This article offers brief responses to ten basic money management questions, explaining why the conventional approach does not work and why Passion Saving does.
Basic Money Management Question #1 — How do we know that the conventional approach to money management does not work?
The test of an approach is not how widely it is employed, but what sorts of results it produces. Middle-class workers in today’s industrialized economies possess more spending power than did their counterparts from several decades back. But they save less.
Basic Money Management Question #2– What’s wrong with the conventional approach to money management?
Under the conventional approach, spending is exciting and saving is boring. So most of us naturally are more drawn to spending than to saving.
Basic Money Management Question #3 — Isn’t saving supposed to be boring?
No! The fruit of effective saving is financial freedom. Everybody wants to be more free. Saving should be exciting.
Basic Money Management Question #4–Why then do most people find saving boring?
Because they pursue a saving goal that makes saving boring. When a 35-year old saves to finance an old-age retirement, he does not see any concrete benefit for 30 years. That’s too long. Save for financial freedom goals that enhance your enjoyment of life in a concrete way within the next five years, and you really will save.
Basic Money Management Question #5– What sorts of saving goals are Passion Saving goals?
A Passion Saving goal is a saving goal that gets you excited about the idea of saving. This is something different for every saver. One Passion Saver might save to start her own business. Another Passion Saver might save to be able to stay home with her kids when they are young. Yet another Passion Saver might save to pay off the mortgage early. And yet another Passion Saver might save to retire early.
Basic Money Management Question #6 — Is that all that there is to the Passion Saving concept?
No. The identification of a saving goal that provides strong motivation is the essential first step. It is that step that changes you from a reluctant Sacrifice Saver to a highly effective Passion Saver. There are all sorts of changes in your money management practices that follow from your discovery of how to save effectively.
Basic Money Management Question #7–Can you give some examples of how the Passion Saving approach to money management is different?
Passion Savers don’t feel as dependent on their employers because they are seeking from an early age to become financially independent of a regular corporate paycheck. Passion Savers have a different perspective on investing because they rely on the income streams generated by their investments to free them of the need to work for money. Passion Savers are more impatient to see results from their money management efforts. They demand more from their money, and because their higher level of intensity causes them to plan more effectively, they obtain more.
Basic Money Management Question #8 — Has the Passion Saving concept been tested in the real world?
The book Passion Saving: The Path to Plentiful Free Time and Soul-Satisfying Work has only recently been published in a Community Discussion Edition. But the ideas driving that book were first published in posts that Rob Bennett put to a Motley Fool discussion board in 1999. In the six years since, those ideas have spread to a number of other discussion boards in the Financial Freedom Community, and sparked hundreds of exciting discussions of new ideas on how to save, invest, and advance in one’s career. Thousands of members of the Financial Freedom Community have made quicker progress on attaining financial freedom than many middle-class workers following the conventional Sacrifice Saving approach believe is possible.
Please take a look at this thread from the discussion boards at the Motley Fool site to gain a sense of how Passion Savers view the basic money management question differently than those following the conventional approach.
Basic Money Management Question #9 — Do all Passion Savers adopt the same money practices?
By no means. What makes a Passion Saver a Passion Saver is that he or she has a desire for the benefits of saving as strong as his or her desire for the benefits of spending. Each Passion Saver has his or her own life goals. So each Passion Saver has a unique take on the question of how to manage his or her money effectively. There are as many variations to the Passion Saving approach to money management as there are middle-class workers interested in pursuing this new approach.
Basic Money Management Question #10 — Is Passion Saving only about saving?
No. Passion Saving is a new approach to money management. This new approach affects decisions on how to save, how to invest, how to advance in one’s career, and a host of other money management questions. The new approach is termed “Passion Saving” because it is the fresh take on the saving project that is the defining characteristic of the new and more effective approach.