Change your life. If you want something different, you are going to have to do something different.

It has never been easier to make more money, manage your own money, and live a life financially free from the typical nine-to-five. It would take an early start to saving and log term investing gives your money more time to grow over time.

Many people dream of being free from the rat race and desire to spend their time indulging in leisure, volunteering, hobbies and traveling.

The concept of your ‘number’ (the money you need to have to be financial free). Your number is the amount of money that you need to have invested so that you can live off the income from your investments for the rest of your life.

Net worth is the most important number in personal finance and represents your financial scorecard. Your net worth includes your investments, but it also includes other assets that might not generate income for you.

“Spending money to show people how much money you have is the fastest way to have less money-” Morgan Housel

Financial freedom means different things to different people, and different people need vastly different amounts of wealth to feel financially free. Maybe financial freedom means being debt-free, or having more time to spend with your family, or being able to quit corporate America, or having $5,000 a month in passive income, or making enough money to work from your laptop anywhere in the world, or having enough money so you never have to work another day in your life.

Ultimately, the amount you need comes down to the life you want to live, where you want to live it, what you value, and what brings you joy. Joy is defined as a feeling of great pleasure and happiness caused by something exceptionally good, satisfying, or delightful—aka “The Good Life.”

It is worth clearly articulating what the different levels of financial freedom mean. Grant Sabatier’s book, Financial Freedom: A Proven Path to All the Money You’ll Ever Need, states that there are Seven Levels of Financial Freedom, which are:

1. Clarity, when you figure out where you are financially (net worth and cash flow) and where you want to go
2. Self-sufficiency, when you earn enough money to cover your expenses
3. Breathing room, when you escape living paycheck to paycheck
4. Stability, when you have six months of living expenses saved and bad debt, like credit card debt, repaid
5. Flexibility, when you have at least two years of living expenses invested
6. Financial independence, when you can live off the income generated by your investments and work becomes optional
7. Abundant wealth, when you have more money than you’ll ever need

Trading your time for money, you can make only so much money because you have a limited amount of time. There’s risk in any investment and your full-time job is an investment of your time. Even if you make a high salary, it’s still worth diversifying your income streams so you can walk away from your nine-to-five if you ever determine it’s not worth it.

Income from investments is the ultimate passive income. It is the main strategy the wealthy use to accumulate wealth and achieve financial freedom. By diversifying your income streams, consistently looking for new ways to make more money, and investing as much money as possible as early as possible.

Building wealth relies on four basic principles:

1. Savings rate: Your savings rate is directly correlated with the amount of time it will take you to hit your number. The higher your “savings rate,” the faster you can retire. Saving a high percent of your income might sound challenging for most people, but if you are willing to make both saving and making more money a priority, it’s possible. “It’s not about deprivation, it’s about optimization.” For every 1 percent more you save will decrease the amount of time you’ll need to work to reach financial independence.
2. Enterprise mindset: Purchase assets that appreciate and generate income. To make as much money as possible, you want to combine and maximize as many moneymaking strategies as possible. The wealthy look at money not as a fungible tool that can be used for any purpose. Focus on making as much money as possible per minute and hour of their time. There are four general types of ways to make money:
   1. Full-time employment—working for someone else.
   2. Side hustling—making money on the side.
   3. Entrepreneurship—scaling your side hustle and/or,
   4. Making it your full-time job Investing—growing your money in the market
3. Maximized the value of your time through a combination of personal finance, entrepreneurship, and investing. Find a side hustle: Investing is the ultimate passive income, and this is the main strategy the wealthy use to both get rich and stay rich. Multiple income streams give you options, flexibility, and more control.
4. Spending less than you earn and learning to contently live with less has the same effect as growing your income and increasing your feeling of being wealthy. And it’s easier and more in your control. The price of building wealth isn’t just the trouble of earning money; it’s avoiding the post-earnings urge to spend what you’ve accumulated.

Earning more will do little for building wealth if every extra dollar is offset by a dollar plus of new spending. Thus, wealth, at every income level, has less to do with your increased earnings and more to do with your ability to leave the increased earnings alone and save more.

“Wealth is what you don’t spend.” Morgan Housel

References:

1. https://www.reading.guru/financial-freedom-by-grant-sabatier/
2. https://millennialmoney.com/wp-content/uploads/2019/02/Financial-Freedom-Grant-Sabatier.pdf
3. https://www.collaborativefund.com/blog/gains/