I met someone recently, quite an inspirational character. He presented this to a small group of us, just verbally, not an image. I created the graph myself, just to demonstrate the picture.
It was a story about a friend of his, a very, very successful individual who used to work for JPMorgan.
They were talking one night late, and the guy from JPM said to him, “You know that your life is easily defined in terms of a graph of three lines?”
My friend said, “Explain”.
He said, "The top line is your ability to earn income”. If you're really good, clever, smart, and work really hard, that line can go up and up if you make the right decisions, understand compounding, and understand a little bit how money works.
The bottom line is the most controllable line of all, though. It's the expenditure line; you are in complete control of your expenditure (past a certain point). You don't have to buy luxury goods, or holidays, or huge houses. You can choose what you buy.
If you're clever, work hard, make the right choices, and probably have a little bit of luck, you'll end up with a massive separation between the two lines; that’s success.
It doesn't matter what the numbers are; it's the separation between the lines. If there's a separation between the lines, then financially, you're safe, you've achieved that situation that I've talked about many times here before, which is ‘independent of finance’. This is not being financially independent. Financial independence is the chase for more and more. Independent of finance is when your separation between income and expenditure means that you can live your day-to-day life without worrying about money.
The most important line, though, is the middle line; it's the only line with a stop point. That's your lifeline.
The only line in the graph that you have no control over is your lifeline when it stops, and therefore, trying to get a separation between the lines as early as possible gives you the best possibility of living in the best way and the line in between.
This is not about being rich, it's about being independent. This is about not working for the ‘man’
The guy from JPM died a year later, young. It clearly had a significant effect on my friend; it had a significant effect on me.
Blog Post Number - 4477