61 Financial Freedom Quotes And Steps To Achieve It
Many people dream of being financially stable and leading a comfortable lifestyle. This lifestyle involves buying fine things in life and traveling the world without worrying about getting broke. Essentially, this is what financial freedom entails. This post lists the top 61 financial freedom quotes and the steps you need to achieve your own financial freedom.
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What Is Financial Freedom?
So, what is financial freedom? Per MoneyFit, financial freedom means having sufficient investments, savings, and cash to fund your desires without having to work. In other words, you have enough income to pay for your living expenses.
With financial freedom, you can afford to do things you like and choose a career path you are passionate about rather than your choices being driven by salary. Once you attain financial independence, you do not depend on others to survive.
The Difference Between Financial Freedom And Financial Independence
Financial independence and financial freedom are similar and often used interchangeably. To attain both financial independence and financial freedom, passive income is required. However, there is a slight difference between the two terms. Achieving financial freedom is a journey or path through several milestones. Financial independence is one of those milestones.
The 7 Stages Of Financial Freedom
1. Dependent Stage
There is nothing rosy about the dependence stage. If you are in a dependent financial position, you depend on others for financial support. At this stage, your expenses are more than your income. You start progressing through the other stages after you start earning a profit. However, you must be ready to work extra hard.
2. Solvency
Solvency or survival is a stage where your earnings exceed your expenses. Life starts to become easier when you can pay your bills and financial commitments. You no longer depend on someone else for financial support. Financial solvency brings psychological benefits because you do not suffer from the anxiety that comes with being late on bills.
3. Stable/Agency
Stability is the final stage of survival. In other words, you stop surviving and start thriving. This means you can live how and where you desire. When your income is more than your expenses, you can comfortably meet your financial commitments and pay off some of your debt, such as student loans and mortgages.
What’s more, you have extra income to start saving into an emergency fund or even a long term saving plan. Although you may not be debt-free, you are making a consistent contribution toward becoming debt-free.
4. Financial Security
Financial security means that your income sources can cover your necessary living expenses if you lose your job. Your savings and investments are enough to allow you to live everyday life. Even if you do not ever have to work again, you can afford to buy essential clothing, basic food, and housing.
To be financially secure, you need to create an emergency fund and start saving. This means you are building and managing your wealth and track to attaining financial freedom. It’s worth noting that an emergency fund alone may will not usually cover all your monthly expenses. It is, therefore, vital to have numerous sources of income.
5. Financial Independence
Financial independence is one of the milestones towards achieving financial freedom. At this stage, passive sources of income can support your current lifestyle. Besides basic needs, you can also afford some comforts.
Also, financial independence means you are completely debt-free. At this point, if you wanted to, you could retire and enjoy life without having to work again. Long-term investments in the stock market will help you achieve financial independence because they bring income in dividends, interests, and capital gains.
There are three primary goals in the financial independence stage:
- Debt-free: You do not have any debts, including your mortgage. Living a debt-free or mortgage-free life means that the most significant monthly expenses are out of the way. This leaves you with more money to save and invest.
- You can continue working, but only if the job is aligned with your ultimate life goals. This means that you do not work for money only, but for social and mental stimulation.
- Advancing to the financial independence stage is sometimes tied to advancement in a new professional level. Instead of being an employee, you may opt to start a business or work part-time. You can also opt to go back to school and venture into a career path that can sustain you in your 70s. The main point? You no longer make compromises to make money.
6. Financial Freedom
After attaining financial independence, you will probably want to go a notch higher. Financial freedom is the lifestyle most people dream about. When you are financially free, you can afford high-end lifestyles such as flying first class or taking regular trips abroad.
At this milestone, your passive income is enough to support comforts and luxuries without worrying about the expenditures.
7. Abundance
Abundance is when investment income is more than you need. Passive income can finance your lifestyle indefinitely. Most philanthropists are in this stage of financial freedom. They can share their wealth, lead a luxurious life, and explore the world.
