Financial freedom is not about how much money you have or you are able to spend!
It is about being able to be independent, support yourself and your family (if needed) and still be able to invest in your priorities. To be able to fulfill your needs, debt free and safe and secure enough to be able to take risks and bold life decisions.
This financial freedom is available to ALL, no matter how young or old you are, no matter how much you earn, no matter what is your profession, no matter where you are in the world this is achievable for YOU and for everyone!
Most times where I have found that people are not able to achieve it is because they don’t know how, they haven’t found the tools, guides or examples to follow on.
So if that’s your case and you don’t know where to start, just follow this steps closely and for real and you will achieve it!
So here we go! :
#1 Set and write down your true life PRIORITIES!
This exercise is KEY for you, please try to take the time to think it through and start writing down what you truly think or want as your priorities.
A) In this first section write all your priorities, with no structure or order, it doesn’t matter what comes first or last, use it as a brain storm of what is important for you. (take 5 to 10 mins for this section)
B) Now, please pick and order the TOP 5 priorities and write them down in order here, and when you think of which of what you wrote above are your top 5 , think in a time period like, “right now” or “this year” or “from now to the next 5 years”:
#2 Plan and build the actions you are taking (or will commit to take) to achieve each of those priorities.
Now this one, is the most “eye opening” step, here is where you will add an other column to your top 5 priority list and write down which actions are you taking in order to achieve or maintain each of those priorities. (my example in green)
#3 Understand the difference between your needs and your wants
All this exercise is extremely personal, but specifically this step.
So I would recommend you do it 100% on your own so you feel free to write whatever truly makes sense to you without being afraid to be judged for your life priorities, choices, wants and needs. Remember that there is not only 1 true right perspective. The only thing that is needed here is that you are TRUE to yourself.
It can even be aspirational as “what you would like to want or need or think it is not necessary” but just make sure is YOUR perspective.
*what I write here take at as an example, not as a guide. Only write what is truly real for YOU and no one else.
#4 Live with a BUDGET
(pay attention that I wrote: live ‘with’ a budget and not ‘on’ a budget)
Because there is a huge misunderstanding around this subject: people think that those who live “on a budget” are short on money or have low incomes. But that is completely WRONG. We should all be taught to live on a budget or WITH a budget.
That means: to understand what your income is and your expenses are, and be able to MANAGE your own finances! This should be taught (as I mention on my podcast) from elementary school to college. This is what will actually CHANGE YOUR LIFE for good.
The previous exercise helps you understanding yourself, to be able to build your own budget.
Here I share a simple template but if you find a better one , follow what makes more sense to you! 😀
The important thing is that the format covers all your income and expenses so you can calculate the “amount left” and hopefully is more than 20% of your income. Then we can continue to next step on what to do with that “extra amount” ?
#5 INVEST your money don’t “save”.
This has been the step that brought me the most growth and freedom in my life.
As much as you can do to be able to save money, when you decide to invest it and see it growting you undestand what financial freedom really is.
Being able to see your money literally “work for you” and produce more is one of the best feelings ever in personal finances.
I will share a short 101 economy explanation on why you should NEVER save your money but invest it all:
when you “save” your money wether it is under your mattress or in the bank it is money that gets “hidden” and is not working in the country’s economy, it is not going around touching many people and business producing goods, jobs, and benefits for people. it is just there “hidden” so if everybody gets to “save/hide” 20% or more of their salary that would mean that there will be 20% less of the country’s money circulating and creating jobs, goods, etcetc. So then a crisis might come because the country will have to print more money so there is enough, then the value of your currency will drop, so your savings will be worth less, and your income will also be worth less.
So you get me right? why is it soooo important for your own finances and your country’s to INVEST instead of SAVE your money?
When you invest in whatever you want to invest: a coffeeshop in your neighborhood, a car to be rented as lyft or uber, a real estate, or a big company stock , then that company will use the money to produce a service or a product creating jobs and making the economy and your investment returns GROW!
So after you have understood and applies this 5 steps we can get into WHERE TO INVEST!?
Which it is so big that I am panning to write it on a different post –> soon to come <—
but I can start by sharing 3 things :
First of all, as in every other matter you’ve heard me say: GOOGLE IT!?
Since it depends on which country you are you have to start googling, where and how and in which platforms should you invest. read a bit of the news of each investment instrument is the best for your country’s context.
Second of all I will share what a good (experienced) friend shared with me, that gave me courage and confidence: “The risk level of your investments should be inversely proportional to your age” this means: the younger you are, the higher risk investments you should take, High risk –> higher probability for higher return. and if you take care of your health (which will take me to the 3rd advice) you will have many years to recover in case you “loose”.
And last but most importantly here is the order on how and where you should invest:
- Your own physical & mental HEALTH.
if you invest in your health ( eat healthy, workout, meditate, yoga, take therapy) you will increase the probability of the biggest source of wealth, your ability to work!
And if you dont invest in your health no matter how wealthy you are you wont be able to enjoy it or keep it growing.
- Your BRAIN!! (knowledge)
This might sound obvious but in the every day life it is not so obvious to people.
The more your grow your knowledge, experience and education, the more you will be able to produce wether it is getting a higher payed job or creating and growing a business because you have invested in learning the skills and knowledge you needed for it. (and by education I don’t mean “going to school or university” I mean READ, ask questions, try new things, LEARN more all the time)
- Your $$$$
now we can talk about money .
[ I would much rather write here “your family” but that should go on #1 under mental health.
Remember that family and friends is what gives sense to our lives; siblings and friends will grow apart if we don’t invest in those relationships.
Plus, specifically our parents are more probable to die before us and after you have stopped living in their house you have already seen 97% of what you will see them in all your life, so treasure the time with your parents. ]
Now on money invest your money never save it, invest it in at least 3 different financial instruments: eg. stock market, funds, real estate*, a small business. etc (*you dont need to have a lot to invest in real estate there are many platforms that allow you to invest from small amounts as 500usd. will share more on this on the next blog post )
Now since this post is already TOO long I hope you got to this point and have been able to fill out each step with your own information in a personal notebook. If not, please go back and do it! Serve your self a cup of coffee or tea and do it, it will take you less than an hour and you will see things differently from now on.
Thank you so much for reading and hope to help at least 1 person with this.
until next post! see you on IG! 😀