What does it mean to you to be financially free does it mean you have
the money to travel across the world and own the nicest cars or does it mean
having enough money coming in that you never have to work a nine-to-five job
again the reality is that Financial Freedom is different for everyone
however the one commonality is that it is something everyone aspires to now
this doesn't mean you should race to Financial Freedom to be able to step
away from your business or quit your nine-to-five job because for many these
are activities that bring them meaning in their lives however being financially
independent has its benefits and is a great goal to work towards and in this
video I will share with you seven simple steps to Achieve Financial Freedom and
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life-changing content before we get into the seven steps you must progress
through in order to become financially independent I think it's worth
highlighting a few of the benefits those who reach this financial Milestone enjoy
I want to share these benefits with you for two reasons first because the
journey to achieving Financial Freedom can be long knowing what awaits you at
the end of this Conquest will help keep your motivation High second it will give
you an idea as to whether this is a goal you even want to pursue therefore here
are three benefits of being financially free benefit number one less stress as
humans We crave a sense of security it dictates how we Act and the decisions we
make every day without that feeling we tend to regress into survival mode
leaving no time to accomplish what we truly want this in turn ramps up the
level of stress in our daily lives imagine how it feels to lift paycheck to
paycheck in a serious amount of debt and knowing that if you miss even one
paycheck you could be out on the street becoming wealthy isn't about having more
zeros in your bank account oftentimes it's about having a better mental state
and by knowing your bills are covered for the foreseeable future you'll be
able to reduce this mental burden and focus on more pressing matters benefit
number two control of your schedule when you're financially free you get to use
your time exactly how you want there's no getting up for work no dreaded
commute or useless meetings to attend when you are financially independent you
have the choice of how and when you want to work as such you can decide exactly
how to spend your time benefit number three ability to take risks
when you have Financial Freedom the world is quite literally open to you
some decide to get up and move to a different part of the country some end
up moving abroad not being Tethered to one location and job allows you to take
risks and Adventures in life essentially because money isn't a concern you can do
the things that those who are dependent on a paycheck simply cannot undertake
now that you know a few of the benefits that come with being financially free
it's time to walk you through the seven steps of Financial Freedom so you can
determine which Step you are currently at and what actions you need to take to
reach this lofty Financial milestone step 0 total dependence step 0 is the
opposite of financial Independence because in this stage you are completely
dependent on others at one point even the most successful and the richest of
millionaires were at the stage so don't feel bad if this is where you currently
reside with no means that no capacity to earn money we all depend on our parents
to provide for our needs when we're young and this is the most common
iteration of Step Zero however you're also at the step if you're spending more
than what you're earning you'll know you're here if you've been forced to
take out a payday loan a loan from the bank or borrow money from family and
friends to get by either way this suggests a dependency on something or
someone did Cover expenses you simply can't pay for step number one solvency
profit or savings come in once you're able to keep your expenses down to less
than what you're earning solvency is the first step in the surviving phase in
this stage you're able to meet all your financial commitments pay all your bills
and you don't rely on someone or something to help you cover your
expenses you still have loans but you're not adding anything new or more
importantly you can meet your payments every month if you're a student your
first step to solvency is to get a job that will allow you to earn enough so
you wouldn't have to depend on your parents for your Essentials if you're
already making some money achieving solvent C can entail getting a higher
paying job doubling your income stream or cutting down on your expenses if
you've been stuck in stage zero because the debt then one way to achieve
solvency is to renegotiate with your creditors for friendly or payment terms
or get a lower interest rate so you can still meet the required payment and
still have enough money left to cover all of your other bills step number two
Financial stability once you're able to consistently meet your financial
commitments have paid off some debts and you're able to keep your expenses down
then you can start saving this extra money can be your rainy day fund a cash
Reserve that you can turn to when an unexpected expense crops up ordinarily
in stages zero and one if you find yourself saddled with an emergency
expense the only choice is to borrow money take out a loan or fall behind on
paying your bills because you have to cover the emergency instead this
wouldn't be the case if you had some savings tucked away at this stage it's
still perfectly acceptable and normal to have some significant debts you might
still be paying your student loan or you might have a mortgage to settle every
