Imagine never having to worry about money.
No more struggling to pay your bills, no more stress about losing your job, no more fear of escalating costs, and no more worry about your future. It sounds like an unattainable dream, and for most people that’s all it will ever be. But it doesn’t have to be that way.
Most people never achieve financial freedom because they have wrong headed notions about how to make money, grow their money, and keep their money. But if you know the keys to achieving financial freedom, it’s 100% attainable.
In this article, I am going to cover 5 keys to obtaining financial freedom that you can start implementing right away.
We’ve got a lot to cover, so let’s get into it!
If you would like to see a condensed version of this article in video format, check out my YouTube video on the topic below.
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The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
Number 1: Find a Repeatable Formula For Making Money
This is the single most important ingredient for long term financial freedom. If you can unlock this, you’re going to basically be unstoppable.
Most people are stuck in a job and live paycheck to paycheck. They will never achieve financial freedom that way because they are trading time for money. You can only find financial freedom when your assets are making you money.
But you need to find an asset that will generate cash flow for you every month and that you can grow through your repeated actions.
Here’s an example of what I mean.
If you decide to buy a rental property, you can start generating rental income every month from it. If you buy another one, you can get two rental checks each month. Each rental check will not only give you money you can spend or invest, it will be paying down your mortgage. On top of that, your rental payment and property values can increase over time.
If you keep repeating this strategy of buying rental assets and do it right, before you know it, you’ll find that your income and net worth have massively expanded.
And unlike the stock market (which I have found to always be hit or miss), you actually have far more control over the outcome of your investment when you own rentals.
You can pick the location, the layout, the tenants, the lease terms, and all of the other key factors that play into the success of that investment. If you figure out how to pick the right properties and manage them well, you can parlay that expertise into the next rental and continue your streak of success.
Related Reading: If you want to learn more about how to buy your first rental property, check out my step by step article on the topic here.
Don’t have a lot of money to buy rentals?
Maybe you can start a blog or youtube channel for basically no money and create articles or videos that can generate income for you every month. Generally speaking, the more content you create, the more money you can make.
Now, you have to create the right articles and videos that will attract an audience, but once you figure it out, making more money is as simple as generating more content. You have basically discovered the formula for printing money.
If you want to learn how to start your first blog from scratch, check out my tutorial on how to do this here. You’ll find detailed info on how to set up your website, how to select your niche, how to write articles that will rank well on Google (this is key!), how to monetize your blog, and much more.
I want to highlight that this is not theoretical. I literally make thousands of dollars each month from each these strategies.
But If none of these options are a good fit for you, try to find something that is.
Maybe it’s creating online courses in your area of expertise and selling them. Maybe it’s writing ebooks and self publishing them through Amazon KDP. Maybe it’s creating a print on demand business. Maybe it’s buying ATMs or vending machines.
The list of money making assets you can buy or create that can be grown via repetition is vast. Once you strike on something that works, keep doing it. Keep getting better at it. Eventually, the money will roll in like a tide.
This is how rich people get rich and stay rich.
Once you find the strategy that works for you, the key is to keep at it until you have enough money coming in to more than cover your expenses. Once you hit that point, you no longer have to really worry about money. You’re almost there.. But you’re not financially free yet. Let’s move on to the next step.
Number 2. Automate Your Money Making Assets
Once you have mastered the money making strategy that’s right for you, the next step is to automate it.
You are never going to be financially free if all of your time is spent growing and maintaining your assets.
Freedom means you make money on autopilot. So figure out a way to keep your money making assets churning without your direct involvement. If you own rentals, you can hire a property manager, or you can still manage your properties, but not do the actual work. I never fix toilets or do any of the labor to maintain my rentals anymore. I have a team of people I call to do that for me.
The same thing can be done for online businesses.
Something like a blog will make money without any real involvement on your part once the articles are written. But if you want to keep it growing, you can hire writers to create new blog posts. That way, you still have the benefit of passive income but can continue to grow your asset over time.
The pattern is pretty clear here.
The answer to automation usually lies in hiring the right people to do the work instead of you. But this will only work after you have established a successful money making asset or business and know your strategy inside out.
You need to be deeply familiar with what works and give clear instructions to your team on how to execute, so they don’t screw up what you’ve worked hard to build up.
Number 3. Eliminate Headwinds Caused by Bad Personal Finance Habits
This one is straightforward. I am talking about keeping your basic personal finances in check. Once you start making real money, you don’t want to sink yourself by going crazy with lifestyle creep. So stay the course and don’t let extravagance (and debt) be an obstacle to your progress.
Some basic personal finance pointers to keep you on track include the following:
- Spend less than you earn (this is perhaps the cardinal rule of personal finance). Everything else falls apart without this.
- Create a workable budget. If you have failed in the past to do this, check out my article on why budgets fail and how to fix it.
- Eliminate bad debt. I am talking about credit cards, payday loans and other high interest rate debt.
- Start saving and investing. A great savings strategy is paying yourself first. It’s a way to automate your savings without a lot of the hassle associated with managing your money through strict budgets. You simply direct a portion of your paycheck directly to your dedicated savings or retirement account. You then have the rest of the money deposited into your normal checking account and use that money for day to day expenses and bills.
If you want a great beginner’s guide to saving and managing money, check out my article on the topic here.
Number 4. Protect What You Have
If you’ve been able to accomplish all of the stuff I just covered, you are very close to financial freedom, but you want to make sure you don’t lose what you have built though illness or catastrophe.
So keep yourself as healthy as possible and don’t neglect your physical well being. If you get really sick or worse, what’s the point?
Second, you need to make sure your financial assets are protected. That means forming business entities that can shield your personal assets and getting appropriate insurance to protect against lawsuits or other claims as well as physical calamities.
Number 5. Enjoy the Ride and Don’t Get Greedy
As you start making money, you are going to be tempted to move the goalposts around what financial freedom means for you. Maybe you were really happy at first with the thought of living on $100,000 per year, but now want a more luxurious lifestyle and decide to postpone your financial freedom target to $300,000 per year.
I’m not saying that’s a bad thing, but if you keep moving the goal posts, you will never get there.
Remember at the start of this article, when I talked about not having to worry about money and how great that sounded? Don’t let greed steal that happiness from you.
Enjoy the ride and once you’ve achieved your goals, savor your success and live the life you’ve always wanted!
So there you have it – 5 keys to achieving financial freedom and some practical tips on how to implement each of them. If you want to learn more about basic personal finance and how to get your money matters under control, check out my comprehensive guide on the topic here. It covers budgeting, debt, income, investing and more.
For more advanced strategies that can really catapult your wealth, check out my article on advanced personal finance tips here.