What is Financial Freedom?

As you know this blog has been inspired by financial freedom. While there are differing opinions about what financial freedom, this article will present financial freedom from my personal perspective.

What is financial freedom to me?

Financial freedom to me is having enough money to live without ever really having to work again. Now this does not mean you never have to work again. Instead it means that you work on your own terms.

You never have to worry about the stress of losing your job. You don’t have to worry about whether you have clients or not. When you are financially free, work no longer becomes a requirement in life but rather a choice.

How would you get there?

There are a number of ways to achieve financial freedom. The most effective way is by building passive income streams. This is done in a few ways shown below.

Have Your Money Make You Money

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Build up enough cash so that it will generate money-almost like planting your very own money tree.

The first way to build a passive income stream is to build up enough cash so that it will generate money. Use your cash to purchase dividend paying stocks or bonds which pay you interest. You could also purchase annuities which would pay you over the life time of the annuity.

For example, if you have $5 million in cash right now you could invest in bonds which pay out 5% a year. Just by having those bonds alone, you will generate $250,000 a year in interest income!

Imagine, $250,000 in your pocket and you don’t have to do anything at all! You can accomplish this with dividend paying stocks as well.

Stocks pay a wide range of dividends, and are not quite as reliable as bonds for paying you out every month.

But stocks do have the advantage of appreciating in value over time, so that when you sell the stock you have a chance to make more money.

I don’t have $5 million to put away, what should I do?

Fair enough. Most of us do not have $5 million in liquid cash at our disposal at any time. So what should you do instead?

Create a Business which Produces Cash with Minimal Effort

While I was writing that subheading, it sounded a tad bit scammy. Just like one of those spam emails which tell you how some guy makes $5,000 a day just by clicking a few buttons.

There are people out there with legitimate businesses that do not require much effort on their part.

They do this by doing one of two things

1)      They automate their business so they don’t have to do most of the work or,

2)      The create a product which they can sell to the masses

In order to accomplish number one listed above you would do a few things. First you would have to build a business up from scratch (if you can’t buy one initially).

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Automating your business by hiring employees is one method you can use to become financially free.

Then you would look to hire employees to help do the menial tasks that you don’t want to do. Then finally you would hire a manager to help oversee the employees and take care of the higher level duties that you don’t want to do.

This leaves you to plan for the future and grow, and takes you away from the day-to-day tasks that you would be doing at any typical 9 t
o 5 job.

For the second item, you would create a product that you only need to create once or can be created by others, and sell it to the masses.

Key Point: Learn How to Separate Time From Money

The key to building a passive income business is separating your time from money. Most jobs will pay you for every hour you work.

It has been engrained in us that we get paid when we work and don’t get paid when we don’t.

What if you did get paid when you didn’t work? How would you like to get paid when you didn’t work? When you are sleeping? When you are on vacation?

If you have an automated business, you will no longer trade your valuable time for money.

There are a ton of ideas to help you build up passive income streams. One of the best books to help you understand the different types of business systems is “The Millionaire Fastlane” by MJ Demarco.

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Check out The Millionaire Fastlane, one of my favorite business books that I’ve read recently

In that book he lays out the “Five Fastlane Business Seedlings” which are business systems which produce passive income for the owner. Those five systems are

  1. Rental Systems
  2. Computer Systems
  3. Content Systems
  4. Distribution Systems and,
  5. Human-resource Systems

If you want to find out more, check out the book on Amazon. It really is a great resource and I would recommend it to any entrepreneur or wantreprenuer looking to get started.

My Top Three Reasons for Wanting to Achieve Financial Freedom

I have told you what financially freedom is to me. Know I want to elaborate on why it is my goal to achieve financial freedom.

Reason #1: I want to have the freedom to do what I want when I want

If I want to sleep in until 12 I can.

If I want to meet friends for lunch on the other side of town at the last second I can.

If I want to go on vacation at the drop of a hat I can.

I would also have freedom to pursue hobbies that you enjoy but would never really make you money.

For example, I enjoy playing basketball and golf. I am not really good at either one of those. I could play those whenever I want.

Reason #2: I want to explore the world

Many folks don’t have to be financially free to explore the world, but I think it would be pretty amazing being able to travel all over without a timeline to get home like you would when you work.

I have never traveled much, and I think it would be great to be able to see the world.

Being financially free would allow me to travel on my own time, and have the money to do so.

Reason #3: Spend more time with those I love

I am personally not a workaholic. I’ll admit it.

I will work really hard doing the job the needs to be done. Once it is complete I go home and do the things that I want to do.

It’s not even that I am lazy, but I just like to enjoy life and do those things that I want to do.

