You have no doubt heard it said, “Money can’t buy happiness.”  And that is true.  I know many unhappy millionaires.  But I know many more unhappy folks whose lack of enough money to feel safe in their daily lives creates its own unhappiness.

The truth is that having enough money cannot assure happiness, but it can assure freedom from many of things that can turn even a happy life into an unhappy one.

It is hard to be happy and joyful if:
you are not sure how you will pay the rent,
or the car payment,
or a trip to the doctor,
or tuition for next semester.

But now I have to tell you the secret most people will not tell you: having a good job is not enough.  That is a dangerous belief to have—and yet it is all around us.

When I apply for a loan to refinance one of my pieces of real estate, the first thing I am asked to provide is a copy of my W-2 (the form you get each year to prove your salary and tax deductions) or a copy of my last two paychecks.

Since I have not worked for a paycheck for over 40 years, it always takes a while before I convince the borrower to look instead at the assets that provide enough income to pay all my loan payments many times over, whether I ever work a day or not.

What the people who write those loan applications don’t realize is that a job is the most vulnerable—almost useless—asset you can have. The only asset that really matters is the skill to make whatever money you need, no matter what.  Even having stocks and bonds and real estate is not as valuable as understanding how money works and how to create it in your life.  You can lose the stocks and bonds and real estate through bad investing or a market collapse (although you never will when you really understand how to use money as a tool), but your skills will always be there as long as you have health and strength to use them.

Don’t misunderstand.  It is important to build tangible wealth because someday all of us will be too old or too ill to use our skills, but without the skill of understanding how to use money as a tool for better living, none of your assets are safe.  However, if you use the job you have to build skills that will survive the loss that job, you are well on your way to the kind of financial security that means you will never have to fear losing a job again.

I have worked for two different very big companies that became insolvent and had to be sold for pennies on the dollar—and with that sale, my job disappeared almost overnight.  Yet the collapse of those employers and my job with it—had almost no impact on my life except to force me to look at new and better opportunities.  Why?  Because the skills I had gained could be translated into other jobs or—in my case—new businesses that created wealth and income without my having to work at all in those businesses.  That leaves me free to pursue other dreams.  And it all starts with the knowledge that knowledge and skills, not a particular job, are what creates financial freedom.  We’ll pursue that thought in the next blog.