Financial Freedom 2

growing and nurturing your money

By taking this course, my projected financial income for next year is already 24% higher! I cannot imagine the value the learnings from this course will generate over the next decade for me. The course changed how I position my work, how I price it, how I negotiate, and how I secure my financial security. I feel agency again in my own financial health. I am working way less this and making more money than last year. Hooray!! - Tania, Palo Alto CA, FF2 alumni

The rich are investors, not spenders. This course continues where Financial Freedom 1 left off, focusing on creating the passive income needed to escape having to work to meet your monthly expenses. The main topics are introductory investing, growing annual income, and the psychology of money. Topics include the basics of how to choose investments that fit your ethics, risk profile, and timescale, how to get paid more for your time, and to how to avoid bad money decision-making.

The Millionaire Next Door describes how Prodigious Accumulators of Wealth spend 8 hours a month studying and examining their investments. Under-Accumulators of Wealth spend an average of 4 hours a month. If you aren't spending this amount of time on your finances since Financial Freedom 1, this is an opportunity to pick back up with other FF1 alumni.

Capitalism creates stress and insecurity in order for it to grow. In FF1, we focused on the consumption side, the ever-constant need for more and status competition. In FF2, we focus on the income side. The gig economy and technology are the flip side of consumerism: capitalism's way of running us down and keeping us in the system. Just as the consumerism draw downs our defense systematically, gig economic and automation batter offense systematically too. In real numbers, the gig economy is lowering pay 20%-30% by the simple fact of not paying benefits. And not just freelancers, it’s everyone, because the gig economy puts pressure on full-time job salaries as well. In short: if you aren’t aware and don’t advocate for yourself, you will be grossly underpaid. 

And how do you earn a higher rate of return on the money you save? If you haven't invested any savings you have since FF1, this is the chance to figure out where to put your money so it grows. Learn about stock market fundamentals, the debates of ethical investing, and how time factors into the strategy of risk and return.

This course is for people who want to nurture and grow their money so that it helps them reach their 25x crossover date faster.

I’m a timid female stereotype who has never really negotiated salary well. This time, I stepped up, asked for the top end of my salary range, negotiated an additional $3k and vacation bonuses. Thanks to you, I’m making $13k more than at my last job. The best part is that I can do freelancing on the side because they don’t make their architects sign a no-moonlighting/non-competition agreement. I have an additional $6k coming in this month. Just rethinking what I’m worth and what my time is worth has changed the game. - Melinda, Portland OR, FF2 alumni

Module 4: Investing Basics

How do you invest? In FF1, you made a goal for how many years it would take to reach financial freedom. The math was based on 6% annual investment growth, after inflation. As you learned in FF1, 7% returns double in 10 years and 3% returns double in 25 years. That's a huge difference in life hours and a subject worthy of your time. If you're not spending time learning how to get that 6%, you are losing those years. 

In Financial Freedom 2, you'll learn the nuts and bolts of aiming for 6% after inflation (8-9% nominal). Module 5 covers topics including:

  • eliminating debt

  • buying real estate

  • setting up brokerage accounts

  • choosing stocks + bonds

  • using retirement accounts

  • the debate about socially responsible investing

  • choosing investment advisors

  • Managing risk and return.

We'll also cover important other topics like avoiding the heavy drag of fees by putting your money into "passive investing" and recognizing the often dirty, underhanded tactics of the financial industry which makes money from people's ignorance or lack of self-determination.

Module 5: Creating More Offense

Again, the only way to increase your savings rate is to widen the spread between your annual income and your annual consumption. For most people, creating more annual income is the greatest opportunity, more than cutting housing, transportation, or grocery costs. Making your labor more valuable has the effect of reaching financial freedom faster and giving you more of your life hours back, critical with a future of increasing job instability and change. You think about how you can create more income each year, gaining an increased sense of self while decreasing stress and worry about your finances. We will discuss

  • How to make your life hours valuable to others

  • The problems with Do What You Love

  • Attitudes, skills, and behaviors you have that can be turned into income while being fulfilling and enriching.

  • Negotiating, i.e. being paid what you're worth

  • Understanding your money setpoint (i.e. your money script about how much is fair for your to earn) and moving it up 

Module 6: Behavioral Economics

Why do seemingly rational people make irrational financial decisions? What triggers the impulse to ignore common sense and act against our self-interest?  The emerging field of behavioral economics studies the predictably irrational financial behavior.  We’ll examine how people fall into common patterns of thinking in how we spend, save, borrow, invest, and waste money.  We’ll also talk about how our family histories play into how we understand and value money. 

  • Seeing how you use framing and mental accounting to make irrational decisions

  • Recognizing status quo bias and statistical illiteracy and improving your decision making.

  • Overcoming the extremely powerful habits of anchoring, confirmation bias, and male overconfidence.     

  • Understanding family histories and the emotional content of money.  

  • Living with the Paradox of Choice and the dissatisfaction of too many options.  

  • Learning the neurobiology of consumption: how companies take advantage of your domamine and seratonin response.

Sneak peek into lesson 5.3 - The Problems with Do What You Love:

  1. Jacobin piece “In the Name of Love

  2. Liz Gilbert on distinguishing between Hobbies, Jobs, Careers, and Vocations

I think it's important to name the fact that the cards are stacked against many of us and that the myth of "work hard and you'll live your dreams" is simply not true. It actually requires us to be very strategic and unhook ourselves from the paradigm to find an escape hatch. - Annie, Los Angeles CA, FF2 alumni