What Does It Mean To Be Financially Free
Financial Freedom
To most people this is not a term that they are familiar with. Maybe the first time you heard it was on Jay-Z’s 4:44 album. If so, you really did get $1 million dollars with of game for $9.99. Or if you’re like me, you just signed up for the free trial of Tidal.
Either way, I’m glad that it is part of the conversation because I think it is a very important for you to understand. If you understand the ideas behind it and follow them, it can have a huge impact on your life.
The Basics
When people talk about being financially free, that means something different for everyone. The basic meaning is for you to earn enough money to live on without the need for full-time employment, ideally well before typical retirement age. One characteristic usually associated with financial freedom is being able to live anywhere while still earning a living. Obviously, there are huge benefits associated with this kind of freedom.
The question is how to accomplish this level of income.
The How
There are a couple of ways you can accomplish Financial Freedom. The first way is to acquire assets that will generate cash flow on a monthly basis. The second is to start your own business that replaces the income from your full-time job.
Let’s think about that first one. When we’re talking about assets, it’s not good enough to just consider the things that we own that have value. These items would have to be able to generate income for you. The house you live in, your 401K, your car, none of these are true assets.
So if you are hoping to make $5K consistently per month, you would need $750K of assets generating an 8% return to accomplish this.
Now, if you’re like me, you don’t have a spare 3/4 Million sitting around collecting dust. To save that kind of money out of your current income would take you until retirement age, except in extreme cases. So what do you do?
You should look to the second way.
By far, the fastest way to earn a substantial and lasting income is to start your own business. So, you’re probably thinking, ‘this is nothing new’, ‘I’ve heard this all before’…and that is true. However, I’m not talking about the traditional business model. Starting a virtual business will allow you to start with very little money and no additional employees.
With a business model where you sell a product with no cost to produce, getting a return on investment larger than 8%, 100% or even 1,000% isn’t out of the question.
When you think about the most successful companies over the past 10 years, most of them are digital companies. The ability to deliver your product digitally is very beneficial. You can grow your business quickly and globally through the Internet. It doesn’t cost Netflix any money to sign up additional customers. There is nothing to produce.
With the ability for anyone with a computer to start their own business, it really opens up the opportunity to create a second income stream.
Take the time to develop a skill into a product you can sell. Your ideas and experiences are more valuable than you might imagine.
It’s time to start capitalizing on them.
Authored by Brian Simmons for www.TheVesey.com. For additional financial tips, you can view his blog at Globalfinancematters.com.