Imagine what life would be like if you knew you didn’t have to work anymore. Imagine if you could lye on a beach all day and not worry about working because all your bills are being paid for. Imagine what it could be like if you had a continuous stream of income that pays for all your bills?
This my friend is what it’s like to be financially independent.
It’s complete financial freedom. You are free to quit your day job that you probably dislike and do whatever you want to do during the day. You could pursue your interests such as write that book, start that new hobby, start a business and so forth.
Being financially free is the holy grail of the ultimate lifestyle. Millions dream of this kind of lifestyle, however there are certain beliefs of this lifestyle that needs to be addressed.
For example, many people think that by being financially independent, it means that you drive nice cars, live in expensive mansions and live the rockstar lifestyle, unfortunately it’s far from it.
The people who achieve financial independence are people who are very good with managing their money, they are frugal and they know how to be very productive with their time in building their own passive income stream.
I’ll explain to you the common characteristics of financially independent people.
Common Characteristics Of Being Financially Independent
After researching, studying and interviewing many people who are financially independent, I have discovered the following key characteristics about being financially independent.
- Frugality. The first characteristic of financially independent people is that they are very frugal with money. They understand the importance of current spending over future spendings. Of course, they still buy the usual Starbucks and basic entertainments and luxuries, however they never submit to impulse purchases of expensive clothing or goods even though they have the cash to purchase it many times over. They are responsible with money and they think about their purchases very well.
- Time management. They are excellent with managing their time. Because they may have a job or business as their active source of income, they invest their life over time in seeking passive income opportunities. They are usually seen working late into the night on some passive income project. Whether they are looking for passive income real estate properties, internet businesses or passive income projects, they are working away.
- Value freedom over norms. Being financially free without having to work for money is their primary importance. They strive towards this goal on a continual basis every single day for many years. Once person once said that saving a portion of their income first is more important than their kid’s clothes. The reason is because they know that by purchasing something now, they miss an opportunity in future. By not purchasing things now, they can give the gift of freedom to their kids and family instead.
- Stewards of Money. They are excellent with managing their money. They know all their expenses, how much is being spent each week and they know the numbers. They usually work on their budgets regularly and continually optimize it to improve their financial position. Budgeting and managing cash is one of their core skills that make them excel above the rest.
- Long Term Visions. These people see everything in the long term. By working hard today at their passive income projects mean they can rest tomorrow because they know that one day they can not work. While their friends are out having fun, they are working away on their projects, getting better and getting smarter.
A Simple Example Of Financial Independence
Let’s say that you are currently earning $1,000 per week.
Your total expenses is $800 per week. This is including electricity, water, house, groceries, everything.
In order to be financially independent, you would need to find a money making machine that works without you that would pay for your expenses per week which is $800.
So far, you need a job or a business to pay for your expenses per week.
In order for you to be financially free, you would need to find a money making machine that pays you $800 per week without you working.
That’s the goal of financial independence, it’s the ability to cover your expenses without you working.
The kicker is that people’s lifestyles are different and their expenses vary according to their position in life. A doctor who owns a mansion has a lot more bills to pay than a person who earns a lot less and living in a smaller house.
If you were in this situation, the first thing you could do is begin trimming down your expenses and you make it $700 per week. By doing this, you’re making the road to financial independence a lot easier and a lot faster.
The lower your expenses, the easier and faster you can achieve financial independence.
3 Steps To Achieve Financial Independence
The steps to achieving financial independence is minimal, however it requires determination, patience and drive for many years in order to achieve this goal. You must be a hard worker and not believe in quick fixes.
People who achieve financial independence thought about their goals for many years and also tried so many opportunities along the way. They often failed and even lost a lot of money in the process but also learnt a lot too.
As you are on your journey to financial independence, you’ll come across many obstacles and set backs, don’t let this happen to you, just take it slow and keep moving forward.
Okay, so here are the steps to achieving financial independence.
Step 1. Figure out your expenses.
The most important part of this equation is to find out how much your living expenses are. You need to find out how much you need to survive on a weekly basis. Don’t include lavish lifestyles and add extra things you want, you need to list the very basic things that you absolutely need to survive and live comfortably.
Step 2. Look for opportunities.
The next step is to find as many opportunities as possible that generate passive income, income that you don’t need to work for. There are so many passive income opportunities out there, it’s up to you to find them and pick the one that suits you.
Step 3. Work on those opportunities.
Once you’ve picked your opportunity, this is where you need to work hard at it every single day. You need to invest your extra time into these projects and try and make your first $1 in passive income. If you do achieve making $1 in passive income, your next step is to make it $2, then $3 etc. Step 3 is the hardest and most frustrating part of achieving financial independence because it requires so much time and effort to make something work. You’ll most likely come across several dummies in order to find the gold nugget that works for you.
How A Single Mother Achieved Financial Independence
I once listened to an interview by a famous real estate investor who achieved financial independence.
She told the story of how she was broke and wasn’t getting anywhere in life. She divorced and had to take care of her 3 kids. She struggled with money and slept on a mattress in a broken house.
She broke down in tears and contemplated suicide.
One day she decided to turn things around and she realized that if she was to make a change, it would be up to her, no one else.
So she went to the library and sat there and started reading books on how to make money. She read many books on making money in different businesses and opportunities. She also read books on real estate and how to find properties with no money down. She learnt all she could about generating passive income through real estate.
She began her journey and started working through all the opportunities.
Years later, she was financially independent.
The host asked her one tip she could give that would help anyone achieve financial independence.
She said the following…
“You must view opportunities like a deck of cards. Your winning opportunity is a joker card. You need to flick through the entire pack until you reach that joker card. That’s the attitude you must have in order to achieve financial independence, keep flicking through the pack until you find that joker.”