month but you've paid off most of your Consumer Debt and there's no need to get
into more significant debt step 3 debt freedom I call step 3 the Dave Ramsey
step because Dave is a huge proponent of living debt free even at the expense of
Greater returns he preaches the prioritization of debt repayment and
when you've Advanced beyond the state page you'll be doing good by Dave you
see at this point you've established enough stability in your expenses and
managed to start setting aside money for an emergency fund since you've paid off
your consumer debts the next step is to start working through the higher
interest major ones settling even one high interest loan can mean one less
item to worry about and added savings for you this means working to pay off
any debt on investment a student loan or the mortgage on your car or house in
this stage you have enough money and means not just to survive but also to
start thriving you don't live a hand-to-mouth existence you have cash
reserves that can be a good fallback on during an emergency and you're almost
debt free this is when the value money is more than just a safety net and is
now a tool to help you create a much better more comfortable life you can
start to use your money for investing purposes
step 4 Financial Security this stage highlights the value of a good
investment if you've been saving money consistently somewhere between steps two
and four then you've put some of your money into worthwhile Investments that
can deliver short medium and long-term returns in this stage you should be able
to enjoy the benefits of those Investments if your investment income is
adequate to cover your basic major living expenses such as housing food
utilities and transportation then you've reached the stage of Financial Security
this doesn't necessarily mean you can quit your job the basic idea is that if
for example you spend about a thousand dollars every month for these living
expenses then you have more than enough savings or income from your Investments
to cover this monthly a thousand dollar cost for the rest of your life this
doesn't cover expenses on the miscellaneous stuff the small comforts
you allow yourself and that's why you still need the income from your job
step 5 Financial Independence between step four and five you continue earning
money and you're saving and investing more of it until at some point your
investment earnings are enough to cover your current lifestyle this means your
investment income is sufficient to pay for your necessary expenses and other
miscellaneous ones too for the rest of your life this is when you can now say
that it's okay to quit your job and go country hopping and not worry about your
expenses both in the present and the future there is no set or specific
amount that lets you know you've achieved Financial Independence because
Lifestyles vary a simple man can say that twenty thousand dollars is more
than enough to cover anything he would need every year for the rest of his life
but another person may need fifty thousand or eighty thousand dollars to
cover their basic lifestyle needs and the occasional holiday abroad step
number six Financial abundance the Lost age in the Continuum is a point where
you have enough for your lifestyle both the basic and the Comforts and then
still have some more the that you can use on other things you have enough
Surplus from your passive income that you can use it to invest in more
business buy more houses donate to a charity or even start one in this stage
we're not just talking about smart money management but smart Asset Management
how do you control these passive assets how do you allocate the income from
these different Investments who are the people who will benefit from these
assets and Investments at a later time how will they be divided or distributed
to your family and loved ones these are all things you can consider if you've
reached Financial abundance now I want to share some quote hard truth about
becoming financially free and the seven steps I just mentioned for most people
Financial Independence is seen as the end goal and they give little attention
to the other stages before it this view turns Financial Freedom into a mirage an
Impossible Dream a financial unicorn because it's seen as almost too good to
be possible a lot of people just end up somewhere around steps two and three or
sometimes four and never try to move Beyond these stages
but by thinking of financial Independence as part of a Continuum the
goal becomes much more achievable and realistic it also makes the journey less
challenging and less frustrating you don't have to get stuck or Worse choose
to be stuck in just stage one if you can manage to do away with your credit card
debt that's great then you can focus on saving five percent of your income this
month but later in the year you can try to bump it up to ten percent by next
year you can start working to pay off your student loan the point is that each
and every action no matter how small becomes a crucial stepping Point closer
to the end of the Continuum these stages of financial Independence also lead you
down a path to a basic and essential part of smart money management which is
making investments from sages four to six work and income from your job take a
back seat you are not relying on your paycheck to cover your basic expenses
and you've turned your attention to building and managing your Investments
every penny saved and every debt or loan settled are steps that will take you
closer to the goals near the freedom hate it looks like a YouTube thinks this
next video is the one that will change your financial life forever give it a
watch and let's see if they're right