If you’ve listened to one of our earlier episodes then you may be familiar with the Core Four. The Core Four is the first step in the Financial Freedom Formula and empowers you to take control of your finances and stay focused on the 3% of assets that produce the results you need to achieve Financial Freedom in 10 years or less.
We consider it to be the first wealth lens you need to look through to gain an accurate understanding of your game plan when moving forward. The Core Four is meant to help you stay laser-focused on the few investments that are actually going to move the needle.
At Cashflow Tactics, we are all about helping you realize that you are your greatest investment. Once you rise up, create value, and invest in your mindset and skillset the natural next step is to wonder where to put your money.
Most people fall back on traditional advice offered by Goldfish Advisors. We believe that the majority of that advice is dangerous and misleading. So where do you go from there? You do the exact opposite of what everyone else is doing and instead, stay focused on the goal of becoming free in ten years or less. And you do that through utilizing the Core Four formula.
“97% of traditional advice is dangerous, misleading, or outright wrong.”- Ryan D. Lee
The “How” of Investing
There are several avenues to direct your investments into that can be lucrative. It doesn’t necessarily matter what you invest in, what makes the difference is how you do it. The method or formula you use to invest is most important. The formula we’ve come up with is based on the idea that financial freedom is achieved through cash flow being greater than expenses.
“It doesn’t matter what you invest in but how you invest.”- Bradley Gibb
The first step in the formula is what we call the Core Four. The money you earn through your job, business, or career is the tool you’ll use to buy your time back. To become free you have to get good at knowing where that money should go. The Core Four helps you allocate where you should be putting your money.
We love using Jimmy’s financial plan to depict how this methodology works. Jimmy is a fiery quickstart in everything he does. When it came to his financial plan, he was running full speed out of the gate. Unfortunately, his pace left him directionless as he didn’t have a clear guideline for where he was headed. This initially caused him to get in way over his head. Jimmy used the Core Four to redirect his focus. It is more than a method but a set of principles to follow.
The Core Four Fundamental Behaviors You Need to Invest
The Core Four formula consists of four elements that you need to increase and decrease to reach your financial goals.
- Increase your control
- Increase your return
- Reduce your risk
- Reduce or eliminate your taxes
Let’s take a look at the first two steps of the Core Four. What exactly does it mean to increase your control and return? To be financially free we need a better rate of return than what you’re getting right now. No matter how many hours you put in, your money just isn’t working hard enough to achieve the outcome you want.
It is essential to increase return. We do that by increasing the amount of control we have over the investment. How do you gain control. By gaining that control through educating yourself on investment strategies, personal development, and becoming more productive.
“You as an investor, do not get paid in proportion to the amount of risk you take. You get paid in proportion to how good you are at eliminating and reducing risk.” – Bradley Gibb
Reducing risk is a lot like taking control. It is imperative to have the education and experience to know what risks are worth taking.
Finally, you need to reduce your taxes. Taxes are your single greatest lifetime expense. Most people don’t investigate what they’re paying. Instead, they just roll over and pay it. Looking at tax codes shouldn’t be this frightful or intimidating thing. In actuality, the tax code is a treasure map. If you can connect the dots within the tax codes then you have a plethora of ways to not pay taxes.
What You Need to do Inside Your Investments
The Core Four wealth lens allows you to focus on the 3% of financial advice that will get you the outcome you’re looking for.
When most people join the Cashflow Tactics community their Core Four score is one. We run a challenge in our Facebook group where we walk you through the principles of becoming financially free in ten years or less. We use a scorecard to help you analyze your investments.
If you are ready to take action then head over to our 5-day challenge. We’ll teach you how to get your score on how you’re doing. Remember, focus is the key to big results!