How to Start Over Financially: The Definitive Guide

If you are looking for a cheat sheet on starting over financially, here is the 3-step roadmap covered in this guide:

Mindset: Shift from limiting beliefs to empowering ones to spot new opportunities.

Wealth Equation: Understand that Wealth = Income - Spending.

Action: Increase earning capacity through high-value skill acquisition rather than just cutting coupons.

I have been asked how to get started, from a young person's perspective or a person starting over financially.

"Don’t take advice from someone you wouldn't want to trade places with," says Anthony Vicino.

In other words, don’t take fitness advice from someone who's not a personal trainer, and don’t take financial advice from someone who is broke.

Some common advice I've heard over the years is to invest a few hundred pounds a month in an index fund for approx 40 years, and you will have a lot of money.

It's not to say that this is bad advice, but who wants to wait 40 years before seeing a return on investment? Common advice will get you common results, so this is what I found works when starting fresh, and you will see those results a lot faster.

The Core Concept: What is Wealth?

Before diving into the roadmap, we must define the goal. Wealth is the ratio of what you make and what you spend.

The Simple Calculation:

Income - Expenses = Wealth Accumulation Potential

This is just an example to help you understand that as most people increase their salary as time goes on, they fall into the trap of also increasing their outgoings and spending (lifestyle creep). Understanding how to correctly manage money is one of the hardest things anyone can do, but it is the difference between being in debt and getting on the starting line.

(Recommended Reading: I have read this book 5 times so far and it is the best book I recommend: The Richest Man in Babylon by George S. Clason)

I will be uploading an Excel spreadsheet template and a post on how to track your finances at a later date.[d]

The Roadmap to Starting Over

"You can't change your circumstances, but you can change yourself."

To successfully start over financially, you need to follow a specific order of operations: Beliefs → Thoughts → Actions.

Step 1: Beliefs

There are only two types of beliefs in this world:

Action Item: Write down everything positive about making money. Review this list daily. People who write goals and review them often are 80% more likely to achieve them.

Step 2: Thoughts

Your thoughts are formed from your beliefs. There is an amazing physiological technique you can try to train your mind to start seeing financial opportunities: the Reticular Activating System (RAS).

The mind processes so much information that it puts most of it straight into our unconscious without processing it to save time. However, once you inform your brain what to look for, it spots it everywhere.

The Car Example: When you decide to buy a specific car, you suddenly start seeing that car all over the place. The information is being brought from the back of the mind to the front.

Just like with the car, if you write down every single money-making idea you see or can think of during the day, you will notice that your brain will start to see opportunities everywhere. (Warning: the first few days are hard).

Step 3: Actions (Where It Actually Matters)

The above steps put you in the best direction to become a person who is able to identify opportunity. This mindset is why lottery winners usually lose all their money in 3-7 years, and why self-made millionaires who lose everything when starting over will make it again.

However, none of it matters if you are not taking action every damn day. There are only two ways to make money:

This quote taken out of context sounds strange, but the chapter "Hard work is your best friend" in The Richest Man in Babylon makes the difference.

The most rewarding way to achieve this is simple:

Pick a hard skill that rich people pay for (it's easier getting paid by them than by poor people).

Get good at it by doing it for free for 100 - 150 people.

Get those people to refer you to paying customers.

You will naturally grow and become skilled at something people will pay a high premium for. (Pro Tip: If you have a friend that has that skill, sell their services and ask for a commission).

The alternative way gets quicker short-term results but isn't as powerful: Look at what is available to do at all times (Uber, deliveries, translating online) to increase your baseline cash flow.

This step is a little more complicated. It starts with understanding how banks and the wealthy define what an asset is.

"An asset puts money into your pocket, a liability takes money out of your pocket."

— Rich Dad Poor Dad by Robert Kiyosaki

The Actual Strategy:

Work Hard: No matter what your day job is, work hard at it. Store managers or Area managers can get paid 6 figures and above (even at stores like McDonald's and Asda).

Set a Goal: You can't shoot the target if you don’t know where you are aiming. (Don’t know what you want to do? Figure out how much you are comfortable living on every year and multiply it by 60 years... Now plan to make that in 10 years).

Educate Daily: Instead of listening to music, make your default an audiobook or educational video specific to the problem you are trying to solve. Keep this up for an hour a day. 85% of self-made millionaires read 2 books a month.

Network: Speak to everyone about the topics you want to learn about. Ask questions and help them if you can.

Pick a problem to solve and start doing everything in your power to learn how to solve it. As Elon Musk implies, you get paid in proportion to the difficulty of the problems you solve.

FAQ: Starting Over Financially

How long does it take to start over financially?

While traditional advice suggests 40 years of indexing, using the "High-Value Skill" method described above can significantly shorten this timeline to 3-10 years depending on your aggression and savings rate.

What is the first step when starting fresh?

The first step is mental: auditing your beliefs. If you believe wealth is impossible, you will not see the opportunities right in front of you.

What is the difference between an asset and a liability?

Simply put: Assets put money in your pocket (stocks, rental properties, businesses). Liabilities take money out of your pocket (expensive cars, subscriptions, consumer debt).

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