How To Achieve Financial Freedom

What is financial freedom?

Most advisors define financial freedom as “when your investments generate enough passive income to cover your monthly living expenses, whether you go to work or not.”

So how can you earn enough passive income to cover your living expenses?

With these four financial moves you should make, that will enable you to become financially free:

Financial Move #1 – Know exactly how much you need to bring in each month to cover your living expenses.

Sit down today and make a detailed list of everything you pay for each and every month. This includes your mortgage payment, your car payment, and all the utilities for your home. It can also include medical expenses and education expenses like private school, books, meals at school and university or student loan costs. As well as your usual living expenses like food, water, going to the movies and taking vacations. When you add all these up, this will be your target number.

Financial Move #2 – Take inventory of your current assets and the income they generate each month.

These assets can include social security payments from all the money you’ve sent the government over the year. It also includes dividends and payouts from any retirement accounts you may have. Plus, include your savings account, and funds generated from your investment portfolio.

Financial Move #3 – Build a plan to increase the passive income you earn, so you can get to your target number (your living expenses). Then set a date for when you want to reach this goal.

For example if your target goal is $5,000 a month in passive income, you can now set a target date 5 years from now to be able to have all of your living expenses paid by your passive income sources.

Financial Move #4 – Leverage at least one of the two best ways to generate passive income on a long-term basis:

Start your own business – Where you have employees that do all the work for you, and you collect the profit at the end of each month…

Or own rental properties that generate income every month. With this option, not only can you earn money from the rent you collect, you can also benefit by increases in equity value of your properties when the housing market is up.

As you can see, becoming financially free is not that difficult. You just have to know the best ways to get there. Then take action to put these effective ways into action. Enabling you to create your future of financial freedom.

Related posts:

Is a New or Used Car Smarter?
Gift of Giving = Financially Fit
5 Reasons To Add Rental Properties To Your Retirement Plan

Please share your comments and questions