When I was younger, money was a medium to buy stuff. As the years passed, so did my outlook on money. I now see it as a means to continue doing what I love. It’s not a stuff currency, it’s a freedom currency.
Freedom to work on my projects.
Freedom to travel.
Freedom to take the Wednesday off if I feel like it.
Freedom to work until 2 AM and then wake up around lunch the next day.
Freedom to take a week to stay at my parent’s house and work there.
Freedom to write.
Freedom to think.
Freedom to live.
With the change of mindset when it came to money came a change in priorities and what mattered.
Most of the “stuff” I valued before became useless overnight.
Spending money as a currency of freedom became the new default. Using it for anything else became unnecessary spending and waste.
And just like that, my relationship with money instantly changed.
I finally had a clear direction.
Finally understood what I wanted.
I understood, once and for all, what money is.
And, let me tell you, life became much simpler…
The Currency of Dreams
We all have dreams.
Dreams are what keep us going on the day-to-day grind hoping that one day we’ll cross some of them off our bucket list.
To travel to exotic locations.
Start our own business.
Maybe you would like to finish a marathon.
Or write a book and see it published.
Here’s a bold statement: most of our dreams are easy to achieve.
But we deliberately make them complicated, convoluted, hard to reach. It’s much easier to day-dream than to actually pursue our goals.
To change, don’t call it a dream, call it a plan.
If you take money as a freedom currency, you understand that money is what separates you from your dreams (or at least helps you achieve them faster).
Visit the Norwegian fjords? $5000 should do it.
Start our own business? Whatever the number is for you, give yourself a runway of 2 years of living costs.
Run a marathon? Get a coach to help you get there faster.
Publish a book? Write for one hour a day and get a world-class editor to make your words shine. Then, self-publish it.
“If money didn’t exist, would you still chase your dreams?”
If the answer is no, it’s not a dream (and money won’t help you there).
But if you get to yes, then money is the enabler to reach those dreams.
Stop Calling It Money
To change your perception of money, stop calling it money.
Instead, invent your own freedom currency, one that relates to your dream. Create a smaller denomination so it’s easier for your brain to adapt and then start using it everywhere.
If your dream is to travel the world for a year, that’s your freedom currency. You know that you can survive on $10 a day and so that becomes your “freedom currency”. Give it an easy name, like “travel day”.
So now your exchange rate is 10:1, or $10 = 1 travel day.
Now train your brain to adopt this new currency.
Eating out for lunch for 10 bucks? You just spent a travel day that you could have otherwise saved.
Coffee outside? Half a travel day.
The gym you never go to? That’s five travel days per month!
And as you change your perception of money by using your freedom currency instead of the real-world currency, your dream will always be on your brain everytime you spend money.
You’ll start thinking in terms of trade-offs.
Do I really want to eat out or would I rather save two travel days?
Watch a movie out or at home and save a travel day?
Do I even need new clothes or would I rather save for Machu Picchu?
And then you’ll look for ways to get more travel days: getting a second job, or asking for a promotion, or selling what you don’t need.
“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” — James W. Frick
You’ll get hooked on getting more of your freedom currency as you see your dreams closer and closer.
Work fills your pocket. But adventures fill your soul.
The Freedom Currency
But dreams are the short-term projects.
There’s nothing wrong with them, but humans were not created to chase bucket list items.
What we want it to live life on your own terms, to do what we love every single day.
And that’s why the long-term goal is to work because you want to, not because you need to. You are out of the hamster wheel. You choose to work.
“My definition of financial freedom is simple: it is the ability to live the lifestyle you desire without having to work or rely on anyone else for money.” — T. Harv Eker
To make it happen, you need passive income. And you need that passive income to support your lifestyle.
So you invent a new currency, one that helps you achieve financial independence. This is your “get out of jail card”. Let’s call this one “liber” (literally means free in Latin, because we’re that cool).
Whatever the method of passive-income making you choose — index funds, an automated e-commerce store, rent out rooms — the liber helps you get there faster.
And just by calling it something else other than money, you’ll be more compelled to save. You’re not forcing yourself to spend less, you’re saving “libers” to live the life you want.
Trust me, there’s a big difference.
“Some people want it to happen, some people wish it would happen, others make it happen.” — Michael Jordan
Getting More of Your Freedom Currency
The question now becomes:
“How can I make more libers and faster?”
Well, the good news is that our currency works exactly like the dollar (it’s an invented currency anyway). The less you spend or the more you make of it, the bigger your freedom fund grows.
The only change is that you think in terms of libers, not dollars.
- Cancel all of your credit cards. Liber doesn’t use credit
- Use cash by default. Set a weekly limit and withdraw every Sunday. If possible, carry larger bills: you are less likely to spend larger currency denominations than their equivalent value in smaller bills (a cognitive bias called the denomination effect)
- Never buy something on impulse. Compare the price to libers and make the trade-off
- Install the Icebox browser extension to block you from making purchases with the “Buy It Now” button. It keeps track of the items you view so can revisit them later if you still want them
- Go for quality, not quantity. A nice pair of shoes can last years wheres a cheap pair will break easily and cost you more in the long run
- Define a “no spend” day every week. It’s hard to go an entire day without spending money but it will make you more aware of your spending habits
- Always have “Shopping List” note on your phone and add items as they run out. Stick to the list when grocery shopping. Extra hack: go to the supermarket when you are full, like after a meal
- Write all your expenses on Google Sheets. Being aware at all times of the level of your spending influences the decisions you make in the future
- Cancel unused subscriptions and apps you are ok with the limitations of the free version (such as ads or upload limits). Upgrade to yearly plans on the ones you do to save money
- Pay yourself first: create a recurring transfer to a savings account each time you get paid. What remains becomes your monthly budget
- When you get promoted, keep your monthly expenses at the same level as before and default all the additional income to savings
- Match bad habits with savings: for every liber that you spend on something you want to consume less of — such as alcohol — match it with a deposit into savings. Micro-transactions feel less painful
- Place a piggy bank at your entrance. When you get home, put all your coins in it. Don’t underestimate the power of piggy banks: small change adds up fast