These steps show the route to take to arrive at the point called, financial freedom. What to do with these steps? Determine where you are, and then you can get counsel to help you move from where you are to your desired destination.
Counseling can be as a group or one to one, with attendant costs. Posts are free!
Step 1. Expense is greater than income
At this step, you spend more than you earn because in most cases you have budgeted your in-come before they come-in.
Step 2. Income equals expense
At this step, your plan your expenses around your income and save nothing because you have a good mentality to never exceed your income. “Spending wisely” as some put it.
Step 3. Income exceeds expense, but no real savings
At this step, you save but have no real savings because you save to spend it later. E.g. you have your eye set on that car, that house, that shoe, that necklace…in a word spend in a liability. This takes you back to step 2.
Step 4. Income exceeds expenses and an escrow account has been created for reserves (savings)
At this step, you save very well and now have an escrow (an account reserved to acquire assets).
Step 5. Escrow has been funded consistently as a habit.
At this step, you have formed a new habit of consistently saving into your escrow before spending.
Step 6. Reserve is used to buy asset(s)
At this step, the Escrow account translates to the purchase of an asset. Beware anything bought that does not fetch you in-come is not an asset. If you have to spend on the asset such that the net effect is zero or negative (speaking in mathematics), you have no asset but a Liability.
Step 7. Asset begins to generate passive income
At this step, your asset is now generating income without your sweat (=passive income).
Step 8. Passive income exceeds living expenses
At this step, your passive income takes care of your daily expenses.
Step 9. Passive income is multiples of expenses
At this step, your passive income takes care of whatever you decide to do.
Navigating from one step to the other is not rocket science. It requires some guidance and commitment from your part to succeed.
If you require my help, identify where you are and click here.
To your financial freedom!
Share with your friends and find their levels. Step 0 is no income and Step 10 is teaching someone to follow your steps.
Think again, what would you do with your time if money was not your problem?
- Financial Mentorship (chibuikeblog.wordpress.com)
- What Is Financial Freedom? 3 Finance Bloggers Offer Answers (community.ally.com)
- Passive Income (sayyedawaisullah.wordpress.com)
- Tips for Managing Rental Properties for Passive Income (savingnspending.com)
- Reason For Financial Intelligence PT2 (charlesezeh.wordpress.com)
- The importance of Passive Income (finneythomas.com)
- Gain financial freedom and more (uchesamuel3.wordpress.com)
- The Most Important Thing To Know About Your 401(k) (forbes.com)
- Financial Literacy by Warren Buffett: Start saving with MACS Capital (ruralgroup.wordpress.com)
- Money Tips: 10 Best Personal Finance Books of All-Time (under30ceo.com)