The more savings and investments you have, the more freedom you gain. Financial freedom helps eliminate fear and worry, enabling you to base your decisions on happiness rather than money. The progress arms you with smart money habits and skills to propel you to the next level of financial freedom and progress to the future freedom levels.
For instance, you learn to live on less than you make if you are working towards debt freedom. Also, financial freedom enables you to take more significant risks.
How Much Money Do You Need For Financial Freedom?
Because financial freedom differs for each person, there is no specific amount attached to financial freedom. Essentially, financial independence entails the freedom to base your decisions on things that make you happy instead of making you money.
If you’re dead set on wanting to know a number, you can calculate your financial freedom number by using the four percent rule. According to the rule, you can withdraw four percent from your investments annually without ever running out of cash.
For instance, if you have $100,000 in your account, you can withdraw $25,000 year after year without depleting your account.
For the subsequent years, increase the annual withdrawals by the previous year’s inflation rate. For instance, if the second years’ inflation rate is two percent, you only have to increase the $25,000 by two percent. Initially, four percent was applied to 30 years’ timeframes. However, more research shows it may work longer than 30 years.
How To Calculate Forever Financial Freedom
1. Add Up Your Savings
Add all savings, including savings account, checking accounts, retirement accounts, and taxable investment accounts. Do not include money planned to make purchases in the near future or college savings meant for children’s education.
2. Subtract Debts
The next step is to minus debts from the savings. To be precise, add all auto loans, credit card loans, student loan balances, and consumer debts. The remaining amount after subtracting debts from the savings is the saving available for spending. You should not include mortgages in the debts. The home value covers the mortgage.
3. Use The Four Percent Rule
The next step is to multiple your net saving and investments by four percent. The figure you get is the current investments that can support your annual income indefinitely.
For instance, let’s assume you have a total of $150,000 in your account and debts worth $50,000. The nets savings is $100,000. If you multiply the net saving by four percent, you get $4,000. This means that your saving can support an annual income of $4,000 for years on end until you die.
The Cost Of Full Financial Freedom
How much money do you need to attain complete financial freedom? Absolute financial freedom is the amount of money you need to sustain your life without ever working again.
Below is a step by step guide to determining the amount of money you need to attain financial freedom.
1. Add Monthly Expenses
Calculating the full financial freedom number also uses the four percent rule. The first step is to calculate your total monthly expenses, including rent, internet, groceries, mortgage, insurance, and car loans.
You can make adjustments by including expenses you plan to add in the future and remove expenses you plan to do away with. The adjustments enable you to have monthly spending that reflects your future vision and the reality of your needs.
2. Find Annual Expenses
Multiply the total monthly expenses by 12 (12 months) to get the total annual expenses. The next step is to subtract the total costs from income. For instance, let us assume the net income is $10,000. This means you are making $10,000 more than you need to survive.
3. Factor In Passive Income
One of the ways to attain financial freedom is having a passive income. Passive income caters to expenses without necessarily having to work. This means that your passive income should be equal to or more than your costs. Examples of ideal sources of passive income include rental properties, employer-sponsored retirement accounts, ROTH IRAs, etc.
What Is A Financial Freedom Number?
Your financial freedom number refers to the amount of money you need to satisfy your living expenses. In simpler terms, it is the amount of passive income you need to pay for daily expenses. This means you can live without a full-time job and enjoy life using income from passive investments.
While you don’t have to quit your job, you have the control and freedom to resign or retire if you desire. In essence, financial freedom instills you with confidence to make life decisions depending on your passions and desires.
How To Calculate The Financial Freedom Number
You can know your financial freedom number by calculating the average amount of your monthly expenses. Here is the step by step guide.
1. Figure Out Your Expenditure For The Past 12 Months
The first step is to calculate the total amount of monthly expenses in the last 12 months. Consider all the debt payments, donations, credit card statements, and bank statements, and any cash transactions. There are some automated tools such as YNAB or mint.com that can help you keep track of all your expenditures.
