A lot of people talk about becoming financially free without fully understanding what that is. Without an understanding of this, it is very hard for them to move towards that goal. In the video above I give you real, practical advice about what financial freedom actually is and how to achieve financial freedom in 12 months or less. I highly recommend watching it until the end to get your journey off to the best start possible.
In this article, I will explain what financial freedom is; what your financial freedom number is; how to reduce that figure (therefore becoming financially free quicker); and finally, the property strategies you can use to get there.
1. What is financial freedom and what is your financial freedom number?
The first thing you need to do is to understand what passive income is. Passive income is money that comes in on a regular basis whether you work or not. An example of this is the rental income you get when you buy a buy-to-let property.
You need a certain amount of passive income each month to be financially free. But what is that number? That number is whatever is enough to cover your monthly expenses. This number is different for each person. If you have a lot of expenses, such as a mortgage and a family that number will be a lot higher than a single person living in a studio flat. Work out that number and write it down before moving to the next step.
2. How to reduce that figure and become financially free quicker
The lower your financial freedom number is, the easier it will be to become financially free. If you need £2,000 per month, it will be a lot easier to get there than if you need £5,000. If you have a simple life and low expenses, you are actually at an advantage here over someone with a greater income and greater expenses.
Now you need to go through your finances and cut out anything you don’t need. If you can get your number down, you can get to financial freedom faster so this is an important step. I had one student with a lot of subscriptions he didn’t use, including a dating site subscription he signed up for before he got married! Cancelling a number of these subscriptions allowed his financial freedom number to be reduced substantially.
Work out your new number and write it down. Then move to the final step.
3. Property strategies for financial freedom
You now need to ingrain on your brain your financial freedom number and then find ways to generate that in passive income each month. If you have a few hundred thousand pounds to invest and a low financial freedom number, you can become financially free with regular property investment strategies. If you don’t have that money to invest, you can use strategies such as rent to rent.
If you need any help getting started, why not come to my next crash course? Tickets are only £1 and you can book one here.