With a little discipline and
patience, you can make your journey
to abundance and personal fulfillment
a downhill flow instead of
an uphill struggle. The key is to use
the "overflowing buckets" concept
of creating financial independence.
Picture your life as a five-step
stairway, with you standing at the
top and Fulfillment waiting for you
at the bottom. Complete this picture
by placing a large, empty bucket on
each of the five steps and labeling
the buckets from top to bottom:
Survival, Financial Stability, Quality
of Life, Financial Security, Financial
Independence.
Your objective is to fill each
bucket with dollars as you progress
down the stairway, so that when
one bucket overflows, it begins to
fill the next bucket.
The Survival bucket is how you
pay for your basic needs of food and
shelter. Once you've taken care of
these, any extra money flows into
the second bucket, which is
Financial Stability. Financial stability
is the ability to keep solvent in the
event of sudden, unforeseen changes
and emergencies in your life —
insurance against catastrophic loss.
To be financially stable, you must
have an emergency fund in a savings
account equal to a minimum of three
months' income, and preferably six
months' income. You also must have
adequate permanent and transferable
medical insurance that remains
in force, regardless of your employmentstatus, as well as life insurance,
including some whole life, in
addition to term, that accumulates
cash value and has a level premium.
Another critical component of
financial stability is non-cancelable,
individual permanent disability
income insurance, equal to
at least 70 percent of your monthly
pay, but preferably 100 percent.
One of the greatest financial blunders
most people make is to forget
that the possibility of loss of
income resulting from an injury or
illness is much greater than that of
loss of life. Not only are you without
income when you are sick or
injured, you also do need to be
cared for during that period, and
the expenses continue even though
you're not able to work.
When bucket two is filled with
contingency dollars for your financial
stability, you can sit down with
your inner circle and determine
what standard of living will give
you the quality of life you want:
your home, family, education,
recreation, possessions, etc. These
considerations should be budgeted
with a monthly amount of savings,
however small.
If you can fill your Quality of Life
bucket, a little extra discretionary
income will trickle over the lip and
fall into bucket four. This is the
Financial Security bucket. Financial
security is defined as that amount of
assets that will give you the amount
of after-tax income you need to maintainthe standard of living necessary
to have the quality of life you want,
at some predetermined point in the
future, without having to depend
upon day-to-day employment.
Less than 10 percent of
Americans ever fill this bucket.
Your goal is to be in this 10 percent.
It is not based on salary. Many individuals
in the top income brackets
never reach financial security. Many
middle-income Americans do. To
get in the top 10 percent, you need
to put 10 percent of your spendable
income into an appreciating investment
fund every month, just like a
mortgage payment.
The fifth and final bucket is
Financial Independence. This is
achieved when you beat the target
date you set for retirement. The
object of creating personal assets is to
be financially independent of having
to work, while you still have your
health and are still young enough to
enjoy those assets. Many individuals
set their financial security target date
at age 65. Using compound interest
over time, you can beat your target
date and set yourself free.
See your life as a stairway to fulfillment.
Put your dollars in the
right buckets, in the right order.
You'll be amazed at the way cash
flows from bucket to bucket, like a
river down a mountain.
Learn more about Denis Waitley and his many
timeless books and audio programs.