Wanting to be financially free is not all. Everybody can tell whoever will listen that they want to be financial free. But there is a big difference between saying it and actually taking the steps to achieve it.
First of all, what is being financially free? The definition is different for everyone. Some people have big needs and others have very small ones. One person might need 100 000$ a year to be financially free and the next one will only need 30 000$.
Whatever your needs are, you are financially free when your passive income exceeds your expenses. What does that mean exactly? Well, if your investments bring you say 40,000$ a year and you only spend 35,000$, then you are financially free.
It might sound easy when explained simply like this but it’s harder than it looks. A lot of good decisions have to be made to reach that point.
And it all starts with a plan. Without a plan, you’ll never reach your goals. The best way to elaborate a plan is to do it backwards.
Start with the end in mind. Come up with a number you think you need to achieve to reach financial freedom. Then decide on when you’d like to achieve this goal. Do you want to be free by 40 years old? 50 years old? 60 years old? Your strategy will be different depending on your timeline.
Once you’ve decided on your number and timeline, you need to choose which vehicle you are going to choose to get there. Are you going to invest in real estate? Are you going to invest in the stock market? In private businesses maybe? Again it’s up to you to choose and to get the proper education regarding the asset class chosen.
Finally, the last step is to work it backwards. If I am going to reach my final ‘’number’’ in the right amount of years that I’ve determined, how much money do I need to invest per year, per month, per day?
That’s how you come up with a real plan. That’s how you go from simply saying you’re going to reach financial freedom to actually taking the steps to do it.
Determine your end result, come up with a strong plan, and go after it!
Check out my CREDIT 101 online course. It’s a tool that will help you achieve your financial goals a lot quicker. The kind of knowledge you’ll regret not having later on in life if you don’t learn it now.