If you are like me, you often see people say they have achieved “financial freedom,” but what does that really mean?
This article will answer that question and several steps one can take to achieve financial freedom and enable you to live your best life!
Financial Freedom – What is it?
Financial freedom means different things to different people, but it can be broken down to have the same general meaning.
According to the oxford dictionary, freedom is the power or right to act, speak, or think as one wants without or restraint. At the same time, financial is the finances or financial situation of an organization or individual.
When one puts them together, financial freedom is the financial ability to live the life you want to without hindrance or restraint. In other words, it means having enough cash, investments, and savings to afford the lifestyle you want to live. It is about being able to control your most valuable asset – time.
At this point, you can lead a comfortable life without having to worry about expenses, and when you can spend more time with loved ones, devote yourself to your passion, or switch to a profession, you have always wanted to pursue.
If done correctly, true financial freedom is attained when you no longer have to work for money, but instead, you have your money working for you!
5 Steps to Financial Freedom
- Determine Your Freedom Number – what is the amount you and your family need to live the life you want. There is no magic number for everyone, so make sure you really think about all the expenses (expected and unexpected) you will have, plus a little extra, so you do not have financial anxiety.
- Gain Control of Your Finances – Now that you have your number figured out, you should take a hard look at your finances and see if there are any messes to clean up. If you have a good amount of debt, that means you will either need to pay that off or increase your freedom number to afford that lifestyle.
- Build Your Savings Nest Egg – Achieving financial freedom does not happen overnight, and having a buffer for unexpected expenses is a must. A lot of experts recommend a six-month emergency fund. Once you have that, you can start making your money work for you even while you sleep!
- Get Your Money Working For You – Now that you have your financial safety net, you are ready to start creating passive income streams to help you on your journey to financial freedom. According to the IRS, passive income comes from two sources: rental property or a business in which one does not actively participate, such as being paid book royalties or stock dividends.There are many different options and means for you to diversify. We like multifamily real estate for the many benefits it offers. However, this is something you should do your research on to determine what works best for your particular situation. Bottomline, get your money working for you by creating one or more passive income streams.
- Re-evaluate and Change as Required – all investments need constant evaluation to ensure you are still on track toward financial freedom. If you choose to invest in a syndication, look at your quarterly and annual updates to ensure you still achieve the returns you need. Put more money where your returns are strong and adjust course where they are not.
Conclusion
Remember that financial freedom means different things to different people, and there is no one-size-fits-all plan. Financial freedom depends on your unique goals, values, and living standards. However, knowing what financial freedom means to you can help your dreams become a reality. It is not about being rich, but getting control of your most valuable asset – time – and living your best life!
Do You Want To Learn More?
RIZE Equity is a private multifamily investment firm, and we work with accredited investors to help them achieve their long-term investment goals through high-quality multifamily investments in the Southeastern U.S. If you would like to learn more about our investment strategy, we invite you to visit our website at www.rizeequity.com/invest and schedule a free no-obligation appointment with us. Also, check out our free passive investor’s guide on investing in multifamily at www.rizeequity.com/passive
About the author: Sean Cullen is the founding partner and Director of Business Operations at RIZE Equity Group LLC, a privately held real estate investment company that helps current/former professional athletes, veterans, and business professionals create generational wealth through smart multifamily investments.