THE PATHWAY TO FINANCIAL FREEDOM
SPEND LESS THAN YOU EARN
This is the first and greatest rule. None of these other money tips will help you if you cannot or will not spend less than you earn. This is commonly referred to as ‘to live within your means’. What does this look like? You make $100k, you might spend $50k and save the rest. You make $20k, you spend $15k and save the rest. In both scenarios, the individual is generating savings.
CREATE AN EMERGENCY FUND
The first goal you should be saving for is a well-capitalized emergency fund. An emergency fund is a fancy term for having money available for when those pesky unexpected expenses hit. The car breaks down? The house needs a new roof/furnace/windows? Your child needs to have braces and you have not yet hit your deductible? No worries, all of this is covered by your emergency fund.
SAVE OR INVEST THE REST
Each of us has special skills that we bring to this world. Your goal is to find out what those skills are and then capitalize on those skills. The idea is to find the point where “PASSION = POTENTIAL” and to pursue that idea until you have taken it to its full completion. This stage of the game is known as generating ‘Active Income’: income generation for which you trade hours in the day.
CAPITALIZE ON YOUR SKILLS AND START A SIDE ENDEAVOR
Each of us has special skills that we bring to this world. Your goal is to find out what those skills are and then capitalize on those skills. The idea is to find the point where “PASSION = POTENTIAL” and to pursue that idea until you have taken it to its full completion. This stage of the game is known as generating ‘Active Income’: income generation for which you trade hours in the day.
OWN INCOME GENERATING ASSETS THAT CREATE PASSIVE INCOME STREAMS
Once you have an emergency savings set up, you are diligently working to pay off debt, and you are in a financially stable place, your immediate goal is to build systems and buy assets that can make money for you. In this place we can get creative with our ideas: you could own real estate, stock vending machines, buy Lime or Bird scooters, sell ebooks and courses, or buy stocks that generate dividends. The ideas of how to generate passive income is limited only by your imagination and ability to work hard.
