Real talk: people who say “money can’t buy happiness” are lying.
Sure, money isn’t everything. But even our relationships — friends, family, coworkers —can be helped or hurt by financial situations. No shocker here, but money disagreements account for a large portion of divorces.
Is there any aspect of your life that wouldn’t be made easier if money was not a problem?
If so, I want to hear it, comment below! So how does this relate to freedom?
Creating financial freedom liberates your entire life.
I’m serious, think about it. If you planned out your financial actions in such a way that at a certain point you no longer had to worry about a steady income, how would that feel? Freaking fantastic!
- I’m not saying you need to become super rich,
- Or that you’d have to quit working,
- Or that you have to give up fun spending in the now.
What I’m saying is, you wouldn’t have to keep working for a paycheck — which is why some people fundamentally hate their jobs but do nothing about. They need the income.
You would have the freedom to do whatever.
You can finally be whatever you want to be “when you grow up” because you aren’t dependent on a job:
- Maybe you want to be a firefighter or a teacher but needed a higher income to support a large family.
- Perhaps you want to start a video travel blog with no guaranteed income.
- Maybe you don’t want to work.
- Or you want to work, but want the freedom to be picky, rather than taking the first job that comes along.
Financial freedom = freedom of choices.
If you can already pay all the bills without working, what is there left to stress about?
So that leaves us with the how.
Here is the formula to financial freedom that breaks the “normal” work-then-die life scheme:
- Spend far less now so that you can
- Invest early and heavily to
- Turn that into a constant income once you are ready for freedom
Here is just one simplified example of how you could accomplish this (though this isn’t necessarily the best path for everyone):
- Invest $1000 a month into a total stock market fund (Not sure how? Keep reading)
- This money will grow, based on historic averages, 9.5% a year over time
- In 15 years, it grows to about $400,000 (you contributed only $180,000)
- Move that money to a less risky, balanced mutual fund (balanced = mix of stocks and bonds — less flutuations and risk with lower earnings)
- This “freedom fund” earns, based on historic averages, 6.5% a year over time
- Withdraw 6.5% a year as income: about $25,000 a year
$25,000 a year. Without working. Can you say DAYUM?
- If 15 years seems too long, find a way to contribute even more. $1,500 a month would get you to the same income in just 12 years.
- If $25,000 seems too low, just keep going a few more years. Waiting 5 more years would get you to almost $46,000 a year.
- If a stock fund seems too risky for you, use a balanced fund. It will only take 3 more years to achieve the same $400,000.
If you’re response is: I can’t do $1000 a month, my response is: you can if try.
Want to learn more about managing the money you already make and how to get started investing? Check out my new course. For the cost of two burritos you could set yourself up to financial freedom.
Do you want to work for money forever or do you want to create your own freedom? Join me in this extraordinary challenge!