This is why you’re not financially independent (yet)
Many people dream of having time and money freedom. Few achieve it. Why?
Researchers study and authors write books about it. It isn’t a lack of money for most.
We, as a country, make more than we’ve ever made. It certainly isn’t a lack of opportunity. America is the land of opportunity, after all.
So why can’t you quit your job without the fear of being homeless, broke, or ending up on someone’s couch?
The real reason is you lack the skills.
People who aren’t financially independent don’t keep a budget, have investments, and multiple streams of income.
If you’re going to be financially independent, there are skills you must learn to make that a reality.
Far too many people dream of financial independence and never reach it. I think we can do better.
The first is setting the numbers.
Whenever an anesthesiologist prepares for surgery, there are specific numbers and levels she must maintain for the patient to stay alive during the operation. One mistake, and it could be fatal. This lack of room for error is likely why there aren’t that many anesthesiologists and one reason they make a nice income.
To be financially independent you need to know 3 numbers,
- How much you want o have saved for retirement (whether or not you stop working)
- How much you want to have in all of your cash accounts (liquid accounts)
- How much you want to make per month as a regular income.
Once you get these numbers, write them down on a 3x5 index card (any dollar store, pharmacy, or supermarket will have it) and carry it with you everywhere. I blew it up and had it on my desk. I look at it daily, multiple times a day.
Once you know your numbers, then you need to devise a plan to get those three numbers within ten years. It does not have to (and should not frankly) take ten years, But you should set a time limit to meet all three goals.
In general, you want to make money to invest in multiple vehicles. You don’t get rich by working.
You get rich by investing.
These include (but not limited to) the stock market, real estate, and your businesses. Your business gives you the best return over time. Spread out your investments to have a vast portfolio.
Let’s say your goal is to have $1 million in retirement, $100,000 in all cash accounts, $20,000 a month in income. Remember, you can change these numbers down the line.
Imagine you are making the desired amount and work backward; You will need to find something you can sell over and over again; this can be consulting services, memberships, digital, and physical products.
Find the first vehicle to get to that primary goal of $20,000 a month if you sell $100 worth of consulting (or anything) per month, that is just 200 people.
You will need to invest money at some point to get this first goal. If you don’t have money to invest, then address your budget.
Most people spend their seed money at Starbucks or some other restaurant.
Nothing wrong with Starbucks, but use your profits to go there, not your seed.
Your work income is your seed. Use the money you get from your job to invest in your business. Invest $200 a month consistently, and the $20,000 a month will happen in no time. It is like clockwork.
Once you reach that $20,000 a month, start investing in getting that cash account amount. Real estate is great for this. Keep buying properties until you have $10,000 coming from just that.
Take that $10,000 and put it in a cash account. Once you reach $100,000 cash, it’s time to scale up your business to bring in more than $20,000 a month. Invest out of that cash account to hire more people to help you make $100,000 per month or more. Find more ways to invest, either buy more real estate to cash flow or invest stock for dividend income. Or scale the business even more.
Financial independence happens with practice and repetition; you will be surprised when you end up.
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