start to like, I start to cry out of joy. You know, see my investments go up, it was really like where I get my like, reward my all my reward chemistry. So, regardless of how much money you make, right, if you’re listening to this, and you’re saying, Well, I don’t really make a lot of money like, well,
Speaker 1 17:00
I want to tell you, you need to have a financial focus and a savings goal, regardless of how much money you make. And, of course, I’m wanting to take into account the fact that, you know, what, our our income hasn’t really gone up with inflation, right, so we’re seeing that all of the money that we make, is having to go to food, the basics, right? Food, shelter, clothing, right, all of those things, I still believe that you can set a few dollars aside a day, right, which adds up in a month to maybe $50. Or maybe it’s $100. For you, I want you to have a savings goal anyway, when you don’t have a savings goal, you live paycheck to paycheck, regardless of how many you how much money you make, and you will see your consumption increase as your income increases, right, like so let’s say you’re in a position right now, where you’re not making a lot of money. But you, when you don’t have a savings goal, even when you make more money, that money will be spent, you will not save it. And, you know, just speaking, looking, looking at things from up from a cultural lens, right, always trying to pan back a little bit and not make this sort of an individual problem or issue. The average American spends or saves, saves 10% of their monthly salary. But other cultures, such as Japan and Germany, they save 25% of their income, their monthly salary, which is considered excellent, right? 1/4 They put it away. And so maybe you don’t make a lot of money right now. So 25% Feels like a lot and it might be right. Whatever percentage it is, think of it. Like whether it’s just it, whether it continues to be 10% for you think of it as paying yourself in the future. Don’t think of it as deprivation, think of it as paying yourself in the future. When you set aside that 25% of your income. It’s like eating off of a smaller plate. Right. So let’s say you have a huge plate and you when you have a huge plate to serve yourself with you will fill it up with food and you will likely consume everything that’s on your plate right because we are also conditioned to clean our plates. However, if you have a smaller plate to start with, and you fill that up, you will you will finish it right because you’re part of the clean plate Clums I’m assuming just as I was and then you will feel satiated versus overstuffed with the bigger plate. So setting aside that 25% is like serving your yourself from a smaller plate. That 25% You took off the top that you paid yourself with. That money never hits your bank account so it’s not available for you Due to spend, it’s not available for you to like us on the everyday like food and stuff like that, you will be surprised at how you make do with less and still feel satisfied with it. And again, if you don’t feel satisfied with that smaller plate, then you want to look at where the deprivation is coming from, like, maybe it’s an attachment thing and not a money thing. Right? That’s there’s a possibility there. So I want to say again, this needs repetition, this whole narrative around, I deserve this, I work hard for this. Spending on yourself has a shadow side, you are deserving of savings as well. Right? It’s not just deserving of spending on yourself, but you are deserving of savings as well. So people who build wealth secret, people who build wealth, don’t change their lifestyle for a really long time, even as they’re making money. Okay. So this is part of learning to delay gratification. I like to think of it as extending your orgasm, right, you don’t need to come right away, you can extend your orgasm, you can like delay gratification, you can like, extend that a little bit. So don’t buy new cars, buy used or leased vehicle. Stop buying meals on credit. Stop spending, plug leaks in your expenses, for example, your subscriptions, track your spending, like if you have an app that you track your spending with do that if you need to really look at your spending habits. In other words, like those subscriptions that you have, like there’s a lot of things that you subscribe to, and it’s just like, Oh, it’s just a few dollars here and there. But again, it adds up. And you want to, you know, there’s various apps that you can use to track I mean, you can track just with an Excel sheet, you don’t need to get really fancy about it or, or, you know, tech geeky about it. But you can if you want to if it works for you. And you want to have three to six months of emergency fund for unexpected expenses, unexpected expenses will always come up, expect them expect the unexpected. So you want to have three to six months, how do you figure that out? What are your monthly expenses, you want to have that calculated, then you want to times that times three and times six, whether it takes you a year to get to working up to three months of expenses, whatever, or maybe it takes you three years, the thing is that you want to be working towards having it right. So if it takes 50 or $100 a month to get that savings up, let that just be what it is, but do be working towards it. And when it comes to investing, you can’t build wealth without investing. And the reason for that is because you need to outpace inflation, which is currently as you know, at 3%. When you invest, you want to be diversified based on how your money is growing, right? Maybe you have a fixed strategy. Maybe you have something in the stock market and mutual funds, things like that. And maybe you have an indexed strategy, right, where you have access to gains. But you also have protection against market losses. So you want to be sitting down with someone and really talking about where you want to invest your money. You want to decide how much risk you’re willing to, you know, take on based on your age and your financial goals. Yeah, those are all things that you want to bring to your financial planner advisor professional, to guide you through the process, right to make it truly individualized. And I want to also address multiple income streams. I think it’s super important, especially as a way to recession proof your cash flow to have multiple income streams in case one starts to like, get a little thin, you have something coming in from somewhere else. And our economy indeed feels like it’s in a vulnerable place. And it doesn’t make sense to rely on a paycheck as your sole means of income, whether it’s a paycheck from your work as an employee, or your income as an entrepreneur. It just doesn’t make sense to me. So, you know, I often think of like celebrities who have you know, actors let’s say or musicians who’ve come out with clothing lines who’ve come out with perfumes and beauty products as supplemental means of income, where they weren’t getting as many acting gigs or when, you know, they weren’t hitting the Billboard Top 20, or whatever it is, you know, I want you to think of yourself that way, too, is really thinking about, you know, maybe it’s getting a side hustle, maybe it’s opening a second business. You know, I want you to be creative about how money can come in, and not necessarily think like, Oh, you have to get another employee job or something like that, where you have to toil. But think about like, what can be creative and fun, right. And one thing you may not know is that the average millionaire has seven income streams. One is dividends earned from stocks owned, she has earned income from a paycheck. Three is rental income from rental real estate, royalties from selling REITs, using something they’ve written or created. Five is capital gains from selling appreciated assets, six is profits from businesses they own. And seven is interest from saving CDs, bonds and other other investments, there are other savings. So you know, so the multiple streams you’ve got going on, or that you decide to, like open up to, they don’t necessarily have to be these yours don’t need to, you know, mine aren’t like these, yours don’t need to be like those either. This is just an example of the different possibilities. But you do want to create multiple tributaries that contribute to your river to contribute to the flow, cash flow, income flow into your life into your home, that will then allow you to do, you know, to be creative, and to have fun and to experience life and to do the things that you that you want to do.
Speaker 1 27:01
So, I don’t know, these were eight habits, but I just gave an arbitrary number because I love people I know people love a list. But it didn’t necessarily come out, like Alyssa came out more like, let’s focus on these things for 2024. Let’s really like, you know, let’s really sort of pull in the rains with how you’ve been spending and how you’ve been thinking of yourself as a consumer, and really get into creator and empower you to sit down with someone if you need to sit down with with someone, or really sort of like, stop this whole avoidance around money and really begin to think of it as an act of self love. So I’m hoping that you take on my invitation, and put some of these things in place. And like I said, don’t hesitate to reach out to me over social media. Or you can click the click the link in the show notes so that you can book a financial strategy session with me. So and again, those are free, fill out a form, we’ll you’ll match up with somebody from our team. So just take advantage of it. It’s available and it really will change your game in 2024 and beyond. All right. Take care. Bye. Thank you for listening to today’s episode. Remember to hit the subscribe button to get notified of new episodes dropping on the new and full moons of each month. And if you haven’t already, leave us a five star review on iTunes to make sure that everyone who needs this transmission receives it. Until the next episode I’m sending you fierce fierce love.