Some of you may be thinking, well, what is financial freedom?
When preparing to write this blog, I came across literally hundreds of ‘definitions’ of what others say financial freedom is.
Often there is a misconception that having a lot of money gives you financial freedom, but while it is wonderful to have an abundance of income or wealth, there are people who are in this position, who are not happy. On the other side of the coin, there are people with a modest income and home who consider themselves financially free. So you see, financial freedom is more than money.
Financial freedom means different things to different people. Some people may want to travel the world and in order to do so, sell all their possessions and travel! To them, they are financially free to do whatever they want. Another person may want to work from home so that he/she can see the family more frequently. Already, just with two examples, you can see that there are so many different ways to have financial freedom. How you define it is up to you.
As far as I’m concerned, financial freedom is the ability to do what I love, be my own boss, work from home or anywhere I choose, and have the freedom to live life as I choose. I have a vision, and financial freedom certainly plays a major role in the success of that vision.
What does it mean to you?
I want you to think about this question. It may take some time for you to answer it clearly and honestly. But, if you are able to define what financial freedom means to you, it may remove the stress of not knowing your ‘path’.
Many people seem to trudge along not really knowing what they are striving for, and more times than not, lose focus and fall back into the same rut they have always been in.
Most people (myself included) that I have spoken to, want financial freedom because it allows them to build or maintain their lifestyles with little or no further work. There are many ways to become financially free, and the following explanations for financial freedom are easy to relate to.
• When you hear of someone being referred to as ‘financially free’, it often means that person has significant income or savings, and of course, the peace of mind and satisfaction of being able to do what he/she wants, when he/she wants to do it.
• Financial freedom contributes to a greater sense of overall freedom—that is, being able to enjoy and live on your own terms. Financial pressure as many of us may have experienced, can cause anguish, stress, worry and additional strain on relationships.
• Financial freedom eliminates or reduces those negative consequences.
Types of Financial Freedom
This is where it gets more interesting. Total financial freedom means not having to work, and can come in various forms:
1. High net worth. This is when a person has sufficient money in savings and investments to maintain his/her lifestyle without working, or working very little. The term “high” is relative since people choose different lifestyles.
2. Passive or Residual Income. This is income that occurs over time from work done one time. For example, an insurance agent who gets commission every year when a customer renews their policy. A network marketing or direct sales representative’s income from his/her direct customers when they reorder every month, or a author who sells the book in e-book format on the internet. These ‘royalties or commission’ can provide income for years and even decades, allowing the person to have freedom to pursue other activities while still receiving an income.
3. Leveraged Income. Leveraged income leverages the work of other people to create income for you. Some examples include:
• An e-book author selling her e-book through affiliates who promote the product
• A network marketer who builds a downline and receives commissions on the sales made by people in his/her downline
• Franchising your business model to other entrepreneurs.
Of course, there are many different models in many different businesses. It should be noted that leveraged income may or may not also be residual income, but when you combine them, well, that’s even better!
Passive income is a great way to get onto the road to financial freedom. Some businesses may require more work than others, but the return on your time and minimal investment can pay off for years to come. You can have a secure financial future for you and/or you and your family.
What do you want?
• Do you want to continue working for someone else?
• Do you want to continue working 50, 70 or more hours a week for the rest of your life, or until you are not able to work anymore?
• Do you want to be able to take time off whenever you want to, without worrying about what’s going to happen to your business ? (if you are working for someone else, you don’t need to worry about this – your time belongs to your boss!)
• Do you want to choose your retirement date?
• Achieve freedom, income and lifestyle?
Now is the time to think about what financial freedom means to you, and your family.
Are you ready to look further than what you are doing now?
The sooner you answer these questions, the sooner you will have financial and personal freedom .
Just remember, you are not alone. I know many of my friends grapple with the same questions. I did, quite some time ago, and thankfully, could identify what my idea of financial freedom was, and found a business that works great for me. The business model I work with combines both passive and leverage income – with amazing results. (and no it’s definitely not a ‘quick rich scheme’) If you find one of those, let me know!
I am happy to share my experience with you if you are happy to listen.
Just connect with me and provide me with your details, and we can have a friendly chat together.
Did this help you? If so, I would greatly appreciate if you commented below and shared on Facebook. Thanks ☺
Leigh Rachow at My Lifestyle Choices
‘You have residual bills. Why not have residual income?’