I love strategizing. Maybe it was all those years I spent playing chess with my Grandpa growing up, but there is just something really fun about figuring out all of the possible strategies you can use to accomplish a goal.
For example, take my first “internationalization” goal from yesterday (or better yet, take one of your own goals or borrow mine for a moment):
- Open up a bank account in Singapore or Hong Kong with $50,000 USD by March 31, 2012.
Hmm. Seems pretty straightforward at first (especially if you are not the one who has to do it) 
, but if you’re like me, perhaps when you dive down into it you suddenly find that it’s not quite as simple as you originally thought. Drat!
In fact, there are several challenges I can think of right off the bat with this goal:
- How do you decide between Singapore and Hong Kong?
- How do you find a list of possible banks in each country and their contact information? Do you just google “Singapore bank”? How do you tell if they are reputable, honest, ethical, solvent, etc.?
- How do you determine whether or not they accept US customers? (Many do not)
- How do you find other Americans who have already done this so you don’t have to re-invent the wheel?
- What if you actually have to travel to Singapore or Hong Kong in person to set this up?
- What are the fees associated with the new account, and will it be “worth it” to you to have one?
- What are the reporting requirements associated with having a “foreign” account…will you now be on some sort of crazy “watch-list”?
- What documents do you need to send/bring to open the account?
Hopefully by now you have your own vision for financial independence and your 90-day goals all written down (good for you!), and you are starting to go forth and tackle those goals and get ‘em done! But when you reach the inevitable roadblocks that will pop up along the way, you need some outstanding strategies to help you overcome them and accomplish your goals.
So today, I want to share with you my #1 go-to strategy for tackling my goals:
As Bruce Lee says,
“Simplicity is the key to brilliance. It is not the daily increase but the daily decrease. The height of cultivation always runs to simplicity. In building a statue, the sculptor doesn’t keep adding clay to his subject. Actually, he keeps chiseling away at the inessentials until the truth of its creation is revealed without obstructions. Hack away the unessential.“
or, if you prefer…
KISS… Keep It Simple, Stupid!
(or “Silly” if “Stupid” offends you…)
It’s amazing how we can complicate things so easily without even trying. I do this all the time, and have to continually remind myself to simplify the problem.
Now of course this isn’t the only strategy for success, and we’ll talk about many, many others over the coming weeks (including my next most favorite strategy—ask for help!), but I do have to say that this is absolutely positively THE #1 success strategy for achieving ANY goal. If you can just do this one thing, you will make your life so much easier in all respects.
And wouldn’t you love to live a peaceful, stress-free, zen-like life?
Me, too.
If you consistently implement this strategy, you can.
How much easier would your life be if you snapped your fingers and instantly half of your financial papers were just gone and magically taken care of? Or if your entire financial life were on auto-pilot and more money just “magically” appeared in your accounts each month than went out?
This is the eternal bliss that can be found with “hacking away at the unessential” and simplifying your life, and I fervently hope that you are able to achieve this bliss this year. We can work on it together…it’s an ongoing process for me!
Tomorrow’s article will be short and sweet as I will be attending another interesting “Accredited Investor” presentation (coal company in Mongolia)…I’ll let you know how it goes!
To your financial success,
—Kung Fu Girl
About the Author:
Susan Fujii, aka kungfugirl, is an SEC Accredited Investor who believes that anyone can learn to be financially independent.
Susan has authored 199 posts on Kung Fu Finance, and you can connect with her on Google+.
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{ 5 comments… read them below or add one }
KungFu Girl,
This website is wonderful. I just discovered it yesterday and have read almost all of it. There is nothing like this anywhere else. Your positive attitude, enthusiasm, and honesty are really an inspiration.
Here is a topic request. The crux of the problem is working with or around corporate style 401K’s. A prerequisite for this topic would be to read Bill Butler’s short essay on the similarities to funds paid to Roman slaves under what was called peculium at the time. Link here http://www.lewrockwell.com/butler-b/butler-b11.html The synopsis is that the funds belonged to the slave, but the slave did not have control over the funds.
Topic: “401K Asset or Impediment Toward Financial Independence?”
Situation: Mid career employee having approximately $350K under 401K auspices. Extremely limited flexibility. Only mainstream investment choices available. There are other funds saved outside the IRA available for investing or hedging, but gaining control over the 401K pot would more than double the total funds and surely accelerate the path towards financial independence.
Options:
1. Quit job Friday. Move into same type of job but with a different company on Monday. Gain control over 401K in the process.
2. Quit job. Use 401K funds to invest (along with other funds of course) and hope there is enough income to pay expenses. Very risky.
