How To Achieve Financial Freedom ?
Before We Talk About Financial Freedom, We Must First Talk About Money.
What is wealth?
My definition of wealth comes from Robert Kiyosaki.
"Money is not a measure of how much money you have but how long you can live without working."
In other words, money is a measure of time, not money.Having financial freedom means living infinitely longer without working.
There Are Two Ways To Achieve Financial Independence.
# 1 - Make A Lot Of Money :
So much that you cannot spend it in your life.This is the simplest approach to achieving financial freedom. This is what happens in most people's minds.
The question is
How much is enough ?
How long does it take to make those money?
How much effort is required in the process?
What is the opportunity cost in terms of health, family etc.?
Many people work very hard to make money, only to realize that they have lost their health and family in the process. When they are old with money, it may be too late.
Fortunately there is another way to achieve financial freedom….
# 2 - Make Monthly Passive Income :
Such that your monthly income is more than your monthly expenses, Suppose your total monthly expenses are $ 10,000.
If you can generate passive income of $ 10,000 from businesses, property rentals, stock dividends and / or bond interest, then you have technically achieved financial independence.
This may sound difficult because I have set a high goal of $ 10,000. If you start with a goal of $ 1k monthly passive income, then getting a few hundreds from each of the sources above is not difficult.
If you can get $ 1k of passive income, then getting $ 10k is a matter of increasing time and time.
Like training your body fitness, your financial fitness will improve as you work on it.
Method # 2 is more practical and achievable, and you are more likely to achieve financial independence at an early age.
If you are very quick, you can already see that the equation has two aspects.
One aspect is your monthly expenses. Another is your monthly passive income.
If your house and car are paying in full, you can reduce your monthly expenses by perhaps $ 5000. Then you just need $ 5000 of passive income to achieve financial independence.
But keep in mind that using Method # 2 does not provide any lasting financial freedom.
During an economic crisis, your passive income is likely to decrease significantly, but your expenses are likely to remain the same.
Therefore, it is important to keep reserves and keep your expenses reasonably low.
Also keep in mind that any form of passive income will still require 'work'.
But this 'work' is not an 8 to 5 job, and ideally, it is something you love to do.
I regularly ask myself this question:
"What will I do when I retire?"
If my answer is,
"I'll do what I'm already doing!"
Then I know that I am on the right track!
Build a business around what you are doing and work towards creating your passive income while keeping your expenses reasonably low. Achieving financial freedom is a matter of time...
To Your Success,