How to Get Started on Your Path to Economic Freedom
What is economic freedom? Economic freedom is financial security, but it also can be described as “critical mass.” Critical mass means the accumulation of assets that can produce an income stream. Now, what does financial freedom do for you? It gives you the liberty to do what you want with your time. That could be to continue to work on your career. But real economic freedom is achieved when you can accumulate enough assets to do essentially whatever it is you want with your time.
Now, nearly everybody says they want to achieve economic freedom. But there are two critical elements that must be present to make this goal a reality. First, do you have the knowledge? Knowledge, of course, can be acquired. (and we can help). Second, do you have the desire? Desire is something that many people say they have, but do you really want it bad enough to be willing to make life changes?
The achievement of economic freedom is going to require a certain amount of discipline. But even if you aren’t a very disciplined person, that’s ok. We suspect that just about everyone can transform some bad habits into good habits, but doing so does require making, and sticking to, good choices.
- To achieve economic freedom, you must be able to save money.
- To achieve economic freedom, you must be able to control your spending.
- To achieve economic freedom, you must be willing to put money to work in the financial markets.
So, what does the path to economic freedom look like?
Well, you get there by first putting together a spending plan enabling you to save money every month. The management of expenses is the absolute foundation of achieving economic freedom, because that means you’re going to have a profit in your life each month. And, once you have a profit in your life each month, you can begin to invest.
Investing is something that you need to understand does take a certain amount of knowledge, and a certain amount of time. In our opinion, when you’re investing towards economic freedom, you’re not speculating. Investing means owning quality investments; investments very likely to grow over time. You must be willing to wait 10, 15, 20, 30, even 40 years in order to be able to allow the power of compounded growth to work for you.
Another part of your path to economic freedom is that you must build up your “balance sheet.” Your balance sheet is going to be that list of assets you are accumulating that is going to provide an income stream for you in the future. The building of your balance sheet also means the paying down or the elimination of debt. A balance sheet lists all your assets and all your liabilities. And, the best balance sheets have very low debt and very high levels of assets—assets that can be used to produce income. Once you have invested your accumulated assets wisely, you will have arrived at that place we call economic freedom.
So, how do you get started on the path to achieving economic freedom, and what should you do next? Here are some questions you need to answer:
- First, list where you are today. What are your assets? What are your liabilities? What is your income? What’s your spending? And what is your net savings each month?
- Second, where do you want to go? One of the things you need to do today is define, in as much detail as you can, what economic freedom means to you. What does it look like? How much income would you like to generate from your investments so that you can do whatever you want? Is it $5,000 a month? $10,000 a month? Is it $50,000 a month?
It’s important to visualize where you want to go. Don’t worry about how you’re going to get there just yet. First visualize the amount of income you’re going to need to be able to achieve economic freedom.
The final step is to allow us to be your guide. The team here at the Science of Economic Freedom has put together an educational course that is going to help you build the knowledge you need to be able to achieve the economic freedom you seek.
Listen to the first 10 episodes of the Science of Economic Freedom, then simply write down your assets, liabilities, spending plans, and current investments. Doing so will get you up and running, and on your way to achieving economic freedom.