Two of my most revisited videos on YouTube are the following:
Within these videos, one of the segments is all about why and how to build and own your own infrastructure for complete freedom and clarity in life. Arguably, all the segments are fantastic and worth your time, but I wanted to touch upon this aspect in detail as it was one that personally resonated with me and has set the tone for my personal goals and objectives from 2021 onwards.
Why personal infrastructure matters
Before we dive into the how, I wanted to briefly outline the what and why personal infrastructure matters and to me it comes down to two main things; grit and freedom which, if properly understood and actioned upon, can be utilised to overcome one of biggest stressors in our working lives - fear of change.
"It is not the strongest of the species that survive, nor the most intelligence, but the one most responsive to change." Charles Darwin
Grit can be defined as a personality trait possessed by individuals who demonstrate passion and perseverance toward a goal, despite being confronted by significant obstacles and distractions.
In the context of building and owning our own infrastructure, in general there’s no hard and fast way to get freedom without “earning it” and to “earn it”, there’s two routes - working for yourself (i.e building your own business) or working for others - but each route has the same fundamental principles underpinning them that require a large degree of grit before reaping the rewards later on.
Freedom as an asset
By building and owning your own infrastructure, you’re essentially removing dependance on other infrastructure ‘traps’ such as insurance, car loans, credit cards, overdrafts, mortgages etc. Why are these traps you may ask? Because, once you sign up to these, there’s no alternative unless you pay them back - usually with interest. You are foregoing personal freedom (and capital) by borrowing money to eventually own assets, but having liabilities in between.
It may seem counterintuitive, but by avoiding such traps you’re actually preserving your freedom as you’re avoiding liabilities, both of which are crucial for building and owning your own infrastructure.
As we just touched upon, one of the most significant ideas to grasp when understanding how to own and build your own infrastructure is limiting liabilities. Whether you’re building your own business or working as an employee, there are three broad rules to live by that contribute to limiting liabilities, these are:
- Live below your means
- Save as much money as you can each month
- Build your asset base
Written another way, these three things essentially lead on from one another and can be formulated as follows:
Live below your means → Savings to be invested = Asset base = Freedom
How does grit fit into this you may ask?
Working for yourself vs working for others
As mentioned, it’s still possible to earn your freedom by working for someone else, but arguably it requires a longer time horizon and even greater grit as it’s so easy for “lifestyle creep” to set in as you begin to earn a regular salaried income each month. As we touched upon, most people begin taking on liabilities based on their current income and as we mentioned above, this isn’t something we want to be doing.
The above is not to say the same rules don’t apply when you’re building your own business (i.e working for yourself), but the main difference is that as you begin to build your own business your essentially on the “fast lane” to freedom as most established businesses (unless you’re freelancing or consulting) have a degree of autonomy to them as they should still run (and hopefully make you money), even if you’re not “working”.
Insource your pension
So a question we’ve yet to ask is why should we be building our own infrastructure? And really, alongside providing you with freedom, another essential reason for building and owning your own infrastructure is to solve the problems that most people face when reaching retirement; either not being able to retire or having to downgrade their current lifestyle.
By building up your asset base, you’re ensuring that you can, at the bare minimum, maintain your current lifestyle in retirement. However, ultimately by expanding your asset base and removing liabilities over the course of your lifetime, you’re most likely going to be exponentially improving your lifestyle despite being difficult in the beginning and requiring plenty of grit as mentioned earlier.
These two videos above and the general ethos of “building and owning your own infrastructure” has and will continue to shape my perspective and decision making as we kick-off 2022.
When I originally watched the videos above (and each and every time I revisit them), a lot of things I thought about - working for yourself, investing, owning your own time etc. just clicked into place for me. I’ve found that having this level of clarity, keeping the principles in the video top of mind, has really helped to align my actions and essentially make better financial decisions as I have a clear set of principles in place and I’m a firm believer in the correlation between routine, principles and success.
So with all that said, I hope this article helps to kick start the year and wishing everyone who reads this a productive and blessed new year ahead.