Achieving Financial Freedom And How

What is Financial freedom? Financial Freedom we describe is to have the ability to make life decisions without worrying about financial constraints. It’s the ability to quit the job you despise without worrying about your next paycheck. You will achieve to become a financial independent or having an early retirement. I don’t really like to use the terminology retirement because people tend to view retirement as the last stage of life. It implies old age, having health complication and mental problems. It also implies to be seen as “a long time from now”. The truth is your retirement could come tomorrow if you achieved financial freedom and you don’t have to rely on a job to make ends meet.

I want you to think about for a sec. What is the most valuable asset you can have in your life? Car? House? Money? Personally, I believe that time is the most valuable asset, not money. Money allows us the freedom to spend our time to do however we like to thrive our lives instead of worrying about paying for mortgages, loans for car and so forth. You should seriously think about your answer, and ask your spouse the same question (if you have one). It’s a difficult question to answer because it’s wide open.

How We Can Achieve Financial Freedom

There are not secrets here. Financial freedom is most commonly defined to get to the point where your assets (stocks, bonds, real estate, etc.) produce enough income to cover your baseline expenses.The rule of thumb in retirement planning is to use a 3-4% withdrawal rate or any interest you receive from your investment without depleting the principal. The goal is to primarily consume the dividends, interest, and appreciation.

How do you plan to achieve your financial freedom?

I’ve found that when I asked the question in real life, I’m often met one of two answers.

1. I don’t know (A blank stare)
2. I am saving for retirement

It is understandable that many of people don’t really know how and where to get the resources to achieve financial freedom or probably never thought about becoming one. In fact, many think that they cannot do it unless winning a lottery. Ironically, even if you won a lottery, if you don’t know how to manage your money, the consequence would be the same, broke.

The other way to achieve financial freedom is to become a business owner and creates a system to feed you money while you are sleeping. For example, any business in which employees work for you even you stop working, online marketing business and MLM (Multi-Level-Marketing business) , those are known to be creating passive incomes.

However, those are required having a certain mindset, entrepreneurship. Most people don’t really know how to work for themselves and ended up keeping a job to make ends meet. Truth, people are switching a job one after another with the expectation that they would be successful someday. As Warren Buffett says If you don’t find a way to make money while you sleep, you’ll work till you die. I believe that this is the truth in the society.

Have you seen many business owners taking their time whenever they like for family and vacations? Have you seen people having a good lifestyle? If they become successful, they get to own their time as well. Building a business may not be easy, simply It is not the same as keeping a job, you have to come up with products and marketing to sell. It may require a tremendous amount of investment funds when you start. However, you would have extraordinary potential to earn and create time freedom to work for your schedule. Most people cannot afford to lose a job, although building a business on the side is the first step to having financial freedom.

 

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<Recommended Book>

Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

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