I don’t want to feel obligated to go into some place five days a week for the next 35 years of my life.

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You now know my reasons for wanting to achieve financial freedom. What are yours?

I enjoy spending time with family and friends, and financial freedom will allow me to do this.

Down the road when I have kids, I want have the ability to spend time with them. I want to be a part of their life.

I don’t want to be at work all of the time and come home and be too tired to spend time with my family.

This is what financial freedom is to me. This is why I want to achieve it. What is financial freedom to you? Why do you want to achieve financial freedom?

Photo Credits (in order)

Flickr/Shari’s Berries, Flickr/Phil Whitehouse, Flickr/Kalyan Chakravarthy

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Free for Five Days: “Get Rid of Debt Forever: A Guide to Understanding and Conquering Debt”

I am making this post to inform you that my first eBook, “Get Rid of Debt Forever: A Guide to Understanding and Conquering Debt” is available for download on Amazon for free for the next five days.

From August 21, 2014 to August 25, 2014, you can have the book sent straight to your Kindle or any other device and it will be completely free. All you have to do is go Get Rid of Debt Forever: A Guide to Understanding and Conquering Debt and click download to have it sent to you today.

This book (along with other projects) has taken up quite a bit of my time. As a result, I have not been blogging as frequently as I would like, and I apologize for that.

But, I have learned a lot in this process and I want to use this blog post to discuss what you will find in my book, why I decided to create this book, and what I learned in the process.

What You Will Find

The eBook I created is a collection of blog posts that I have made on this site, along with a few added chapters not found here, organized and put into one place.

You see, I originally intended on creating a comprehensive guide on personal finance that would be found on this blog. I came up with this idea back in April and it seemed like a great idea at the time, but then I recognized something.

My realization

I realized that I was writing A LOT. And I was only writing on one individual topic which was debt. If I was going to create a comprehensive guide on personal finance, it would take a LONG time.

What I decided to do was repackage these blog posts on debt into an eBook. I was originally planning on giving this eBook away as an incentive for people to subscribe to the blog. Then I changed my mind and decided I wanted to publish it on Amazon, which I’ll get to in a minute.

So I decided to repackage the book, add some chapters and make it more organized, and edit it to make it a little less informal and free from error (at least that’s what I hope!).

Why Did I do This?

I mentioned above that I was going to give this book away as an email opt-in book. There are a couple big reasons why I wanted to publish my eBook on Amazon instead.

Reason #1: I wanted to create my own product

The first reason is quite simple. I wanted to create my own product that I could sell. I wanted a product that has my name on it that I could put out there for people to purchase.

At the end of the day, that is why we are here. I thought it would be great to repackage these posts, make them more organized and better written, and allow people to purchase my product.

What I hope is that people get some great value out of this eBook and that it will help them.

Also, I want to work on some advertising and marketing skills. By creating my OWN product to sell, I can create advertisements to sell something that can give me some sort of a return on investment.

In the process, I will sharpen my advertising skills which will help me dramatically in the future.

Reason #2: I wanted to learn the Kindle Direct Publishing platform

I plan on writing a lot more in the future. This will include many eBooks which I want to sell to help solve people’s problems.

For this reason, I want to learn the process of creating a book and putting it on the Kindle platform. I have learned A LOT in the process. Discover what I learned in the next section of this post.

For this reason, I figured I might as well learn this platform and process now so that I won’t have to face this learning curve in the future.

What Did I Learn From Writing this Book?

Writing is hard. Despite the fact that this is a short eBook, it was still a long process. Creating, editing, and now advertising has proven to be a challenging process.

When writing a book it would seem that writing should take up the most time. Not for me. The thing that took me the longest was the editing and formatting of this book.

It took a while to make sure everything sounded good and the format of the book was good for the Kindle platform. I went through a few rounds of editing with my girlfriend which took a little longer than I was hoping.

Also, creating the cover is another challenging process. Luckily for me, my girlfriend grew up doing graphic design and was able to help create a pretty good looking cover photo for my book.

Creating is fun. I love creating something and putting it out there for all to read. For me, writing is such a rewarding experience. So much that I plan on creating and releasing another book soon.

Staying balanced is hard. I have had to balance writing and editing with my full-time job, along with social media for this blog, blogging, and having a life.

As a result, my blog has suffered. I haven’t written a post in about a month here. It is difficult balancing all of these things but a lot of people do it and I’m not going to complain.

The Most Important Lesson of All

Even if I fail it is okay.

I would be perfectly fine if my book sales don’t take off. Obviously I’d be happier if I made a million sales of course, but if sales fall flat I won’t have any regrets.