3. Quit job. Use 401K funds to start or purchase a small business. The disadvantage to this option is that running the business would take away from research time needed in learning how to gain financial independence.
4. Keep job. Stop contributing towards 401K, but leaving balance in place. Use any spare cash after expenses to put towards investments outside 401K.
Note that I am aware of what is called the “self directed” IRA; however, this sort of discussion is beyond the scope of the problem. All corporate style IRAs that I have heard of do not allow you to take your funds out unless you quite working or claim some sort of financial hardship.
Additionally I am aware of the borrow against the 401K option, You can borrow up to 50K, but this is only a small consolation.
-RC
Hi RC!
Thank you so much for your great (and nice) comment! I’m so glad you’re here and are enjoying the site so far.
YES, I totally agree with you…401k’s suck, to put it bluntly.
I actually wrote a 4-part series a few months ago on “Is your 401k Robbing You Blind”? Here are the links:
401k Part 1 (Fees)
401k Part 2 (Trapped Capital)
401k Part 3 (The Tax Man Cometh)
401k Part 4 (Nationalization)
But I am happy to elaborate on any of them and/or write another article, because I didn’t specifically address your options above (for people with a lot of cash trapped in 401k’s now) and I completely agree with you (and with the great article on Lew Rockwell– thanks for the link!).
I get so angry when Wall St. and/or the government try to “dumb down” we citizens. It is almost like there is a conspiracy (and there probably is…) to make us believe that “we are not smart enough” to possibly figure out “all of this complicated financial stuff” ourselves so that we “need” the government and/or Wall St. to “take care of us” because we can’t possibly do it ourselves! Grrrrr…it makes my blood boil!
Anyway, yes, I’m happy to write an article about the options you list above for those with lots of capital in their 401k’s but who are still happily and gainfully employed (so for those who can’t move to a self-directed IRA and gain control that way).
Off the top of my head….yes, it’s a difficult choice! I honestly don’t know of any other way to gain control over your 401k money other than the options you list, but they all come with various drawbacks as you outlined.
Option 1 would work and you could move to a self-directed IRA but that is a really tough choice if you love your job/co-workers/management/salary/benefits/etc.
Option 2 is risky depending on your level of financial knowledge, especially if you are earning a great income and are happy with your job, although you could make a plan to do this within a certain time period (1 year, 2 years, 5 years) and work on nailing your financial education until then so when you leave you are extremely confident that you can maintain your standard of living (it will be no fun if you can’t sleep at night because you are so stressed out!).
Option 3 is also a possibility, but is extremely dependent on your level of business-savvy and desire….do you want to be a business owner? If so, this is actually a great way to achieve financial independence, but it is not for the faint of heart– you DO get lots of tax breaks, but it is also a ton of work and something to investigate *thoroughly* before taking the plunge (actually this is a topic all by itself!).
Option 4 doesn’t solve your problem of the trapped capital inside the 401k, but yes it definitely gives you more money to invest outside of it (but you also lose your current year tax benefits and any employer “match”, so it is very dependent on your personal situation).
It’s a great topic…I’m sorry I don’t have any better answers for you! You really nailed the options above (although I’ll think on it and see if I can come up with anything else, but I think you covered it).
I wish I had a “get out of 401k free” card for you!
Thanks for your great comment, and welcome to Kung Fu Finance!!!
– KFG
RC-
Thanks for asking this question, I have been working for about 8 years and its frustrating with the lack of control and options in my 401k plan too. I really want control but like you said the available options to fully control our money is pretty limited. I am looking forward to hearing what kung fu girl has to say about this.
Brandon
Hi Brandon,
Thanks! I just answered RC above, but yes, it’s a very frustrating situation. 401k’s suck. They really do. I have never ever met a truly wealthy person who when asked, “how did you become wealthy?” or “how did you become financially independent?” answered, “Oh, I just contributed to my 401k!”. Never. (And I live in an area with and happen to know a lot of wealthy people!).
I really agree with the Lew Rockwell article RC posted above…401k’s are “average” products/vehicles created by Wall St. and the government to enrich their pockets; not ours. And corporations gleefully seized the opportunity to provide these “plans” instead of the former defined-benefit plans that used to guarantee you a monthly pension for as long as you lived but were much more expensive for corporations to provide.
Anyway, I don’t mean to rant
but I fully agree…401k’s suck!
But what to do about it is difficult, and highly dependent on your own personal situation, expertise, experience, desires, etc.
I wish I had a better answer for you! There is no easy or “one size fits all” solution. I will think on it and write a post on it though…
Thanks so much for your comment and welcome!!!
– KFG
Dear Kunfugirl, thanks for the strategies . In fact i am going to apply them to get to the next level. Thanks
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