9 Steps To Financial Freedom - Preface

 9 Steps To Financial Freedom - Preface

Look back over the past fifteen years and the one constant is change. Our personal lives, as well as the world we step out into each day, may bear very little resemblance to where we were, who we were, and what we thought back then. Change isn’t just inevitable, the degree of evolution can at times be breathtaking.

And yet if there is one profound lesson I have learned over these past years, it is that deep down what you want from your life, and what you may be struggling to make of your life, has not changed at all. I didn’t have a cable television show fifteen years ago, nor were you and I able to converse through Twitter. But the same questions I field today on my show, or when you send me a tweet or e-mail that I field on my iPhone and iPad—talk about two very big changes!—are exactly the same questions my clients and I were working through together fifteen years ago when I was a certified financial planner and wrote this book.

To be sure, the investment vehicles or events that propel you to seek out my advice are very different. Back then we were just beginning to get comfortable with mutual funds; now we have next-generation exchange-traded funds. Back then many of you came to me for advice on how best to handle a pension distribution. Today very few of you working in the private sector have a pension; your retirement is instead going to rely on how well (and how much) you manage to save in your 401(k) and IRA accounts. Back then we had yet to experience the Internet bubble and the real estate bubble. And I doubt that any of us could have envisioned fifteen years ago the magnitude of the financial crisis that began in 2008 and will be reverberating through our lives for years to come.

But for all that change, you are still striving for the same elusive goal

that brought so many to The 9 Steps to Financial Freedom all those years ago: You want to stop worrying about money. You want to know deep down in every molecule of your being that you are going to be okay— that you and your loved ones will not be weighed down by the pressure and anxiety of not having enough, or not being in control of  your money.

Those are the very issues that compelled me to first write The 9 Steps to Financial Freedom. And though I have gone on to write eight more books in the intervening years, each of them overflowing with detailed financial advice, it is remarkable how The 9 Steps to Financial Freedom continues to resonate for me, both personally and as the touchstone for all the advice I give today.

What I first introduced to millions of you back in 1997—what was considered so revolutionary at the time—has never been more relevant. To master your money requires first mastering your fears. And then, as now, there is no shortage of ways that your fears are holding you back from achieving financial security. If anything, I think we can agree that many of the events of the past fifteen years have in fact made us even more fearful. That is why I am so glad you have come to discover, or perhaps rediscover, this book. Yes, it is fifteen years old, yet the lessons in these pages are absolutely timeless and incredibly timely. And rest assured, the version you have before you has been updated to include the latest financial data and regulations in effect as of 2012.

It is so very interesting to me that the field of behavioral finance has become so popular and respected in the years since The 9 Steps to Financial Freedom was first published. When I wrote this book there were some people who thought I was a bit out there to suggest that our emotions play a central role in how we handle money. Now we are so appreciative of the work behavioral economists have shared with us, helping us to understand exactly how our emotions—many of them fear- driven—can cause us to make improper or costly financial decisions. The emotional component to financial planning has certainly gone mainstream since The 9 Steps to Financial Freedom was first published.

But why is it that what I shared and taught years ago still needs to be learned today? For all the people who have come to me with stories of great triumph and success in taking control of their money, I am all too aware that many still struggle. I think part of the problem is that what transpired over the past fifteen years made it excruciatingly hard for many of you to figure out the right and honest path. In fact, so many products and the ethos of the time practically goaded you into making wrong choices. Why live within your means when there was a seemingly endless supply of credit cards willing to offer you ever-bigger credit limits? Why save for tomorrow, when you could take out a home equity line of credit today to pay for anything your heart desired? Why save more from every paycheck when you figured you could save less because big market gains would do the hard work? Maybe some of you remember that the average annualized return for the S&P 500 in the decade of the ’90s was 18 percent, nearly double the long-term historical rate of return. But so many people just assumed that 18 percent was what they could count on going forward. Only to watch the same benchmark stock index basically gain close to nothing in the first ten years of the twenty-first century. And who needed to save up for a home down payment when there was an all-too-eager lender ready to give you a mortgage with no down payment, nor any responsible consideration of whether you had sufficient income and savings to honestly afford the mortgage payments?

Lots of bad choices, lots of bad temptations. And thus, not surprisingly, still lots of fear. Maybe even more than in 1997.

But that’s why I am so excited you have this book in front of you right now. Often we need to be scared to take action. And if you are here because you are scared or fearful or just frustrated that your financial life—and therefore all aspects of your life—are not as you wish they were, the nine steps that I share with you are the foundation of everything you ever need to “learn” to become more financially secure. Dig deep to explore the emotional underpinnings of how you treat money, how you think about money, how you save money, and, yes, how you spend money, and you will unravel the mysteries of why you are holding yourself back. Yes, you.

There is no question the past fifteen years have been very challenging

—poor stock market returns, a few too many bubbles, and then the financial crisis. But please listen to me: There will always be challenges. We don’t know what will go wrong next, but we have to be  smart enough to recognize that bad things will indeed happen. That is not meant to be depressing. Anything but. For when you can accept the inevitability of there being downs along with ups, you become more willing to prepare yourself for being able to best weather the next down. And the one after that. And the one after that.

The nine steps are what will help you move forward toward a life where you can once and for all stop worrying. There is so much advice available on how to invest and save, but none of that advice is worth anything if you don’t first start by facing and overcoming the very fears that are impacting your financial life.

If you are ready to take that journey, I will be right by your side. The nine steps will not in themselves transform your life. Rather, they will give you the insights and tools that will help you take the actions that will allow you to achieve true financial freedom. Freedom from worry.

I applaud you for being ready to take the next step into that better life.

 

SUZE

January 2012

 

 

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