So we're 17 days into a new year, hopefully you've refreshed your list of goals by this point. Most goals require at least SOME money to accomplish, and money is one of the biggest barriers we have to accomplishing all our goals. Here's a fun and revealing exercise that will help you sell stuff you don't need, in order to accelerate you towards your goals and pay for the new things and experiences you desire.
First, think of the next financial goal you want to accomplish. Is it, becoming debt free? replacing a car? going on a trip? putting a down payment on a home? Want to follow my 2011 investment guide and buy some silver, guns, and nickels but don't have a lot of cash? Think of your most pressing short-term goal, that would make you the happiest by accomplishing it... and let that thought motivate you while we do this exercise. I'll now guide you step by step through Clint's patented "FIRE SALE" system:
Step 1) Visualize the goal. Write it down on a piece of paper, include a picture if you can, and include a dollar amount needed to accomplish this financial goal.
Step 2) Imagine you lost everything you own to a fire. Your home, cars, possessions, everything you own was consumed 100% in the blaze. You now have only the clothes on your back and the contents of your pockets. There's good news though, nobody was hurt, and you were fully insured. Also, you had recently catalogued all your possessions to your insurance company, so you are given an exact 100% replacement cost check to replace everything you own. How you spend the insurance money is up to you.
Step 3) Now, with these thoughts in mind, go through your home room by room, including garage, attic, closets, basement, etc... and ask yourself, would I spend that insurance money to replace this individual item? Or would I let it stay in the ashes, and use the money towards the goal I have in my mind from Step 1?
Step 4) Everything you own needs to have a decision made about it. It can only fall into one of four categories:
CATEGORY 1) I would definitely replace this item with the insurance money. I really need it, like it, and use it.
CATEGORY 2) I wouldn't buy this item today, as I don't really need it. Anything you haven't used in the last 12 months, or forgot you had, definitely put in this category. When in doubt, put it in this category.
CATEGORY 3) This item is irreplaceable, and it would break my heart if I lost it.
CATEGORY 4) This item is irreplaceable, but I wouldn't really miss it much.
Step 5) Gather EVERYTHING from Categories 2 and 4 in one huge pile, and GET RID OF IT! If it has any value, sell it (Craigslist, Ebay, etc...), and put that money towards your Step 1 goal. If it has no monetary value, but would be useful for the less fortunate, give it to the less fortunate (Goodwill, Church, Charities, etc...). If it has perceived family sentimental value, offer it to your family members, and if they won't take it or don't want it, get rid of it. If it has no value to you or anyone else, then just simply throw it away. Seriously, throw it away.
Step 6) Think of ways to better protect your category 3 items that are both meaningful, and irreplaceable. Invest in a good fire-proof safe, safe deposit box, or make multiple digital copies to keep in multiple locations to protect it from theft, fire, flood, etc... If insurance money can't replace it, make sure you take extra steps. Also, take time to review your insurance policies during this activity to make sure you do have adequate coverage for what CAN be replaced.
If you do this about once per year, you will be AMAZED how much money you will find, how much cleaner your house will be, and how you will keep a much better perspective about what really matters when you buy new things. Also, we all grow and evolve over the years, so don't be surprised when things that used to matter to you don't matter any more or vice versa. Start fresh each time and honestly evaluate each item in the present moment, don't just use last year's results as your baseline.
If any of you that read this decide to give this a try, please post a comment about your results, I'd love to hear about your experience! Godspeed and God bless!
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