The Top 10 Obstacles Keeping You from Financial Freedom



When I was a kid, I saw my parents struggle with money. It was heartbreaking to watch.

My stepfather worked hard, but he always found it difficult to keep money, much less grow wealth.

Everyone around him seemed to be doing better, and they probably were.

Making the mortgage payment was sometimes tough and there were many times we had to cut back on food, just to pay the bills.

I was one of the few kids that had to buy school lunch using special “tokens” that basically signified your parents couldn’t afford to buy you lunch. Even affording gas was an issue for family trips and had to be discussed.

The anxiety about money was always apparent. We were basically living paycheck to paycheck and it always felt like there was never enough. Then there were the constant fights about money.

Today, this situation is becoming all too common for families.

The National Financial Crisis

“I consider income inequality the most dangerous part of what’s going on in the United States.” –Alan Greenspan

It wasn’t just my parents back then. It’s happening to millions of Americans right now.

  • According to an article in CNN Money, 76% of Americans are living paycheck to paycheck.

  • 1 in 3 Americans won’t have enough to retire and many estimates say the numbers might be even worse than this.

  • Household credit card debt in the US is hovering at around $16,000. Credit card debt is back to the level it was right before the 2008 financial crash.

  • Housing is getting more expensive. Many Americans will never be able to buy a home and many will struggle to pay rent.

  • The financial wellbeing of the country has been in decline for some time, but it now appears to be getting worse. The gap between the haves and the have-nots is widening at a faster pace. The Federal Reserve released figures showing that the top 1% of Americans are now 70% wealthier than the bottom 90%.

These numbers are staggering. Clearly we were not alone.

Your Perception of Money Does Matter

“Money itself isn’t lost or made. It’s simply transferred from one perception to another.” — Gordon Gekko

Eventually, my parents divorced, and I watched them start over.

Interestingly, I now got to see them rebuild their lives based on their own worldviews, unobstructed by the other person’s views about money.

Over time, it became apparent that my stepfather and my mother had two very different ways of looking at money.

For my stepfather, money was, at the same time, God and the Devil. It was something he pursued, it gave him comfort, but in the end, it was something he could not possess on his own, and it caused him much pain. To my stepfather, money was something you worked for and it was scarce.

For my mother, money was just a tool. It was a means to an end. She started a business, which as a single mother of two, was a non-trivial amount of work to get going. She grew her business, taught herself how to invest and retired in her 40s, financially free. In her view, money was something that worked for you, and it was abundant.

The contrast in their perceptions about money was stark.

When I would talk to them about money, their views would become evident in the language they used.

I began to realize that their perceptions and certain behavioral traits were the root of their success or failure. These perceptions also affected them in many other areas of their lives.

10 Obstacles to Financial Freedom

My mother’s perceptions made it much easier for her to acquire, keep and grow her money.

I noticed that many others who were financially successful had these same perceptions.

My stepfather on the other hand, was also not alone in his perceptions regarding money, but in his case, it was a hindrance.

I later realized through my coaching business, that many, many people shared his views. These perceptions became obstacles to them making, keeping and growing their money.

In my experience, these are the top 10 obstacles most people face when trying to achieve financial freedom:

1. Most People Don’t Have a Strong Enough “Why”

“There are two great days in a person’s life- the day we are born and the day we discover why.” –William Barclay

People either don’t know what they want out of life, or they are afraid to go get it.

They either have no vision for their life and no goals to go along with it, or their “Why” for doing something isn’t strong enough to take action.

They either don’t feel the need to do anything, or, out of fear, they cut their dreams and “wants” out of their lives.

Financial Freedom is a BIG goal. The want and the why has to be strong.

It’s easy to justify buying your own house, or driving a nice car but for really big goals, you need to think about something bigger than yourself.

  • What about your kids?

  • Your family?

  • Your country?

  • The environment?

  • A global cause?

  • What really drives you?

To want “$1,000,000” is not enough. But if you want $1,000,000 for your kid’s future, your family’s future- for them to live a life you could only dream of, that’s a want that is becoming clearer and more powerful.

Stop settling for what you already have, start dreaming about what you really want and understand why it’s important to you.

2. Most People Don’t Make a Budget

“The budget is not just a collection of numbers, but an expression of our values and aspirations.” –Jacob Lew

There are usually two types of people:

“I don’t need a budget”

Many people believe they don’t need a budget. “I know where my money is going” they say. But with many of our clients, the reality is almost alwaysdifferent.

Honestly, if you aren’t tracking it, you probably don’t really know with any level of accuracy, where your money is going.

“I don’t want to use a budget”

In the other camp, there are people that just don’t want to budget. They feel it cramps their style and limits them.

The problem is, spending needs to be limited.

