5 Steps For Achieving Financial Freedom

2 years ago, I set a hefty goal for myself. The goal was very simple. I wanted to be financially free before my 25th birthday.

Everyone has their own definition of financial freedom. My definition again was very simple. I wanted to live a comfortable life where money wasn’t an object in any of my purchasing decisions.

Saying I’m going to achieve financial freedom is one thing, but doing it is a lot harder. I knew I had to strategize and create a plan if I wanted to fulfill my goal. I decided to find help.

I started talking to other wealthy individuals who were able to achieve financial freedom at a young age. I asked them simple questions such as what strategies they used and what they would recommend to me.

In this article, I share 5 strategies for achieving financial freedom:

Step 1: Create Passivity 

When I first set this goal, I had absolutely no passive income. I was working my ass off every month making sure I had enough money for the month after. Ironically, everyone I spoke to told me the same thing.

They said that I had to create a source of passive income that would take care of me each month without taking up too much of my time. I came up with a number (the amount of money I needed each month to live/survive) and set that as my goal.

Once I had that number, I knew what the minimum amount of passive income I had to be generating. After that, I had to work on increasing my passive income up to that number for the next few months. Remember, time is the most valuable commodity you have!

Step 2: Build The Big One 

Once you’re able to meet your bare minimum needs on a monthly basis, it’s time to shoot for the stars. In the world we live in today, $1 million is probably not enough for you to achieve financial independence for the rest of your life.

That number has increased due to inflation and a number of other things. The second step is to work on a project that has large potential. For me, it was working on my startup companies that I believe can be worth millions of dollars in the next few years.

When you’re minimum expenses are paid off each month, you can focus on the big project without having to take cash out of the project. Find something you’re passionate about and look for a large market before diving into it!

Step 3: Be Frugal

Just because you have a lot of money doesn’t mean you should be spending it. I agree, it’s very tempting to take your wads of cash and buy random things, but I highly recommend that you don’t.

When a little bit of money starts coming your way, think of better ways to spend it. Don’t let the riches get to your head because a lifetime of financial freedom is a lot better than a couple of toys.

Step 4: Invest

I quickly learned from wealthy people that investing in life is a must. Before meeting them, my money would sit in the bank account earning pennies of interest every year. They taught me a very valuable rule about investing.

Investments all come with a risk. You have to assume that 2 investments will succeed while 8 will fail. However, those 2 investments will pay off to cover your losses from the other investments while garnering you a nice return.

Instead of letting your money sit in the bank. Put your money where it can do some work for you. Just make sure you’re not trading off too much time when you do invest. You’re investments should be as passive as they can get!

Step 5: Give Back

Do not give back for the sole reason of getting something in return. Genuinely give back to the world the best way you know how. You don’t have to donate thousands of dollars, you can do a lot of other things.

I give back by helping other entrepreneurs and giving back to the entrepreneurial community as much as I can. Everyone has something that they can do to make the world a better place.

Money is great, but there are more valuable things in life. Just remember that you can always get more money, but there are certain things that can be lost forever.

Conclusion

In this article, I shared my 5 steps for achieving financial freedom. I’m not close to where I need to be by 25, but I can proudly say that I’m working towards it every single day.

photo credit: Benoit cars via photopin cc