In several areas on this site I have discussed financial freedom or financial independence, most importantly Financial Freedom, A Successful Financial Independence Plan.
If you have not explored the Law of Financial Freedom, this is a good time to think about it. When correctly viewed it can make a tremendous difference in our lives.
Action Step to Develop Financial Independence
This article is designed as an action step focused on developing your understanding of financial freedom, especially as it might be possible for your life. It will help you understand what it would take for you to experience financial freedom personally.
NOTE:
One way to develop understanding of any topic is to write out our thoughts about a subject and is that is what I will suggest here. This action step requires only a piece of paper, a pencil, and some reflection.
This is a simple process but it can help you to develop a new perspective on your life and your financial goals. Writing clarifies your thoughts and getting clarity about your financial goals can make a dramatic difference in your life.
For most people financial independence seems to be an abstract and fanciful thought with little meaning in the way of a real or tangible goal. But it can indeed be a reality for those who pursue it.
Minimum Requirement for Financial Freedom
The most dynamic truth about financial independence is that real financial freedom is not dependent on great riches. When you get a minimum specific amount of income in mind instead of a vague idea your whole perspective will change.
Financial freedom comes from managing our affairs so that we have enough passive income to meet our needs without requiring us to hold down a regular job to provide for our income. But how much is that?
Think about what you really need in order to live happily. Do you really need to live in a multi-million dollar home or would you be just as happy living in a smaller home with far less upkeep?
Do you really need to spend a lot of time traveling the world or would you be happier with occasional vacation trips and more time spent in your garden, reading, visiting with friends, or helping with some humanitarian project?
Write out your thoughts. Figure out how much income you would need to live that life. It may not take as much money to live an independent, happy life as you expected.
Make Financial Independence Easier
List ways you could reduce your cost of living (eliminate debts, reduce clutter like extra cars, etc.). Then reduce your cost of living required by those unnecessary expenses.
As you reduce your essential expenses you make your personal financial independence a less challenging goal. It is beginning to look more like a real potential now isn’t it.
Finally, think about ways to develop passive income sufficient to meet this required income. You may need to do a little work (read about and study) on the idea of passive income and come back to this step later.
There are many ways to provide for the money you need. The most common are financial investments like an IRA. Others include investments like real estate rentals (these are “passive” only when they are managed by someone else for you).
Your understanding of what real financial freedom is all about begins to take shape as you focus in on some real numbers for expenses and income. When you understand how financial independence can be real for you in your own real life you be able to take steps to achieve it.
Commit to Personal Financial Freedom
When you put these thoughts to paper they begin to help shape your life in the right direction. Save your work and come back to it over and over. Keep making adjustments and additions. Think about ways to make it happen sooner rather than later.
Let these thoughts about financial freedom become a driving force in your life. It can change your future and that of your family dramatically and lead to making financial independence more than just a dream.