If a business spent money on everything and anything it wanted, it would go bankrupt. Similarly, if a person spends money on everything and anything they want, they will go bankrupt.

Unfortunately, you’ve probably even seen this happen to many multi-millionaire celebrities and athletes. They spend more than they make without realizing it and before they know it, it’s all gone.

Without tracking your spending, you may be spending too much on things you don’t really want, and too little on the things that really matter.

If you want to know what someone cares about at the moment, look at their calendar and their budget. It’s usually all there.

3. Most People Have a Scarcity Mindset

“No complaint… is more common than that of a scarcity of money.” –Adam Smith

People with a scarcity mindset are of the worldview that there is just not enough in the world. There is not enough of everything to go around, especially money.

The Abundance mindset on the other hand, is a worldview that the pie is large enough for everyone. It also means that you see your life and success in general as being independent of externalities.

In other words, you have enough because you have, you. And your success or failure is dependent on you and you alone. If you give of yourself, so shall you receive. You want others to succeed in a big way and your generosity comes back 10x.

The abundance mindset is a worldview that makes it much easier to achieve success. A mindset of scarcity makes it much more difficult.

Pay attention to the language people use and you will start to notice how they see the world. Is it a world of opportunity or is it every man for himself?

To be successful, you want a mindset of abundance.

4. Most People Don’t Understand Debt

“Rich people use debt to leverage investments and grow cash flows. Poor people use debt to buy things that make rich people richer.” –Grant Cardone

Credit cards are probably our biggest problem, but any debt has the potential to be used incorrectly.

Debt was originally designed to help people and businesses “make” money, buy using it as “leverage”. This is another way the rich get richer.

The wealthy only use debt to make money.

Let’s say a business owner wants to sell more products but he doesn’t have any more cash to invest into the business. He can take out a loan from a bank to make more products to sell.

Once he sells them he will make a profit on top of the interest payments he has to make to the bank each month. This is how a business can grow profits even if they don’t have the cash to invest.

Another example would be for a rental property. Say a rental property you want to buy is selling for $100,000, but you only have $20,000 in cash.

You can take out a mortgage to buy the property. Once a renter is in it and after all the expenses, including the mortgage payment are paid, you have $300/month left over and in your pocket.

The debt, in this case, the mortgage, allowed you to buy the property and start making money today. If you had to save up $100,000, it might be years before you could buy a rental property.

This is how debt is designed to increase returns and make more money.

Unfortunately, today, more people use debt to lose money. This is called “Consumer Debt”.

Instead of saving up money to buy something, people use debt, or credit, in the case of a credit card, to buy it. If you were to pay it off in full when the bill came, you would be fine. But people carry a balance from month to month instead and end up paying a ton of interest payments.

Whatever they buy gets much more expensive.

When you buy something on a credit card and carry the balance from one month to the next, it’s a sure way to lose money and get stuck in debt.

Car loans are the same. Many new cars lose 50% of their value in the first 3 years. When you buy a car with a car loan, you are also paying interest on top of losing all that money.

The wealthy only use debt to “invest” they don’t use debt to “consume”.

Before you go into debt, just ask yourself: “Am I going to make money from this debt?” if not, think real hard about doing it.

Of course, using debt to make money has risk. If you don’t know what you’re doing, the risks can be large. It’s important to get financially educated so you can use debt safely and effectively.

5. Most People Lack Discipline

“Discipline is the bridge between goals and accomplishment.” –Jim Rohn

If you lack discipline, it may not be entirely your fault. The media programs people to think that success happens in a flash.

We don’t see all the countless hours Steve Jobs or Mark Zuckerberg spent slaving away on their businesses before they hit it big.

We don’t see all the failures of our favorite actors, musicians and movie stars. We don’t see the countless others who have failed along the way and never even had a shot. All we see is instant success on a magazine cover.

We think the way massive success happens is almost all luck. It doesn’t matter to our brains if this is far from the truth.

Statistically, real wealth is built over time by disciplined investing and building cash flow.

Most millionaires don’t become millionaires by making a big pile of cash all in one shot. They don’t even become millionaires by saving up a million dollars in the bank.

Most millionaires hit that mark by building up their cash flow and assets to the point where their net worth crosses the million-dollar mark.

A 20 year old who invests $100 a month at a 15% return would have over $3,000,000 by age 60. That is the power of compounding.

When you invest, time is on your side. When you’re in debt, time works against you. To keep time on your side, takes discipline.

Discipline is like a muscle. You need to exercise it. It responds well to even small exercises. Resisting ice cream and soda, consistently getting to the gym, even making your bed in the morning- these all seem rather trivial but the research is there. It works.

Practicing discipline improves your ability to be disciplined.

Remember your Why. Embrace the grind. The road to financial freedom is a journey, not instant gratification. Stay disciplined.

