Can money really buy happiness?
It can’t completely, but if used correctly it can buy you freedom. It’s safe to say that most people strive to make a lot of money. However, not everyone wants to earn the same amount of money since it depends on their desired lifestyle.
Regardless of the amount of money you want to earn you have to consider how much is actually enough.
If you have no financial goals then you’ll never have enough money, and if you have poor money management skills you’ll always end up wasting most of it. There has to be a balance, but for you to stay motivated you’ll need to know how much money is enough.
Defining Financial Freedom
Financial freedom is unique to everyone, but it has a similar goal in mind. That is to feel confident about your personal finances and to live a fulfilled life. I believe that someone is considered financial independent once they can generate enough passive income to cover all expenses with enough money left over to save.
The goal isn’t to make a lot of money and become a couch potato. However, you’ll want to build multiple income streams that generate a consistent amount of money each month. This type of income is considered passive because it’s generated each month with or without your effort.
Don’t get it twisted. Only because the money is generated without your effort doesn’t mean that you won’t work at all. You’ll have to work extremely hard to build this type of income, but it’s worth the effort.
The first step is to calculate the amount of money you’ll require each month to continue living your desired lifestyle.
An easy to way to calculate this is by reviewing your past 6 months’ expenses, and then multiply them by 15% for an extra cushion. For example, if you’ve discovered that you spend approximately $3,000 on average each month you’ll then multiply this amount by 15%. The number you should shoot for is now $3,450.
There are many different methods you can use to start generating passive income. You can invest in real estate properties, start an online business, or invest your money in different types of mutual funds. You’ll have to get creative and choose a method that you’re passionate about to increase your chances in achieving your financial goals.
A few decades ago it was common to work for one company and expect to retire with enough income to cover most of your expenses.
The times have changed, and these types of benefits are no longer reliable. It’s up to you to create a brighter future.
It won’t be easy, but the first step is to control your money management habits. This is crucial because regardless of the amount of income you generate it will be poorly spent if it’s not properly managed. As you create better money management habits you’ll grind extremely hard to achieve your freedom number.
Your freedom number is the number that you’ll require each month to cover all of your expenses while still having enough left over to save. It’s almost like working backward from the old way of retirement. Instead of waiting for a steady paycheck each month you’ll create it.
Summing It Up
Financial freedom can be interpreted many different ways.
Some may consider themselves financially free because they have 0 debt, while others require a specific amount of wealth saved up. I believe that if you’re always working for money then you’re not financially free.
We should leverage money to work for us as much as possible. This will enable us to spend our time strategizing different ways to generate more income and to spend more time with the people we love.
Sometimes we are led to believe that we need to be millionaires to live the lives we want. You may be surprised at the amount of money you truly need to live a fulfilled life once you calculate your freedom number.
Becoming financially free will allow you to work wherever you’d like, and around your desired schedule. This is the true power of money in my opinion.
Maybe working in a physical office for a large company makes you come alive and that’s ok. As long as you’re investing your money and creating multiple streams of revenue you’re creating a brighter financial future.
I personally would choose to work remotely and to get paid running a business I’m proud of. While I’m not there yet I work every day to get closer towards my goal.
It’s never too late to start creating a better future. I’m learning different money habits and strategies daily.
I challenge you to define your freedom number and to set micro-goals that will help you get there. Begin by firsts mastering great money management habits, and create a financial goal to work towards to.
If you’re clueless to where to start, consider reading “The Total Money Makeover” By Dave Ramsey. I recently finished reading this book, and I learned a lot of great advice. Some of the lessons you’ll learn from this book are the obstacles holding you back from becoming wealthy, and how you should allocate your stock portfolio. You’ll also learn the strategy behind saving up for your child’s college funds, and so much more.
Don’t become overwhelmed with information, and start taking action immediately.
Sometimes I’ve found myself reading 1 finance book and immediately started reading a new book. It’s easy to fall into the curse of knowledge trap. We may think that we don’t know enough, but the truth is we know enough to start.
Don’t wait to become an expert in finance to invest in the stock market, or to create better money management habits. Start today, and learn from your mistakes.
I know that you’ll succeed in becoming wealthy if you want it bad enough.