What I have learned through this entire process is more valuable than anything. Even if I fail, no one can take away those skills I acquired and the knowledge that I obtained. These skills can transfer over to other areas in my life down the road.

On top of that, I have something to show for my time. Instead of wasting time on TV or fooling around, I have an actual product that I can point to and shows what I did.

Finally, if I didn’t try, I never would have learned anything new at all.

Takeaway

Writing a book is fun. I recommend anyone try it out. It’s not easy by any means and it takes time and it probably won’t be worth it money-wise. But the experience you gain will be completely worth it.

Once again, you can get my eBook “Get Rid of Debt Forever: A Guide to Understanding and Conquering Your Debt” completely free on Amazon for the next five days. Click the picture below to check it out!

I would love to hear your feedback, so if you could leave a review on Amazon I would greatly appreciate it!

Get Rid of Debt Cover

From August 21 to August 25 you can get your copy of my eBook completely free!

Businesses know how to make you buy a product. Don’t become a victim of their mind tricks.

What an amazing deal! I can’t believe I’m getting such a steal! 

When buying a product on credit, it’s not hard to fall victim to believing you got a great deal. Big companies know how consumers think and they know how to get a product into their hands as quickly as possible. Millions of dollars are spent advertising and researching consumer behavior.

One technique companies use to peddle their product onto consumers is to make them believe they are getting an amazing deal. I’m sure you’ve seen infomercials which tout that you can buy a product with “6 easy payments of $99 a month, no money down!” Would you still but the product if they told you it was “$600 dollars plus interest at a ridiculously high interest rate!” I don’t think so.

This same thing goes for cars. In the last article I discussed the negatives of taking out car loans. Once again, companies with throw out phrases like “only $299 a month for 60 months.” For them, it’s all about framing and making your gigantic purchase seem not so gigantic. When you spend a little amount over a long period of time you are dying a very slow but painful financial death of a thousand cuts. You become a servant to the lender and lose any chance at financial freedom.

The little things add up on both sides of the coin

You know how saving small amounts over time can add up? Well spending small amounts over time can have that same effect, except you suffer instead of benefiting. Don’t get fooled into thinking you aren’t paying a lot. Don’t look at purchases as payments in monthly installments. Take a step back and realize what the total cost of your purchase is, and then decide if it is really worth it to you.

We are all victims of the instant gratification bug

Instant gratification. We are all guilty of it. How could we not be. We live in the of the fastest generations ever. I was on Amazon the other day looking for books to read and stumbled across one that was on my short list of books to read. I went to the page for the book and in less than 10 seconds and the click of a single button, that book was delivered to my Kindle. I even commented to my friend how scary it was that I just bought something with the single click of a button.

With how quickly it is to buy things now, it is easy to get tripped up and knocked off the path to financial independence. In a matter of seconds you can spend hundreds, heck, even thousands of dollars. Back in the olden times you actually had to get in your car, drive to a store, find the item you wanted before you could even purchase it. You had time to think about the purchase you were about to make before you made it. By the time you got to the store you may have even reconsidered making the purchase altogether.

Once again, companies are behind making it easier for consumers to buy products. The faster you can buy a product, the less time you have to think about whether or not you truly needed it. It is their job to figure out how to get a product into your hands as fast as possible. Look around you. It’s everywhere. Fast food, Wal-Mart on every corner, one click purchases.

Considerations you should make before a major purchase

1)      Do I really need this product?I advise you, before you buy a product, take exactly three minutes before you click buy and consider the following:

2)      Will I still be satisfied with this product in six months?

3)      Does this product help improve my life?

4)      Is this not an impulse purchase?

5)      Can I afford this product without going into debt?

6)      Finally, Do I have a good reason for this purchase?

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The more “Yes” answers you have, the more likely it is that your purchase is a good one. It can be a dangerous trap when you combine instant gratification with credit cards. Not only are you mindlessly buying something, you are buying it with debt which can take months or years to pay off. This is precisely why I advise you take at least three minutes to really think about what you are about to do. Don’t set yourself back two years for a purchase you made in ten seconds.

Summary

  • Companies know how consumers think, and will make a large purchase appear smaller by giving you the cost per month instead of the total cost of a product.
  • Just like saving a little bit adds up over time, spending a little bit in monthly installments will add up over time. Understand the actual cost of your purchase.
  • Companies know consumers seek instant gratification and have responded by making products quicker and easier to buy.
  • Take into consideration the six questions I listed above before you make a major purchase. Don’t let a split second decision set you back years.

Photo Credit/Flickr User Paul Inkles