I like quests. Quest is nothing more then setting a goal and trying to achieve it. And everyone needs goals if they want to develop themselves through the life. But why financial freedom? And what is it?
I define financial freedom as a state when you do not have to worry anymore about survival and basic needs. This means that even if you did nothing whatsoever the bills will be payed, the rent covered and you will still have the money to buy clothes, send your kids to school and go to vacation. Robert Kiyosaki, the author of "Rich dad, Poor dad" series which I heartily recommend, defines financial freedom as having a monthly passive income of two times your average monthly expenses.
One way or the another, achieving financial freedom means not having to work for money anymore. It means you will have all the time to commit to your family and friends, your hobbies and your personal goals. It doesn't mean you should just lie in the bed all day and do nothing (although you would have a luxury of doing that if you want). Human being can not survive without work and the point of achieving financial freedom is to stop doing things you had to and start doing things you enjoy.
Who can achieve financial freedom
Anyone capable of learning it! You will often see on television guys in their thirties or forties, running huge corporations and spending millions of dollars just buying other companies and luxuries you can only dream of. But if you can just freeze the frame of them for a moment, you will see a face of a normal guy, not much different from me and you, and not much more clever or charming then me or you.
What that guy has and we (non-millioners) still don't is a mindset of a millioner, a financial guru embedded in his brain. He knows the ways of money like we know the ways around our homes. He is comfortable with the money, he knows how to make it grow. And like everything else in the life, this is just an another skill. Everything in the world is yet another skill. And skills can be learned.
Flying an airplane might be hard for that guy yet there are many pilots on the world who do it easily just like he knows his way around the money. Flying and investing are just two skills that take similar amount of energy and time to be learned.
So if you can learn how to swim, how to ride a bicycle and how to drive a car you can also learn how to invest money. This is crucial and believing in this is what makes a person successful, just like a child dreaming of becoming a pilot makes him much more likely to become one.
The basic thing you will need is the same like for any other goal. It is faith. Faith in yourself and faith that you can do it. You can not learn skiing if you do not commit yourself to it. And you should not learn it because everyone else is doing it, you should truly believe that is what you want to do. Learning to invest is the same. You will have to fall one or two times in the process but at the end you will become an investor. How good one depends only on how many mountains you climbed and how much time you spent polishing your technique.
Use financial freedom to enjoy yourself and make lives of others more enjoyable
How to achieve financial freedom
The ways are different for everyone. You will need some capital at the beginning that you will gain either by working for someone or some other turn of events. Do not be discouraged if you earn little. Any capital is enough, you do not need to have millions to start with. It is even easier to achieve financial freedom if you are poor. The reason for this is that chances are your expenses are lower too, and it will be easier to achieve the two times passive income. I haven't said what passive income is, and that is simply the income you get without actively working for it. It can be a rent, managed business, royalties, stocks... just to name a few examples.
Second part of the plan is cutting down your unnecessary expenses. Remember, since you need to achieve double your expenses worth of passive income, every dollar you cut down your expenses by is worth two dollars passively earned.
In the next part of the article called Personal Financial Statement I will cover simple tips to start with and introduce financial statements.
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