However, some people prefer doing it the old way by putting everything in an Excel or Google spreadsheet. I created an Excel and Google Sheet you can use to budget your money.
2. Find Your Average Monthly Expenses
Add the last 12 months’ expenses and find the average by dividing the sum by 12. This average monthly spending is your freedom number. If your passive income supersedes this number, you can live a financially free life.
After finding your financial freedom number, you can use the four percent rule to figure out how much more money you need in your investment accounts to be financially free. Alternatively, you can multiply your monthly expenses by 25.
For instance, if the total annual expenses are $40,000, simply multiply by 25. Therefore, you need a portfolio of $1,000,000 to be financially free (1,000,000 x .04). In general, the financial freedom number is the amount you plan to spend each year and multiply by the number of years you expect to live. Don’t forget to factor in inflation.
How Does It Feel To Have Financial Freedom?
Without a doubt, finical freedom brings a feeling of stress-free living. If an issue crops up, you have enough money to fix it. Since financial consequences are the least of your worries, you can do anything you want without batting an eye.
A debt-free life with significant savings and investment can bring you joy. You don’t have to stay at a job you loath to earn a paycheck. When your finances are in order, you can enjoy better health, peace at work and home. You generally live a financially stress-free life.
To some people, the feeling is similar to landing the first job or admission to their college choice. Generally, financial freedom feels good and comes with its benefits.
Benefits Of Having Financial Freedom
Below are some benefits of achieving financial freedom. Let’s get started.
1. Health Improvement
Stress is linked with the leading six causes of fatalities in the United States. It causes health problems such as chronic back pain. Finances, including the activities and food we can afford, affect stress levels. Financial freedom can eliminate the stress that comes with not meeting your expenses and daily needs. Feeling healthy helps you to focus on essential things in life.
While money can’t buy you happiness, it gives you more control. Financial freedom gives you relief from anxiety tied to money. This means you do not have to worry about unexpected expenses. Financial freedom alleviates anxiety and stress by boosting a sense of stability and predictability.
2. You Are Not Afraid Of Losing Your Job
One of the biggest worries many people experience is getting fired from work. Financial freedom enables you to take control of your destiny and leave your job on your terms. If you are fired, you won’t worry much about where your next meal will come from.
Cash cushions give you a sense of resilience. This means you can bounce back stronger when faced with a disaster such as a family member’s health problem or death.
3. You Become Less Afraid To Fail
Failure is disastrous and even embarrassing. However, if your finance is in order, you can try numerous projects without fear of failure. Billionaires like Jeff Bezos can afford to experiment with multiple projects and entrepreneurship. Financial freedom helps eliminate fears so you can pursue action.
4. Feeling Of Fulfillment
If you are financially well-off, you can afford to take unique opportunities that many people can’t. The confidence to meet financial obligations using your saving enables you to choose how to spend your time. Essentially, financial freedom can make you more courageous and bolder. You can also afford to take a sabbatical leave from work, lead a healthy lifestyle, and quit a stressful job.
5. More Control Over Your Time
Financial freedom gives you control over your time to choose how to spend your time. For instance, some people would leave their profession to pursue other interests, given the opportunity. When your passive income covers all your expenses, the choice to leave your workplace is up to you. Therefore, financial freedom frees your time.
6. Enhanced Self Esteem
Financial freedom can boost your confidence and self-esteem. The feeling of accomplishment enables you to enhance your life aspects such as relationships and living life to your full potential.
How To Develop A Plan To Achieve Financial Freedom
Once you figure out your financial freedom number, the next thing is to determine when you want to achieve the goal. Making your goal time-bound is vital. It helps you stick to your plan and avoid an extravagant lifestyle.
Experts recommend establishing financial freedom mileposts at regular intervals. For instance, if your goal is to be financially free in the next ten years, you should attain half of the portfolio after five years.
Does the financial freedom number change? Well, your financial freedom number can vary significantly, depending on various factors. For instance, if you relocate to an area with a high cost of living, your financial freedom number will increase significantly. Similarly, the number can be affected by your cost of education in the new locality.
