Tuesday, March 8, 2016

Financial Freedom


What is Financial Freedom?

The key to financial freedom is understanding what it is for you. Clarity about what financial freedom for you is the first thing you need to know to achieved it. Let me share with you what I've learned in Millionaire Mind Intensive as the definition of financial freedom. According to T. Harv Eker, Financial Freedom is the ability to live the lifestyle you desire without have to work or depend on anyone else for money.

With this clarity we can now identify what we need to do to be financially free. Income without work is called Passive Income. Yes there is such thing as income without work. We can now say that to be financially free you need a passive income that is greater than your expenses. 

Earning Passive Income

1. Investment Passive Income
Interest income on your money investment. This is money working for you or money creating more money. Popular investment passive income are special bank deposits, mutual funds, unit investment trust fund, stock market investing & trading.

2. Business Passive Income
Business income that does not require too much of your time. This is money & people working for you. Here it is not money working for you but your creativity makes money for you. Popular sample of business passive income is Vending machines operator, Real Estate with positive cash flow, franchising if you are the franchisor because you earn royalty income, same for authors, internet marketing if it is on auto pilot, Network Marketing if you have a system that creates you passive income.

Managing your Money (LIFESTYLE)

Once you have created multiple streams of passive income. It is of equal important to manage it properly to ensure it is aligned to your goal of achieving financial freedom. Millionaire Mind Intensive Money Jar Management System is perfect for this. Every jar is aligned to helping you achieved financial freedom.

Money Jars

1. FFA-Financial Freedom Account, 10%. The money in this jar should go to creating more passive income, either Investment or Business Passive Income. Talk to a Financial Planner to help you plan & set up this account.

2. LTSS-Long Term Savings for Spending, 10%. The money in this jar can be for that car you are saving for, a down payment for the house you've been saving for, your kids college education and a whole lot more. Just remember it should be a big spending in the next 5 or more years.

3. Education, 10%. This money is for your continuous education. I suggest spend it for education that will help you earn more money, particularly more passive income. Like learning how to do internet marketing, real estate investing, stocks investing and trading, leadership training, personal growth seminar and the like.

4. Play, 10%. This is my favorite jar! This let you enjoy the money you work for and earn. This will reinforce your drive and passion to earn more money because the more money you earned the more money in your play jar to enjoy. Spend it! Splurge it! Make it feels that you deserve every piso you spend it for. Have that emotions that you really feel wealthy in all aspect of your life that you would like to have more.

5. Give, 5%. This is the spiritual side of money management. The more you give the more you receive. Be a generous giver and an excellent receiver. You can increase this to 10% or more as you journey towards financial freedom, adjust necessity jar to offset the increase in your give jar.

6. Necessity, 55%. This is your cost of living. Simplify your life, this could be the one jar that if you manage poorly or properly can dictate how long you'll achieved financial freedom. I have written a blog post about practical tips on how you can save more money.

I know this is easier said than done. The key is ACTION. You & I need to take actions. Martin Luther King Jr. once said “Take the first step in faith. You don't have to see the whole staircase, just take the first step.” To help you take the first step in achieving your financial freedom, register in my Financial Freedom Webinar happening this March 22, 2016, 8pm-10pm (Manila time). We will talk about how to have the mindset to earn more income (active & passive), more about money jars and how you can get started in making your FFA work hard for you. Click HERE to register or click the register button below.

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