Students of personal finance are slowly waking up to the fact that financial freedom is predictable and achievable, if one has the right attitude, the right knowledge, and a winning plan and pursues that plan consistently. Earnings, regular savings, and investing are the keywords that define financial freedom. Here are five more obstacles to financial freedom:-

1. Lack of a Winner Mentality: this is one of the greatest obstacle and is acquired early in life. Majority of human beings are born into poor households in which high ambition is resented and even discouraged. The term “filth rich’ was coined by the poor and middle class to voice this resentment. Religious teaching has not made the situation any better – but worse.

Christianity is the worst affected, where (except in some modern evangelical churches) poverty is seen as a virtue! Sometimes man must learn from nature. Looking at the tree canopy in the Amazon forest one gets the picture of competition where every tree is struggling to grow taller for more sunshine.

Look at wildlife and again you witness the same spirit where every animal is striving to win against all odds. In this world, human beings are the only creatures that exhibit attitudes of complacency, laziness and even suicidal lifestyles. Instead of learning to earn, they idle; instead of saving and investing, they consume everything.

A change of attitude is attainable with simple effort, through study counseling and keeping to the right company of progressive friends. Its easy to form a habit of reading, viewing and listening to quality carefully selected materials. Much of what appears on our TV sets, Radio and DVDs is trash and wont help you but waste your precious time and concentration.

Keep the right company. It is a well known fact that if you walk with thieves, eventually you become one. Similarly if you keep company of financially successful people you can’t help but become like them. Some people believe in luck; hence the emergency of commercial lotteries everywhere. The best definition of luck is Laboring Under Correct Knowledge.

2. Lack of a savings culture. The primary infallible formula for financial freedom is :-

a. Earn

b. Save

c. Invest

d. Give

Anyone can earn, but it takes financial intelligence to take steps 2-4. A rule of the thump is to save 10% or more (not less) of all earnings regularly without failure.

There are many who save admirably; but then end up losing everything due to lack of knowledge in choosing opportunities. About eighty per cent of the opportunities that come to us every day are scam, or unsuited to our particular needs. One requires the ability to evaluate risk and reward, and shun all but what is in line with one’s individual financial plan. Forget the glamor, the glitter and the hype; get financially literate on how to invest.

3 Ignorance about investing. The number of searches on “how to invest” at Google is staggering (about 5milion hits monthly). Most people have no idea what investing is all about. And you really can’t blame them. The education system has left a gaping void on that subject. Whether by chance or design, most people leave college with big ideas on how to earn lots of money, but no idea how to invest it. When it comes to investing, there are three major asset classes:

• Business

• Real estate

• Paper assets (such as bonds, mutual funds and stocks).

The choice of what asset class to invest in is crucial. A lot depends on each individual gifting, preferences, background, etc. none is superior to the others and one can find financial freedom by investing in any or all of them.

4 Ignorance about tax laws. Tax laws in every country are made by rich, wealthy legislators. Many loopholes are usually available in these laws to the rich or to the financially literate mind. For example the rich know that the choice of business entity means everything. While the poor and middle class love investing individually, or in partnerships, the rich invest as corporations, e.g. Abc Ltd co (UK) or Xyz Inc (US). A corporation is a clone of you. For example when it comes to taxes it works like this:-

INDIVIDUAL CORPORATION

Earn Earn

Taxed Spend

Spend Taxed

A corporation is allowed until the end of its financial year to do its tax returns. Besides, there are more tax deductible expenses allowed a corporation that are not available to the individual or partnership.

Thus we see, realizing financial freedom is not a walk in the park. One must cultivate a winning attitude, accept to spend both time and money in pursuit of knowledge, and stick to the plan. The plan is the road map.