The good news is that passive income from smart investments increases with time. For instance, if you have rental properties, your passive income will increase significantly after paying the mortgages. The property values will also increase considerably over time.
Top 61 Financial Freedom Inspirational Quotes
These financial freedom quotes will inspire you and help you get on the path to living the life you deserve.
Attaining financial freedom is an admirable goal that can make you a respectable member of the public. It gives you the freedom to do things you love.
It is prudent to commit yourself to lifelong learning about methods of making money, especially passively. Also, you must tweak your mental and emotional intelligence in a way that helps you accumulate more wealth.
Specifically, you should go the extra mile in life to achieve financial freedom.
Manoj Arora Financial Freedom Quotes
1. “To achieve what one percent of the world’s population has (Financial Freedom), you must be willing to do what only one percent dares to do. Hard work and perseverance of highest order.”
2. “The struggle for financial freedom is very unfair. Just look at the rewards.”
3. “Financial Freedom is less about financials and more about freedom.”
4. “You can make excuses and earn sympathy, or you can make money and earn admiration. The choice is always yours…”
5. “You do pay a price for your financial freedom, but it is far lesser than what you pay for a lifetime of slavery.”
Robert Kiyosaki Financial Freedom Quotes
1. “Financial freedom is mental, emotional, and education process.”
2. “More important than how we achieve financial freedom is the why. Find your reasons why you want to be free and wealthy.”
3. “To obtain financial freedom, one must be either a business owner, an investor or both, generating passive income, particularly on a monthly basis.”
4. “Financial freedom is available to those who learn about it and work for it.”
5. “Financial freedom is freedom from fear.”
6. “Financial independence is about having more choices.”
7. “If you want to be financially free, you need to become a different person than you are today and let go of whatever has held you back in the past.”
8. “The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.”
9. “The key to financial freedom and great wealth is a person’s ability or skill to convert earned income into passive income and/or portfolio income.”
Suze Orman Financial Freedom Quotes
1. “When you understand that your self-worth is not determined by your net-worth, then you’ll have financial freedom.”
2. “A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.”
Dave Ramsey Financial Freedom Quotes
1. “Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.”
2. “You must gain control over your money or the lack of it will forever control you.”
3. “I believe that through knowledge and discipline, financial peace is possible for all of us.”
4. “If you will make the sacrifices now that most people aren’t willing to make, later on you will be able to live as those folks will never be able to live.”
Jim Rohn Financial Freedom Quotes
1. “To become financially independent, you must turn part of your income into capital; turn capital into enterprise; turn enterprise into profit; turn a profit into an investment, and turn the investment into financial independence.”
2. “Formal education will make you a living; self-education will make you a fortune.”
3. “To become financially independent you must turn part of your income into capital; turn capital into enterprise; turn enterprise into profit; turn profit into investment, and turn investment into financial independence.”
4. “If you are not financially independent by the time you are forty or fifty, it doesn’t mean that you are living in the wrong country or at the wrong time. It simply means that you have the wrong plan.”