6. Most People Don’t Want to Learn

“Education is what remains after one has forgotten what one has learned in school.” -Albert Einstein

For most of us, school wasn’t “fun”, right? We would have rather been somewhere else. Little did we know that the world was going to change a lot and change really fast.

College degrees are becoming less and less valuable. It’s a bold new economy and one that requires constant education, to prevent being left in the dust.

Not just any old education, but more and more, the new economy requires specialized knowledge.

With money it’s no different. Things are changing fast and if you’re not growing your money, you’re being left behind and taken advantage of.

You need to gain specialized knowledge in the realm of money.

Like it or not, the rules regarding taxes and investing were largely influenced by the wealthy. That’s the system and it’s unlikely to change anytime soon.

We can’t fight it, so we may as well use it. Learn how the system of money works, or you will get abused by it. That’s the bottom line.

“The Rich Get Richer.”

It’s a waste of energy to hate the wealthy. Instead, it makes more sense to learn how to see money the way they see it and to do what they do.

After all, you want to make more money too, right? Why try to reinvent the wheel? Learn what they already know and invest in your education- your Financial Education.

7. Most People Don’t Pay Themselves First

“I think the number one safe haven where people put their money is to invest in yourself first.” –Hill Harper

You might have heard this one before. “Pay yourself first.” This means that you want to make sure you are setting money aside for you, before you give it to someone else.

Most people unfortunately pay themselves last.

You want to be investing 10 -20% of your income before your money goes anywhere else- ideally by direct deposit right out of your paycheck.

This ensures that you’re paying yourself first, before anyone else gets their dirty little hands on your hard earned money.

Most people do the opposite. They pay all their bills, go out to eat, buy gadgets and cars and then they invest with whatever they have left. Often this is…nothing!

It also means investing in yourself. Education can sometimes cost money, but the return can be huge. Learning new knowledge and skills is almost always the best investment you can make. The dividends never stop.

Paying yourself last is a sure way to come in last. Paying yourself first is how people build wealth.

8. Most People Don’t Examine Their Relationships

“You are the average of the five people you spend the most time with.” –Jim Rohn

Your 5 closest friends

Your 5 closest friends are your future. You might have heard this before somewhere. But what does it really mean?
 Our parents always told us not to hang out with the wrong crowd because they worried about us getting into trouble.
 As you get older, hanging around the wrong crowd can still get you into trouble; it’s just a different kind of trouble.

Sometimes the people we believe to be our friends are anything but. 
 The right friends believe in you, build you up, challenge and push you to success and give you energy. They talk about big ideas and fill your brain with knowledge you can use to reach your goals.
 The wrong friends don’t like to see you too successful. They might feel that it makes them look inferior somehow. They don’t really challenge you or help you reach your goals. It’s all about the status quo with them.
 The wrong friends also don’t give you energy. Instead, these people are often like vampires, sucking the life out of you. They don’t talk about interesting ideas and opportunities. Instead, they talk about people- usually gossip or negativity.

You want to hang around people that will help you get where you want to go. In doing so, they are helping you become a better person than you were yesterday. That’s huge.

9. Most People Aren’t Willing to Take Risks

“The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” –Mark Zuckerberg

Taking risks can be scary. It often feels like you are taking the biggest risks when you don’t know something or when you don’t have all the information.

As Warren Buffett says:

“Risk comes from not knowing what you’re doing.”

Understand that to make money, you need to take on some risk. If you invest in US Treasury Bonds or a bank CD, you will get a return of around 1–2%. The reason your return is so low, is because there is almost no risk at all.

There would have to be something catastrophic happening for you to lose money in a CD or a Treasury bond. Or at least that’s what many people believe.

While it’s difficult for CDs and treasuries to fail, you are actually taking a risk by investing in them. Over time, it can be a very large risk and cost you a lot of money.

The problem is Inflation.

Inflation is when the value of the dollar drops and the price of everything you buy goes up. Think about it. House prices, rent, movie tickets, food, its all getting more and more expensive- that’s inflation.

Inflation goes up at a rate of around 3–5% per year. This means that the value of your money is going down at a rate of around 3–5% per year.

$1 buys less and less each year.

So if you are investing at 1% and inflation is running at 3%, you are losing 2% every year. The bank wont mind, they pay you 1% interest and loan out your money at 5%+ and the bank makes 4%, basically for FREE.

Think about that.

If your return doesn’t beat inflation, you would be investing your money, only to lose money every year!

So what’s the solution?

Your money needs to be working harder than inflation.

If you invest your money at a 5% return you might be matching, or beating inflation by a little. If you invest at an 8% return, you are soundly beating inflation- and getting ahead.

But investing means taking risks. Thinking back to that Warren Buffett quote:

“Risk comes from not knowing what you are doing.”

