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Time and Money-great thoughts by Dr. Lloyd Watts

What if I told you I had just read a little book that tells you how to transition from Middle Class to Financially Independent? I’ve talked on this blog before about Robert Kiyosaki and Donald Trump’s book, “Why we want you to be Rich,” which postulates that the middle class is disappearing and that these fellows want you to join the ranks of the rich and why you ought to.  I’ve talked about Keith Cameron Smith’s “The top 10 distinctions between Millionaires and the Middle Class, ” where he gives coin sides such as:

  • “…millionaires have multiple sources of income, the middle class has only one or two….”
  • “…millionaires focus on increasing their net worth, the middle class focuses on increasing its paychecks….”

Dr. Lloyd Watts, in his new book, “The Flow of Time and Money…how to create a full and prosperous life,” chimes in on the same theme and goes you one better…he tells you how.

What could be more simple than understanding that the transition from Middle Class to Financially Independent is to:

  • “…Pay Yourself  First, Accumulate Capital, Buy Assets that produce Passive Income, until that Passive Income equals your expenses….” and to do this you:
  • “…find out that changing your flow of money requires effort, self-education, and consistent  daily action toward long-term goals. All of these relate to how you manage your time….”

This is where Dr. Watts’ book diverges from the others in my estimation.  He gives clear and concise diagrams and explanations for the flow of money – how the average middle class person’s income comes in and goes out in expenses – and the flow of time – how the average middle class person’s time is set but goes out in “expenses” related to income.  It actually all makes sense, especially when you look at his simple leaky bucket diagrams.

What I like is that he also shows how altering the flow of time and money can transition you from middle class to financially independent.  Changing the flow of money to include passive income gradually eliminates the need for a job which has a direct impact on the flow of time – what you do with your time.

A theme I find in this book is the idea of leaving a legacy.  He says in his section on The Flow of Life:

  • “…It’s no coincidence that Time and Money have the same structural form…Some people call it Life Energy, or Life…But, if they are really the same thing, how does one get converted into the other? The poor and middle class do it the easy way. They spend their time working for money, and their employer does the conversion for them…We get our 168 hours/week, which is spent sleeping, eating, bathing, watching TV, commuting and working. Our employer pays us for that work, and we spend money on taxes, food, shelter, entertainment and toys. At the end of a life, what do we have to show for it?….”

Dr. Watts is obviously a bit of a philosopher. Although his book is short and to the point, it invites thought and contemplation. He takes us from a discussion of the flow of money and time and how we can transition from middle class to financially independent – and how to get there – but also he concludes with what I call Life Questions:

  • “…there is more to life than just financial success. Other important aspects of a person’s life can include their relationships, health, spirituality, artistic endeavors, community service, contribution to the world, etc. Ultimately, we may ask what kind of a legacy have we left behind….”
  • “…Try asking yourself this question: ‘What is the biggest problem in people’s daily lives that I can meaningfully address?’…Help even one person solve a problem, and you make a difference to that person. If you can generalize your solution method and share it with a lot of people, you will make a contribution to the world….”

I find that this book hits at a good time, given the current global economy and the fact that millions of Baby Boomers are beginning to ask those legacy-type of questions of themselves.  Understanding where we are financially and understanding how that standing effects how we spend our time is valuable information.  Add to that Dr. Watts’ explanation of how to get from middle class to financially independent and what that would do to how we spend our time gives us some ammunition to change our situation.  I’ve always believed that information is key.

If I had to give a negative comment it would be that I see an omission in his list of Sources of Wealth – that of developing passive income through a direct selling or network marketing business. I personally know a few people who are now financially independent because their leaky bucket no longer leaks – their passive income, gained through a direct selling business, is allowing them to explore the world and their part in it.  One man, in particular, is living the legacy he’s leaving.

A thought that just occurred to me – in my parents’ day, their goal was to be middle class.  They wanted nothing more than the comfort of a house, at least the one car, a steady paycheck and food on the table.  Now, we can’t even be sure we can keep the house we have, cars are expensive to keep and maintain, our paychecks are no longer a sure thing and food prices are continually rising.  My goal is to have financial freedom.  What is yours?

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