Other Inspirational Financial Freedom Quotes
1. “Pursuing your passion is fulfilling and leads to financial freedom” – Robert G. Allen
2. “Financial freedom is the power to produce wealth and not necessarily having wealth.” – Stephen Covey
3. “Your economic security does not lie in your job; it lies in your own power to produce – to think, to learn, to create, to adapt. That’s true financial independence. It’s not having wealth; it’s having the power to produce wealth.” – Stephen Covey
4. “Real wealth is not about money. Real wealth is: not having to go to meetings, not having to spend time with jerks, not being locked into status games, not feeling like you have to say ‘yes,’ not worrying about others claiming your time and energy. Real wealth is about freedom.” – James Clear
5. “Working because you want to and not because you have to is financial freedom.” – Tony Robbins
6. “You either master money, or, on some level, money masters you.” – Tony Robbins
7. “The secret to wealth is simple: Find a way to do more for others than anyone else does. Become more valuable. Do more. Give more. Be more. Serve more.” – Tony Robbins
8. “Money is a terrible master but an excellent servant.” – PT Barnum
9. “Financial fitness is not a pipe dream or a state of mind. It’s a reality if you are willing to pursue it and embrace it.” – Will Robinson
10. “Rich people believe ‘I create my life.’ Poor people believe ‘Life happens to me.'” – T. Harv Eker
11. “My definition of financial freedom is simple: it is the ability to live the lifestyle you desire without having to work or rely on anyone else for money.” – T. Harv Eker
12. “To get rich, you have to be making money while you’re asleep.” – David Bailey
13. “Wealth is the ability to fully experience life.” -Henry David Thoreau
14. “At least eighty percent of millionaires are self-made. That is, they started with nothing but ambition and energy, the same way most of us start.” – Brian Tracy
15. “Money is something we choose to trade our life energy for.” – Vicki Robin
16. “The goal isn’t more money. The goal is living life on your terms.” – Chris Brogan
17. “I don’t believe in spending money lavishly, now that I’m making money.” – Ansel Elgort
18. “If you’re saving, you’re succeeding.” – Steve Burkholder
19. “Financial planning and discipline is key to one’s financial freedom.” – Kishorkumar Balpalli
20. “Millions wish for financial freedom, but only those that make it a priority have millions.” – Oscar Auliq-Ice
21. “Whenever you find yourself on the side of the majority, it is time to pause and reflect.” – Mark Twain
22. “The speed of your success is limited only by your dedication and what you’re willing to sacrifice.” – Nathan W. Morris
23. “Every time you borrow money, you’re robbing your future self.” – Nathan W. Morris
24. “Financial security and independence are like a three-legged stool resting on savings, insurance, and investments.” – Brian Tracy
25. “The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.” – T.T. Munger
26. “The secret to creating lasting financial change is to decide to pay yourself first and then make it automatic.” – David Bach
27. “Financial peace of mind is not determined by how much we make, but is dependent upon how much we spend.” – Marvin J. Ashton
28. “Money won’t create success, the freedom to make it will.” – Nelson Mandela
29. “The best thing money can buy is financial freedom.” – Rob Berger
30. “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” – Joe Biden
31. “Too many people spend money they earned to buy things they don’t want to impress people that they don’t like.” – Will Rogers
32. “Whatever your income, always live below your means.” – Thomas J. Stanley
33. “You don’t need to raise money. You need to be smart and be focused.” – Mark Cuban
34. “Now I will tell thee an unusual truth about men and sons of men. It is this: That what each of us calls our ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary.” – George Samual Clason
35. “That man is richest whose pleasures are cheapest.” – Henry David Thoreau
36. “Wealth is not about having a lot of money; it’s about having a lot of options.” – Chris Rock
37. “Never depend on a single income. Make an investment to create a second source.” – Warren Buffett
Financial Freedom Tips
Financial freedom means having enough savings, investment, and cash to cater to your family’s needs. This means you can pursue what you want without necessarily being driven by a particular salary.
With the current economic conditions, most people are faced with emergencies, debts, and massive expenses that hinder us from attaining our life objectives. The good news is that you can achieve financial wellness by exercising certain habits. Below are some practices that will propel you to financial freedom.
1. Set A Life Goal
The first step is determining your life goal. What kind of lifestyle do you desire? The best practice is to write down how much money you plan to save. All these objectives must have a deadline. Setting financial mileposts at regular intervals helps you attain the ultimate goal.
Here is another crucial point. It is prudent that you write down your goals. Do you want to clear all your debts? Well, write that down. If your goal is to save for retirement, ensure you have that written down. Also, tie your plan to a specific number. Working towards a set target makes it easy to achieve a financial goal.
2. Understand Your Current Situation
Before you figure out how you will achieve financial freedom, you must understand your starting point. In other words, calculate savings and compile a list of your debts. Your savings include saving accounts, retirement plans, stocks, and your monthly payment.
