Most of us dream of achieving financial freedom — that moment when we don’t have to worry about how we’re going to pay the bills or make rent, when all our basic needs are provided for. When there’s enough left to set aside for whatever we desire, whether that’s paying off debt, recreation, or a long vacation.
But what is financial freedom, really?
Simply put, it’s having enough income coming in to not have to trade your time for money anymore.
Most people believe that working until you retire or getting rich is your best bet for becoming financially free, but I’m here to tell you there’s a better way.
And that way is by building yourself a stream or multiple streams of passive income that can pay for your expenses and more… without the need for constant, tiresome work.
What Is Passive Income?
Passive income is exactly what it sounds like: Money that comes in whether you’re actively working or not.
It may sound strange at first, but it really does make a lot of sense.
There are two main ways to make passive income. The first major type of passive income is an idea most of us are familiar with already: investments. These investments generally create monthly income with a fixed or standard rate of return attached to them. This would include vehicles like bank and government bonds, corporate bonds, t-bills, rental property income, etc.
The second type of passive income is the one that’s harder for most people to wrap their heads around: passive business income. Many people assume that running a business means you need to be constantly working in order to achieve any real success. But that’s actually not true at all
Instead, what you need to do is create a business that has the potential to be systemized so that it can work without you. That way, rain or shine, money will continue to flow in whether you’re putting in the hours or not.
Let me give you an example: my landscaper in Hawaii. This guy makes about $20,000 a month and only has to manage the accounts. He doesn’t do the actual gardening work himself. He has several guys mowing and blowing and weed whacking, and it all works without him being on site. In short, this business is an ongoing, systemized, money machine.
Good or good? Next…
What Are Your REAL Expenses?
Of course, passive income is only part of the puzzle. If you have passive income pouring in, but it doesn’t add up above and beyond your expenses, you’ll still never reach a state of financial freedom. The other part is understanding your expenses and what’s actually essential in your life.
When we are talking about financial freedom, there are two ways to talk about.
The first is being free just to be free. This is when your passive income pays for only your basic needs, but not much extra (like all the extra luxuries in life).
Then the other way is where you are able to get whatever you want, when you want, and still not “have” to work.
The ultimate goal is the latter of the two, however, it’s a great first step when you have all your basic needs taken care of, yes or yes?!
So it’s best to create a list of your expenses that are necessities and a list of “nice to haves.”
You’ll notice when you do this, that it’s much easier to simply cut or simplify the non-essential expenses. You’ll begin to question whether you truly need them in your life. Remember, even better than passive income, the best way to make money, is to manage your money well.
How To Find Your “Financial Freedom Number”
So that all sounds great, right? But to some of you, this may still seem pretty out there. You might be asking, “But Harv, how do I know when I’m bringing in enough money to really be financially free?”
And to that I say: it comes down to simple math.
The simplest way to do this is…
- Get an excel sheet or something similar
- List out your expenses (the necessities).
For example: rent, mortgage, utilities, food, debt/loads, insurance, pharmacy and care, doctors, kids care, phone, car and car gas (if it’s necessary), pet care, etc.
- Add up all your expenses
- Voila — you have your financial freedom number!
You’ll need to earn more than [INSERT YOUR EXPENSE NUMBER] in passive income to be financially free and have all your basic needs met.
Here’s a hypothetical example for you. Below is a list of expenses that totals $5,796.10 per month, with the financial freedom formula being:
Financial Freedom = Passive Income > Expenses
So, in this example, you’ll need to earn more than $5,796.10 in passive income to be financially free, yes or yes?
So now that you understand how much you need in passive income to be financially free, the next step is to figure out how to make it happen!
In my experience, there are 8 specific elements you MUST have working for you to become financially free as quickly as possible.
And to teach you these 8 critical elements, I’ve put together a free web class airing January 10th – 17th, called:
The Fastrack To Freedom:
“8 Critical Elements To Becoming Financially Free Quickly”
On this web class you’ll learn,
- My FreedomFirst formula that will help you never “have” to work again.
- The ugly truth about why most people don’t become free, and how to beat the odds with a simple mindset shift.
- A unique technique that could accelerate your path to freedom (You’ll be shocked at how simple it is!).
And much, much more!
Click here or select a time and date below that works best for you below. See you there!
For Your Freedom,