Framework for Financial Success

Framework for Financial Success

This blog post will outline what I like to call a framework for financial success. I am a very visually oriented person and I wanted to create a visual framework that people could follow to create financial success for themselves. I drew this framework up in 2018 and have attempted over time to refine it to where it is today. It is a visual representation that helps categorize where many people are in their personal finances and creates a path to financial success that people can aspire to. The objective of this visual model framework is to help people identify where they are financially today and where they can move towards more quickly and with greater clarity. In this blog post, I will walk you through the model, step by step.

Will this model make you rich? No. Will this model help you understand where you are and help you bridge the gap between the wealth you have and the wealth you know you deserve? Probably.

At my firm, we believe in Aspirational Financial Planning, because financial planning is usually quite dry and therefore lacks the incentive for real change. Aspirational Financial Planning begins with setting goals and objectives that are a stretch. They are goals that if achieved, will make a significant difference in not only your life but those you care about, your community, and perhaps even the world! These goals are worth the challenge and the work that is required to achieve them.

The framework below is not the framework for financial success but a visual representation of the next decade starting with today. It introduces the “hero” concept, and that person is called the Wealthrepreneur. The Wealthrepreneur is someone who has their financial engines firing on all cylinders. They save, invest, budget, minimize taxes, and have a long-term strategy to help themselves and others financially. Their goal is beyond financial freedom, it is to become a Wealthrepreneur so not only are they helping themselves, but they can also help others too.

If we look at the timeline above, we see a progression over the next ten years. The objective is to do proactive Aspirational Planning and execution on one’s financial goals today so that they can become a Wealthrepreneur tomorrow. If we look at the orange and red lines, we see that those who take no action end up with financial insecurity or even worse, disaster. Most of us tend to be reactive but we flatline as seen in yellow and end up little or no better off than we were before because we react to financial situations rather than being proactive. So, the Wealthrepreneuer in the blue and green lines focuses on getting things right today. Putting plans in place so that tomorrow is a better day. And maybe even reaching their goals sooner than expected. We all want to avoid doing nothing and hitting the tipping point where it becomes difficult to change our situation. This model shows that now is the time to get proactive.

The Framework for Financial Success as pictured above starts with four quadrants. On the X-axis is Mindset and on the Y-axis we have Success. In my first blog post in this three-part series, we talked a great deal about how success is often more about mindset than anything else. I like to say you have to get your mind right before you can get your money right. The four quadrants are as follows:

  • Financial Do-It-Yourself-Destructor
  • Average Jane and Joe
  • Complacent Missed-Opportunist
  • Wealthrepreneur®

Basically, the Northeast quadrant is our objective where the Weathrepreneur has a positive mindset and a great deal of success. The three other quadrants have their own sets of issues holding them back.

The Financial Do-It-Yourself-Destructor has the right Mindset but oftentimes doesn’t delegate or get advice on investing and makes many mistakes along the way. Sadly, as we so often see, this individual doesn’t get the success they deserve.

The average Jane and Joe don’t have a positive mindset towards their finances and they frequently make mistakes have FOMO, etc. that will almost always leave them without financial success. The Average Jane and Joe really have difficulties saving and investing because their mindset makes them believe their situation is hopeless and they won’t ever get ahead, so why try?

The complacent Missed-Opportunist is very often the one who can most easily migrate to the Wealthrepreneur and they are the focus of this blogpost. There are numerous people out there who are what I call the Complacent Missed-Opportunists. They already have a good deal of success but haven’t reached their success potential. The time is now for them to shift their mindset and do the work to get their financial engines firing on all cylinders. It doesn’t take much more than they are already doing to see massive change and growth in this area.

Now, let’s add a few more dimensions to the model and we can really see how this model can help people make those stretch goals that I mentioned earlier and maximize their financial potential.

As you can see here, I have added four new dimensions surrounding the model. On the left, we have Scarcity and on the right we have Abundance. At the top, we have Financial Freedom, and at the bottom we have limitations.

As we shift our fixed mindsets from Scarcity to Abundance and we see our success go from limitation we move from left to right and from the bottom to the top right corner. Again, anyone can move up and to the right, however, the Complacent Missed-Opportunist mostly needs a mindset shift from Scarcity to Abundance to get started as they already have Success. I want to emphasize that this move that the Complacent Missed-Opportunist takes needs to be one of a mindset shift and will require the setting of some stretch goals in order to move into the Northeast Wealthrepreneur quadrant.

The other two dimensions are Limitation at the bottom and Financial Freedom at the top. The Complacent Missed-Opportunist must not be held back by Limitation and must aspire to Financial Freedom. That can be helped through Aspirational Financial Planning and developing stretch goals as mentioned in the last paragraph of this post.

The final three dimensions to this model are an overlay that emphasizes how important all these dimensions and variables need to work in concert in order to become a Wealthrepreneur. The final three dimensions are Aspire, Delegate, and Purpose. We will start at the bottom arrow with Purpose.

Having a strong Purpose helps us break our limitations, it feeds our desires to do better and drives us to achieve greater things. Breaking our Limitations is the first step to financial freedom.

Once we have broken our Limitations through Purpose, we can move up to the top of the model and to the dimension of Aspire. As you will note the Aspire arrow is also pointing right in alignment with the Mindset and Abundance dimensions of the model. If one continues to Aspire to do great things financially for their family and community they can migrate from the Complacent Missed-Opportunist to the Wealthrepreneur.

The final dimension is Delegate. It is difficult to become a Wealthrepreneur on your own without help and guidance. You simply must have a small team of advisors on your side in order to make sure you are actually firing on all financial cylinders. There is no substitute for having the right team of advisors on your side while becoming a Wealthrepreneur. Remember the Financial Do-It-Yourself-Destructor in the Southeast quadrant? They had the right attitude but made too many mistakes along the way. At RHS Financial, we have built a virtual collaborative professional network that we call our Flexible Family Office™. It is designed to help budding Wealthreperneurs get the kind of professional financial, estate planning, tax, legal, and coaching advice required to become a Wealthrepenuer without the hefty price tag that comes with having an actual family office.

While I have presented a lot of information here, the model itself is quite simple. The story it tells is a simple one in a visual manner. If you look at the model correctly, all dimensions drive you to the Northeast quadrant. There are numerous steps to becoming a Wealthrepreneur as I have outlined in this three-part blog post series. If you wish to schedule a complimentary 30-minute strategy call with me to discuss your current position on this framework, click here and I will be happy to help. I hope this framework can help you achieve your financial goals and help you become the next Wealthrepreneur.

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Risley Sams

Risley Sams

Risley Sams, CFP®, MBA, CPWA®, is the Founder and President of RHS Financial. He is responsible for the future of the firm and the strategic services that we deliver.