Do not be demoralized by huge debts. Instead, develop a positive approach to how you view money. The biggest hurdle to making money is feeling like having it is bad. A negative view of money will subconsciously sabotage your chance of making it.
Money is more of a necessity, and you need it to achieve your dreams and help others.
3. Create A Budget And Adhere To It
Unregulated spending is one of the biggest threats to attaining financial freedom. You must create a monthly household spending plan and stick to it. A budget helps you live within your means by helping with saving money and paying bills on time. Without a clear budget, you risk becoming extravagant and recklessly wasteful.
A budget lists all your expenses and the amount of money you can allocate to each expense. When you become aware of how much you are spending, you can adjust your budget. For instance, instead of spending several dollars in the morning for breakfast, you can bring breakfast to work every morning and move the money you would have paid to your savings account.
4. Pay Yourself First
You have probably heard financial experts recommend that you “pay yourself first.” The whole idea is to put a specific amount in your savings account before paying bills and other expenses. If you develop a habit of paying yourself first, you will inch closer to financial freedom faster.
If the remaining amount is not enough to cover bills, you will be forced to get a second job or scale down on expenses. This helps to live within your means.
The good news is there are numerous ways to pay yourself first. For instance, you can have your employer deduct money directly and channel it into a retirement saving plan. This means you are prioritizing investing in your future. By paying yourself first, you budget for expenses and bills from the remaining amount.
5. Become Debt Free
Debt is the biggest stumbling block to financial freedom. For instance, credit card loans are among the worst kinds of loans and can attract up to 40 percent interest. According to National Public Radio, the total credit card debt of Americans is about $1 trillion.
If you are already in debt, develop a loan repayment strategy and put all of your extra money towards paying off your debt. Whenever you get cash in lump sums such as a bonus or money back from taxes, use this to make a significant impact on your total debt.
Paying your debts on time helps avoid sinking into more debt due to penalties and high default charges. After paying off a debt, you will feel like a massive weight has been lifted off your shoulders. You can sit back and watch your bank account grow.
Generally, taking out a loan makes other people rich. Avoid taking out new loans if you can avoid it. Loans such as mortgages and education tend to attract relatively lower interest rates. On the other hand, credit card loans can attract high-interest rates, which can drown you in more debts.
On the same note, you must monitor your credit. Credit reports determine the interest rate you get for car loans, credit card loans, mortgages, and insurance premiums.
Types Of Debt Repayment Plans
While paying off debts is not a glamorous undertaking, it pushes you closer to financial freedom. There are two ways to offset your debts, the Debt Avalanche and Debt Snowball methods. The Snowball method involves paying debts starting with the smallest. Avalanche methods involve paying debt with the highest interest rate first.
6. Save, Save, Save
Saving is quite a challenge for many people. If you have a problem with saving, consider registering for an employer-sponsored retirement plan. Your employer will automatically deduct part of your salary and move it into a retirement fund.
Going to retirement with debts makes it very hard to enjoy your golden years. Also, your earning potential reduces significantly after retirement. If you start saving early, compound interest will work in your favor, so you will be in a good financial position when you retire.
7. Start Investing Early
Investing is the best way to grow your wealth. Start investing as early as you can. You can start with small amounts and watch the power of compounding to grow your wealth. Ensure you use a goal-based approach when planning how much you want to invest.
This approach helps to determine the amount you will commit to investments in your monthly budget.
8. Live Within Your Means
One way of achieving financial freedom is living within your means and mastering a frugal lifestyle. Frugality means making prudent purchases and managing possessions responsibly. It does not necessarily mean taking a minimalistic approach to life. Spending less helps you put aside more money towards your financial freedom plan.
For instance, Warren Buffett still lives in the same house he bought in 1958 for $31,500!
9. Prepare For Uncertainties
According to Murphy’s law, anything that can happen will happen. This means that at some point in life, you will be faced with a financial downfall. Unforeseen expenses can derail your financial freedom objective. It is crucial to prepare for emergencies by getting medical insurance and creating a contingency fund.
