I searched for years to determine what I truly wanted in life. When I discovered it, I also discovered that I needed to be financially free to achieve it. How do I become financially free and what is financial freedom?
I define financial freedom, a.k.a. financial independence, as having enough income to pay for a desired lifestyle without working. Some people want to work and that’s fine and totally acceptable if you can achieve your desired life, lifestyle, and the freedom to enjoy it. Working all the time to generate the income necessary to achieve the desired lifestyle but not being able to enjoy it is a shame. Personally, I would rather earn a sustainable income so I can have the free time to enjoy my life.
How to achieve Financial Freedom?
Some of you heard the term “make your money work for you.” This is true, let me share a few ideas, but perhaps not all would be suited for you.
As mentioned before, the income is directly determined by your desired lifestyle so you’ll need to write your story of how you live your life and what you do with it whether it be travelling, writing novels, helping others, or simply laying on a beach at a tropical location all year long. Reducing your lifestyle while increasing your income also works well.
Now that you wrote out your desired lifestyle with all the money requirements to achieve it, we can now look how to generate that income from non-working sources. Some will need an investment to accomplish hence the term “you need money to make money.” This term only applies to investment income and not necessarily to all scenarios. Exchanging time for money, a.k.a. working, creates money without the need of money to achieve it.
Let’s get to it, shall we? Here is a short list:
• Rental income from a house, a car, equipment, etc.
• Borrow money then lend it out at a higher interest rate
• Run a business and make it self-sufficient
• Get contracts and sub-contract the work
• Investment income such as GIC’s and mutual funds
Look for opportunities to generate passive income. These ideas are from your friendly neighborhood accountant.
Keep it simple!