The other day someone messaged me and asked about financial freedom and what it means to me so I tweeted out that I would write up a blog on the subject because to me personally, it is a really simple topic. Nonetheless, I want to make a few pointers around my thinking and some other advice around finances that relate to “financial freedom”. Honestly, you could just google “key to financial freedom,” and you will get a load of results with lists, tips, and advice on finances and a large portion of the dispensed information is fantastic and definitely worth knowing. Yet, personally, financial freedom is one simple thing which I’ll dispense in a minute.
See most of us run the rat race and in the end, it really is all about the money. Whether you are content with more or with less depends on personal taste, status, belief, environment, and so forth. Now, don’t get me wrong when I say that it is all about the money. I believe greed is the root of a majority of evil (as “spiritual” as that may sound to some of you), and money is a large contributing factor along side our ever evolving “I” society.
Personally, it’s nice to “have” money. I won’t argue that. Who doesn’t want to be able to pay their bills, purchase everyday items and grant themselves some luxury from time to time? I bet most of you think along this same pattern. See, to me, financial freedom does not mean millions. It does not mean a successful career along with a high profile paying job. It does not mean fame nor continuous work.
I consider financial freedom to be one simple thing – the purchasing power of time. Time is your most valuable asset. You can have all the money in the world, but it’ll never buy you time. See I’d rather spend the day with my family, rather than sitting in meetings and linking my net worth per hour to a euro value, yet as life has it, a majority of us need to do so. A privileged few have the opportunity to enable that purchasing power of time because they have the financial means. Nonetheless, many of these people do not do so either. But that’s a side story.
Many years ago I received a book by a friend. The book was by Robert Kiyosaki and was titled “Rich Dad Poor Dad”. Now say what you will about Robert Kiyosaki, however that book enabled my pattern of thinking that lead to financial freedom. And it really is so simple.
A majority of people will tell you, that in order to be financially free and successfully you need to check off a list of several items and ensure you remain consistent with it and one day you will be able to be free of the rat race. Living the life of the so-called 1%. Now that may be true to a certain extent. I won’t argue hard work, managing finances correctly, saving, retirement funds, etc, – we do all that as well, yet the one thing that a majority of people lack to whom I speak to and our circle of family and friends includes everything from unskilled jobs to entrepreneurs to CEO’s of large companies is the one basic principle that will lead you to financial freedom and the ability to purchase time. This one thing is what makes the rich richer and the one thing you don’t learn in school.
It took me years to learn how to properly do it, what to do and how to do it. Again, lot’s of effort, hard work, blood, sweat, and tears went into this key aspect yet this is the only way to really achieve financial freedom. It’s not that 100K per year job. It’s not having multiple degrees from university. Or anything else. See, despite what you may think of the book, when I first got my hands on it Robert Kiyosaki helped me transform my mindset. I also had the thinking that the way I was conditioned in school and in our society to work hard and get a good job will allow me and my family to live a good life. Now that may be true but only to a certain extent. I’m still running the clock. In today’s world, this is far from true. You see what I took away with me was how rich people think. In the words of Kiyosaki himself, “The benefit of living in a free society is that we all have the choice to be rich, poor, or middle class. The decision is up to you.”
Now you may be wondering what that secret is? In his cash flow quadrant model, I saw one thing that stood out to me and has stuck with me ever since.
You need to be the “I” as in “Investor”. As everything else, employee, self-employed or business owner you will forever run the rat race. However, as an investor, you take money that you are making, sum it up and then invest into “something”. That could be stocks, bonds, real estate, etc. Things the provide a PASSIVE income source and generate revenue without you doing anything. That is what struck me years ago. The one sentence that I took away with me was this:
You become financially free when your passive income exceeds your expenses. This is how the rich get richer.
Look, I still grind a 9-5 job – who know’s how much longer :), but an abundance of our assets are in several areas that allow us to build for our kid’ future. Grind, make it a mindset and utilize financial wisdom to really understand what it means to be financially free. It’s not that CEO job. It’s not saving money for retirement. It’s all about creating passive income so you have an abundance of finances that in essence allow you to purchase “time”. So when people ask me, I tell them this sentence over and over again:
You need to figure out how you can make money while you are sleeping. Only then will you find financial freedom.
I could go on and on, however, I wanted to finally dispense that really simple idea. My point of view. My thinking and hope that it may help spur some thought on where you stand in regards to finances. Robert Kiyosaki taught me that several years ago and I hope that this basic outline gives you the motivation/inspiration to rethink your financial situation and what you can do to break free of the rat race. And when you do, remember to always give back! That is really important to my wife, me and our family. As I like to say to my siblings:
You hustle hard until you make it, then you keep hustling so you can help others who are still grinding.
That being said, I’d love to hear your thoughts on Facebook, in the comments below, on telegram or drop me a line. Also, sign up to my mailing list for more insight and motivation where I share insight on things I ddon’tshare here.