A contingency find helps to cover unexpected expenses. The goal is to have enough money to cover between three and six months’ expenses in your contingency fund. In case of an emergency, you will not have to dig into your pocket.
While experts recommend having $10,000, you can always start with a goal you can afford, especially if you do not earn a lot of money. You can have your bank deduct and move the money before it hits your bank account.
An automated contribution to a retirement plan is an excellent idea because you will not be tempted to use the money for other expenses. This ensures you have some cash you can tap into in case of emergencies and unanticipated expenditures.
10. Medical Insurance
With the rising cost of healthcare, lack of medical insurance is a setback in achieving financial freedom. Heath bills can rise quite fast and deplete your savings. Luckily, health insurance caters to medical bills. You do not have to use your assets to offset hospital bills.
11. Create Extra Sources Of Income
If you desire to attain financial freedom, you need to go that extra mile. A nine-to-five job might not get the work done. Financial experts recommend having about seven sources of income. These additional sources of income can be either passive or active.
Some of the side jobs that can earn you active income include freelance writing, virtual assistance, and ridesharing. On the other hand, some passive income sources to boost your earning include dropshipping, trading forex, investing in stocks, and affiliate marketing.
Steps To Become Financially Free
1. Figure Out Your Financial Freedom Number
One of the vital steps in achieving financial freedom is determining the amount of money you require to become financially free. You can use the four percent rule discussed above. Financial freedom number is the amount of money you need to pursue your passions and live freely.
With your current earning, what should you do differently to attain your financial freedom number?
2. Address Financial Fear
Limiting beliefs about money can affect anyone. For instance, some people think they can never be wealthy because they were born into poverty. Do you believe you can’t be financially free because you are not smart or talented enough? Once you figure out your limiting fears, replace them using assuring and empowering beliefs that you can achieve financial freedom.
3. Take A Deep Look Into Your Finances
Financial problems will not disappear into thin air because you are earning more. You need to take a hard look into your finances and see the messes you need to clean up. For instance, do you have credit card loans that attract massive interest? If you have debts attracting high interest, most of your earning will go into offsetting the loans.
Here is a good idea. If you get a bonus, use the funds to pay off your debts. After clearing debts, you will have more disposable income every month and more peace of mind.
What It Really Means To Have Financial Freedom
1. You Do Not Live From Paycheck To Paycheck
Many people live from paycheck to paycheck, meaning they can’t cater for unforeseen situations. According to a US household Economic wellbeing report, 40 percent of American households do not have enough finances to cover $400 emergency expenses. Building an emergency fund is the first step towards financial freedom. These include paying off credit card debts.
2. Enjoy Life And Save
Earning enough income to do things you enjoy and save brings a sense of relief. If you have money to enjoy life and extra cash to save, you are most likely financially free.
3. You Can Afford To Quit Your Job (Temporarily)
When you are financially free, formal employment becomes an option. This means that you can decide to quit your job or take some time off without worrying about financial consequences. While you do not have to quit your job, it is a great relief knowing you can quit any time you desire.
When you attain financial freedom, you can afford a sabbatical leave or extended vacation in a foreign country.
4. Freedom Of Time
Financial independence and freedom of time go hand in hand. When you have financial freedom, you are not trapped in the rat race. This means you can afford to follow your passion and spend more time with your family without having to worry about running out of money.
5. Enough Funds To Retire Comfortably
Some people detest their jobs and, therefore, can’t wait to retire as soon as possible. Financial freedom means you have passive income streams to pay your expenses and retire comfortably. For instance, you may dream of traveling the world after retirement.
To be financially free, you should save enough money to support your retirement lifestyle.
Final Word
Without a doubt, everyone desires to achieve financial freedom. Achieving financial freedom means that your passive income streams to support your current lifestyle without working another day in your life. The good news is that you can attain financial freedom by developing a savings plan, investing early in life, and living within your means. Ultimately, you will be able to enjoy a life you have always desired.
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