A lot of the risk can be mitigated by knowing what you are doing. In other words, becoming financially educated. The more you know about money, the easier it will be to manage your money and get your money working harder for you.

10. Most People Don’t Understand Cash Flow

“Making more money will not solve your problems if cash flow management is your problem.” –Robert Kiyosaki

Most of the products financial advisors would put your money into don’t increase your cash flow. In other words, they don’t increase your monthly income.

We could all use more money right now. The problem is there are only a few ways to do this.

  • Getting a fat raise at work would be good, but it doesn’t happen all that often and for the most part, it’s completely out of your control- so it’s not a plan.

  • You have something like a 1 in 18,000,000++ chance of winning the lottery, so that’s not a plan either.

  • You could go back to college, get a degree and hope that it would give you a raise or that you could get a better job. But there is no guarantee and you will probably end up in debt.

  • You could start a business. This can be a fantastic way to build real wealth, but there is no guarantee it will be successful (9 out of 10 businesses fail). It also takes a lot of time to start a business outside of your job. This might be time that you don’t have, and you could also end up in debt.

  • You could cut back on spending, and while this can be a good place to start it’s not an end-all strategy. The reason is, there is a limit on how much you can cut back before you run out of things to cut and you’re living under a bridge. Living below your means is smart, but it won’t get you as far as increasing your means.

  • That leaves working more hours or a second job, which, let’s be honest, would be tough.

So how then?

When you invest your money into cash flowing assets, they pay you without you actually doing any work. This is passive income.

With passive income, you’re making money in your sleep, and whether you go to work or not.

Cash Flow Is King

This is how the rich get richer and the middle class can get ahead or even become rich.

Most people don’t understand cash flow and instead spend money on things that decrease their monthly income.

Wealthy people on the other hand, spend money on things that will increasetheir monthly passive income.

Robert Kiyosaki talks at great length about this in his book, Rich Dad Poor Dad.

The poor and middle class spend much of their money on Liabilities. These are things that take money out of your pocket each month.

Gadgets, cars, subscriptions and even your home, could all be considered liabilities. They don’t pay you- they cost you money each month.

The wealthy spend most of their money on Assets. These are things like real estate, or other investments that pay out passive income.

It's not that the wealthy don’t buy any liabilities, it's that they try to buy most their liabilities with the passive income from their assets. They’re basically spending the interest and not touching the principle.

The middle class works very hard to buy liabilities. Eventually, if you are mostly buying liabilities, you will find it harder and harder to get ahead.

With an asset, you might have to work hard in the beginning, but once you get it going, it could end up paying you monthly income for life.

If you are buying liabilities with the passive income from an asset, you aren’t working at all to buy that liability.

This was the stark contrast I noticed with my stepfather versus my mother.

They both worked hard, but the way they spent their money was very different. My mother worked hard to buy assets and my stepfather worked hard and mostly bought liabilities.

My mother found it easier and easier to get ahead. My stepfather found it harder and harder and was eventually struggling financially.


There are several big takeaways from this list. The most obvious one is, you don’t want to be like “most people”!

The wealthy are doing things differently than most of the population, because they think differently from most of the population.

They think differently because they have a different worldview- and thus a different perception about money and how it works. How you think affects what you do. What you do will affect your results.

This leads us to the next big takeaway: Do as the wealthy do.

Making sure you are financially educated, tracking spending, paying yourself first, and spending your money on assets over liabilities, will set you on a path to growing wealth.

The last big takeaway: Question the validity and tangible benefit of your perceptions.

Your perceptions about money and success are often difficult to recognize but it’s worth it to do a little introspection. Do you see a little of yourself in any of these 10 obstacles?

It’s often these perceptions along with other traits that will decide whether you are financially successful or not. Many of the top 10 will also affect other areas of your life.

When you discover a negative perception or other self-limiting behavior, it can pay huge dividends to take action and make a change.

My stepfather didn’t hang on to his perceptions about money because it actually made him money. He clung to those perceptions because in some way, it made him feel safe, secure, and in control. It alleviated his fear, even though the end result was actually a struggle.

People hang on to negative perceptions because they believe it is adding value to their lives. In reality it’s probably because it makes them feel better emotionally in some way.

Instead of allowing emotion to hijack your thought process, ask if your beliefs about money are really providing you with a benefit.

Is the benefit tangible and real? Or is it only emotional?

Make It Happen

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Disclaimer: This article is for educational purposes only and is not a solicitation to buy or sell securities or an offer of personal financial advice. It is offered with the understanding that the author is not engaged in rendering legal, tax, accounting, investment planning, or other professional services. It is suggested you seek out the help of a financial professional before making any investing or personal financial management decisions. The education contained in this article may not be suitable for everyone — use it at your own risk.