Financial Freedom in a Few Simple Steps

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1) Define your Dream Life.

The very first step to obtaining financial freedom is to define what, exactly, it means to you. For some, it is millions of dollars in the bank. For others, it is the ability to walk away from the JOB, and for other's still it is the time freedom to pursue a deeper calling our purpose.

Take a moment and dream of a life with no contraints. What do I mean by that? Don't let your thoughts be confined by your current income or how many hours you are required to work. Take away those financial restrictions and the time requirements for a few minutes and dream a little.

One of our favorite family activities is to read novels out loud. On a recent road trip, my husband was reading a young adult fantasy novel out loud as I drove. The characters in this novel were having extended adventures and got caught up in a cause they care deeply about. They traveled when they need to travel, fought when they needed to fight, and made decisions based on their desires and passions. They were completely free of the time restraints of a job and the they never held back because of lack of funds. In fact, I don't think money was ever even mentioned in the book. As I was driving down the highway, I was inspired to think of my life as if I was in a novel.

When we first got started on the path of financial freedom, we spent a lot of time dreaming and brainstorming with each other. Eventually, we settled on a picture of our ‘dream life.’ I encourage you to take some time with loved ones to dream of a life without restrictions. Here are some questions to get you started.

As you answer these questions, don’t be restricted by the restraint of time or money. Keep them out of the equation. Imagine you are living in a novel.

• What does your dream day look like? Does each day look the same, or are they different?
• How often would you travel if you had unlimited funds and time available to you? What are some of your dream trips?
• Where would you live?
• What are you interested in learning about.
• What are you interested in doing (become a pilot, write a novel, learn Italian)
• Describe your ideal home and family atmosphere.
• If you had unlimited money and time, how would you give back?
• What kind of legacy do you want to leave?

What is your dream life? Let us know!

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2) Get Specific.

Now that you have taken some time to dream, let’s put some numbers to the idea. How much will this dream life cost? Make yourself a ‘dream budget.’ Write out your real budget on a sheet of paper, or print it out. (You do have a real life budget, right?) Then, go down each line item and make your dream changes. Remember, don’t worry about your real life financial obstacles. How much will your mortgage payment be? How much money each year will you spend on travel? How much money will you want to earmark for a charity or a cause? How much play money will you want access to each month, in addition to your monthly obligations? Once you have your monthly number, multiply it by 12 to determine your Target Annual Income (TAI). Write it down.

In addition to defining your TAI, set a timeframe. How long do you want this to take? 3 years? 5 years? 10 years? Decide now. Set a date. Write that down too. (Don't let that little voice in your head convince you it will take 32 years).

Now, your ultimate goal is freedom from the JOB. This means, you need passive income. We will get to that later, but for now lets focus on the numbers. For the purpose of this exercise, let’s use an interest rate of 7%. Later, we can explore different investment vehicles, and you can change this return as you choose, but for now, lets go with 7%.

We will use this number to figure out what your Target Net Worth (TNW) is. Get out the calculator and do the calculation:

Target Annual Income / .07 = Target Net Worth

You now have your TNW. Take a deep breath and, yes, write it down!

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3) Realize that it is Realistic!

Now you have: A target lifestyle, A Target Income, and A Target Net Worth. Do you believe it is possible? Do you believe it is obtainable? This is easier said then done, I know. I’ve been through it too. For us, this happened gradually; over a period of years. But I can tell you, it is imperative to believe it is possible. If you don’t integrate this belief and this feeling into your life, it will be impossible to create your dream. This step is very similar to step 1. Get rid of your limiting beliefs. I am going to make some statements, and I want you to pay attention to your gut reaction as you read them.

• It is possible to earn 200% on your money per year.
• It is possible to create money (and no, I’m not talking about counterfeit) out of nothing.
• It is possible to retire five years from today, regardless of your age or your current net worth.
• It is possible to live a life without the constraints of a job.

How did this exercise go for you? Was your first impulse to mumble under your breath ‘impossible.’

If so, spend some time paying attention to all those thoughts that run through your head every day. When you notice negative language in your thinking, take some time to intentionally think in a different way. It takes a while to break a habit, but once you do, you will start to notice a difference in your life!

Final 3 Steps Coming Soon....

[Pau]

Hi, nice, but how about the final 3 steps?

[Pau]

I've come to think that having goals and dreaming about them is great, but it doesn't really get you anywhere until you learn to think and work "out of the box", in way to bring you money.

Everyone has dreams and goals, but very little people act on them.